Thursday, November 15, 2018

Newest MFI Select Tranche

Newest MFI Select Tranche

Well, I bought my five "new" stocks for the November 2018 MFI tranche.  First day was good... just 364 to go.

I did go a bit tech-heavy, I just felt that tech names have sold off a ridiculous amount... I suppose because of perceived weakness in Apple.  We shall see how it works out.  Here are the names I considered and didn't pick... I will track them as well over the upcoming year:  AEIS, FTSI, DLX, CASA and SHI.

My final number on my expiring tranche was -0.6%.  Pretty depressing.  But my 2nd tranche in 2018 to expire in the red.  No one said it was easy.

Looking back, the 5 stocks I rejected a year ago were also slightly negative (NTES, FOXA, AGX, AMGN and DLX).  AGX, DLX and NTES were all down by 20%+.

Ironically, the best thing to have done would have been to just keep the 5 stocks that expired in November 2017.  They went up 13% (and they were up 42% for the year I held them!).  ATHM, CA, MPAA, RHI and AMGN.  CA was big winner, getting bought out and rising 40%.

Ok, enough look backs.  Here are my five new picks and how they fared today post my buying them around 10 am.

11/15/2018  Start   Current   Dividend   Pct Gain   R3K Gain 
 AGX  $43.15 $43.94 $0.00 1.8% 1.7%
 DXC  $62.00 $62.27 $0.00 0.4% 1.7%
 MU  $38.49 $39.91 $0.00 3.7% 1.7%
 SGH  $29.67 $29.79 $0.00 0.4% 1.7%
 WDC  $44.92 $46.73 $0.00 4.0% 1.7%
 Totals  2.1% 1.7%

Fingers crossed!


Invest val said...

I'm following your blog, very interesting to check how MF perform. The current market is selling off, it's hard to finish "green" in this condition.

I'm actually at -15%, started on may 2018 with 10 stocks MF (not MFI)

Steven Degrijse said...

I also track the Magic Formula. I list top 50's with market cap >50M, >500M, >1B and >3B. On average 100 unique stocks a month. I track these stocks for a one year period and I doe this each month. What does not work: stocks with dividend yield above 5%. Since the start in 2016/01 they even have a negative overall return. Also negative return: stock with a market cap between 2B and 5B. What did work best during this period: stocks with market cap above 100B: on average 4 purchases each month, but with returns 14% above S&P500. Even in current negative market, this portfolio keeps on generating profits (e.g. +3% this month). I analyzed 35 periods so far, only 4 periods in the red, highest negative return -8% so far. On average 13,43% in the plus each month. Also working very well and outperforming S&P500: stocks with market cap between 5B and 10B (although also struggeling during most recent periods) and even better the Top 50 list with market cap >3B with a dividend yield between 2,5 and 5%.
I just want to share these ideas.

Marsh_Gerda said...

Steven, thanks for sharing your analysis.I know on the MFI website, they have been bragging about how one of the Gotham funds is in 99th percentile, and I think it is mega cap like you're showing as well. I'd be interested in names over 5%, I suspect GME is a big driver of those poor results.

Steven Degrijse said...

2018/12 selection. Stocks to avoid with div yield over 5%: BKE, BPT, CJREF, GME, MO, STX and TUP. Also to avoid (market cap between 2 en 5B): AMCX, DLX, EAF, EME, IDCC, JW.A, LPX, MD, MIK, MKSI, TGNA, THO, TNET, WFTBF and WTW.

Steven Degrijse said...

2018/12 selection. Stocks to own (mega caps over 100B): AAPL, ABBV, AMGN, CVS and MO. Avg div yield 3,41%. Also good to own (Top 50>3B and div yield between 2.5 and 5%): ABBV, AMGN, BBY, GILD, HPQ, HRB, IPG, KLAC, LRCX, OMC, VIAB and WDC.

Steven Degrijse said...

So MO is in both selections (to avoid and to own). I would rather own it as this one is not a dividend trap but a dividend aristocrat.

Steven Degrijse said...

Looking back at selection of one year ago (started 2017/12 and ended 2018/11). Benchmark S&P500 +4,25%. Mega caps did better: +9,24% driven by CSCO and AMGN while MO underperformed. Stocks with market cap between 2 and 5B: -2,5% (selection of 20 stocks: 12 of them ending big in the red, 2 others underperformed, only 2 big winners because they were acquired: CSRA and SYNT). Top 50 more than 3B and div yield between 2,5 and 5%: +2,83%. Best category were stocks between 5 and 10B: +22,39% (driven by acquisition BIVV, but also BAH, FL, FFIV, IPG, ALSN and RHI outperformed, while HRB, UTHR and VVV underperformed.