MFI Diary - Monthly Update: April 2019

MFI Diary - Monthly Update: April 2019

Welcome to the MFI Diary.  This is a blog I have been maintaining since the beginning of 2006.  I use it to track my personal investments in Magic Formula Investing (based on Joel Greenblatt's book, The Little Book The Beats The Markets) along with tracking how one would do purchasing stocks from his official screen and holding for a year.

Once a month I update how my portfolio is doing.  The time is now.

Monthly Executive Summary

It was a good month, for all but the Night King (GoT).  Most of my good performance was early in the month... and then kind of coasted.  Still,  am happy.  Here is a table showing performance of various components of portfolio along with relevant benchmarks:

Component	YTD	Month Change
Overall	+15.4%	+1.7%
MFI Select	+19.7%	+5.1%
MFI Formula	+17.6%	+5.5%
MFI Combined	+18.6%	+5.3%
Non MFI	+13.4%	-0.5%
Dividend Index	+11.2%	-0.4%
R3K Index	+17.5%	+3.6%
Blended Index	+15.3%	+2.2%
MFI Index	+9.9%	+2.1%
GARIX	+6.3%	+0.7%

So first you see I was up 1.7% for the month.  That was entirely driven by my two MFI portfolios (Select & Formula) up 5.3% in tandem.  My non MFI struggled, actually down 1/2 a percent.  But keep in mind that has a large part cash/income component and the dividend index (40 income producing securities) was also down 0.4%.  The Russell 3000 was up 3.6% and the MFI comps, my MFI Index (a basket of 50 MFI Stocks) and GARIX (a MFI Mutual fund) trailed at +2.1% and +0.7%.

Here are the stocks in MFI Index:

Stock	Start	Current	YTD Change
ACOR	15.58	10.05	-35.5%
AEIS	42.93	57.12	33.1%
ALSN	43.91	47.03	7.1%
AMAT	32.74	43.59	33.1%
AGX	37.84	48.36	27.8%
AKG	0.64	0.61	-4.9%
HRB	25.37	26.70	5.2%
BPT	21.64	20.68	-4.4%
CECO	11.42	18.16	59.0%
CELG	64.09	95.02	48.3%
CJREF	3.50	5.72	63.5%
DLX	38.44	44.20	15.0%
DXC	53.17	66.03	24.2%
ESIO	29.96	30.00	0.1%
FTSI	7.11	10.25	44.2%
GME	12.62	8.89	-29.6%
GILD	62.55	65.52	4.7%
EAF	11.44	11.23	-1.9%
HSII	31.19	34.42	10.4%
HPQ	20.46	20.09	-1.8%
IDT	6.19	7.27	17.4%
IMMR	8.96	9.48	5.8%
INVA	17.45	13.95	-20.1%
IDCC	66.43	66.06	-0.6%
IPG	20.63	23.36	13.2%
KLAC	89.49	126.71	41.6%
LRCX	136.17	205.06	50.6%
LGORF	2.07	1.24	-40.1%
LTRPA	15.89	14.42	-9.3%
TUSK	17.98	14.76	-17.9%
MCFT	18.70	24.73	32.2%
MSB	23.69	30.38	28.2%
MSGN	23.56	23.63	0.3%
NHTC	18.49	12.11	-34.5%
NKTR	32.87	31.64	-3.7%
EGOV	12.48	17.28	38.5%
OMC	73.24	79.62	8.7%
PETS	23.26	21.82	-6.2%
STX	38.59	48.31	25.2%
SIGA	7.90	5.24	-33.7%
SP	29.54	33.79	14.4%
STRL	10.89	13.57	24.6%
TVTY	24.81	21.96	-11.5%
TUP	31.57	22.99	-27.2%
HEAR	14.27	10.64	-25.4%
UIS	11.63	11.18	-3.9%
UTHR	108.90	99.30	-8.8%
VEC	21.58	40.80	89.1%
VIAB	25.70	29.05	13.0%
WDC	36.97	50.80	37.4%

Five stocks down 30% or more already.  That has been the real drag and ongoing story for MFI.

But here are the 50 stocks in my MFI > $3b for month of April

Ticker	Shares	Basis	Current Price	Gain/Loss	Pct G/L
ABBV	24.82	80.59	78.89	(42)	-2.1%
ABC	25.15	79.52	73.39	(154)	-7.7%
ALSN	44.52	44.92	46.88	87	4.4%
AMAT	50.43	39.66	43.38	188	9.4%
AMCX	35.24	56.76	58.90	75	3.8%
AMGN	10.53	189.98	176.14	(146)	-7.3%
AYI	16.67	120.01	144.33	405	20.3%
BBY	28.15	71.06	73.83	78	3.9%
BIIB	8.46	236.38	229.50	(58)	-2.9%
CBS	42.08	47.53	51.13	151	7.6%
CDK	34.00	58.82	56.73	(71)	-3.6%
CELG	21.20	94.34	95.02	14	0.7%
CHH	25.80	77.53	83.87	164	8.2%
CPRI	43.72	45.75	43.19	(112)	-5.6%
DISCA	74.02	27.02	30.89	286	14.3%
DXC	31.10	64.31	65.84	48	2.4%
EAF	156.37	12.79	11.14	(258)	-12.9%
EME	27.37	73.08	81.94	242	12.1%
FFIV	12.74	156.93	152.26	(60)	-3.0%
GILD	30.76	65.01	64.87	(4)	-0.2%
GNTX	96.71	20.68	22.88	213	10.6%
HPQ	102.93	19.43	19.93	51	2.6%
HRB	83.54	23.94	26.45	210	10.5%
IPG	95.19	21.01	23.08	197	9.9%
JAZZ	13.99	142.95	129.62	(186)	-9.3%
KHC	61.26	32.65	32.99	21	1.0%
KLAC	16.75	119.41	125.96	110	5.5%
LEA	14.74	135.71	142.55	101	5.0%
LPX	82.03	24.38	24.78	33	1.6%
LRCX	11.17	179.01	203.96	279	13.9%
MAN	24.20	82.63	95.22	305	15.2%
MCK	17.09	117.03	119.01	34	1.7%
MKSI	21.49	93.05	88.56	(97)	-4.8%
MO	34.84	57.40	53.39	(140)	-7.0%
MU	48.39	41.33	41.90	28	1.4%
NKTR	59.52	33.60	31.64	(117)	-5.8%
OMC	27.41	72.97	78.97	164	8.2%
QRTEA	125.16	15.98	17.11	141	7.1%
RHI	30.70	65.15	60.89	(131)	-6.5%
RTN	10.99	182.05	176.34	(63)	-3.1%
STX	41.76	47.89	48.31	18	0.9%
SWKS	24.25	82.48	88.48	145	7.3%
TER	50.20	39.84	48.74	447	22.3%
TGNA	141.94	14.09	15.83	247	12.3%
TPR	61.58	32.48	31.02	(90)	-4.5%
URBN	67.48	29.64	29.70	4	0.2%
UTHR	17.04	117.37	99.30	(308)	-15.4%
VIAB	71.25	28.07	28.85	56	2.8%
WDC	41.61	48.06	50.80	114	5.7%
XRX	62.54	31.98	33.26	80	4.0%

So up 2.7% in the month (excluding dividends).

Here is my dividend index (recall, not a great month):

Ticker	12/30/2018	Current	Dividend	YTD Change	Monthly Change
AMLP	8.73	10.02	0.21	17.1%	-0.1%
NML	6.69	7.96	0.22	22.3%	0.0%
EPD	24.59	28.81	0.84	20.6%	-1.0%
KMI	15.38	19.90	0.57	33.0%	-0.6%
FDD	11.94	13.21	0.15	11.9%	3.0%
VGK	48.62	55.50	0.38	14.9%	3.5%
NVS	85.81	81.12	2.75	-2.3%	-15.6%
NOBL	60.54	68.63	0.33	13.9%	1.3%
VYM	77.99	87.67	0.62	13.2%	2.3%
MRK	76.41	76.92	0.48	1.3%	-7.5%
PEP	110.48	126.51	0.81	15.2%	3.2%
VNQ	74.57	85.88	0.98	16.5%	-1.2%
RQI	10.36	12.97	0.32	28.3%	1.3%
TCO	45.49	50.52	0.63	12.4%	-4.5%
SLG	79.08	87.03	0.78	11.0%	-3.2%
T	28.54	30.97	1.02	12.1%	-1.3%
VZ	56.22	56.92	1.12	3.2%	-3.7%
CHL	48.00	47.55	-	-0.9%	-6.8%
DSU	9.77	10.77	0.28	13.1%	0.5%
HIO	4.38	4.95	0.12	15.5%	2.4%
MUB	109.04	111.45	0.84	3.0%	0.2%
PRHYX	6.16	6.54	0.09	7.6%	0.9%
NEA	12.31	13.30	0.24	10.0%	-0.5%
JNK	33.59	36.27	0.66	9.9%	0.8%
VWITX	13.91	14.19	0.12	2.9%	0.1%
PHMIX	8.90	9.19	0.13	4.7%	0.4%
UTG	29.43	34.48	0.64	19.3%	2.4%
XLU	52.92	57.71	0.42	9.8%	-0.8%
DUK	86.30	89.57	0.89	4.8%	-0.5%
EIX	56.77	63.38	0.54	12.6%	2.4%
PFF	34.23	36.62	0.72	9.1%	0.2%
JPC	8.34	9.60	0.26	18.2%	0.7%
TIP	109.51	113.14	0.84	4.1%	0.1%
SHY	83.62	84.06	0.32	0.9%	-0.1%
TLT	121.51	123.01	1.02	2.1%	-2.7%
Totals	-		-	11.2%	-0.7%

NVS down 15.6% really hurt.

MFI Select

Ok, enough index and non real money stuff.  How am I doing in MFI?  Pretty good of late, thank you.  MFI Select has been a real money investing approach for me since August 2012.  I had quit MFI in July 2011 (poor results).  I licked my wounds, did some analysis and came back with MFI Select in 2012.  It consists of 4 tranches of stocks each tranche bought and held for a year.  Historically, each tranche had 5 stocks, but I am bumping that to 6 or 7 going forward.  This is because over the next two years I will be steadily moving money out of non MFI portfolios and into MFI.

Here are my four "open" tranches.  I use quotations as the May 2nd 2018 portfolio officially closed today and I'll start a new tranche tomorrow.

5/2/2018	Start	Current	Dividend	Pct Gain	R3K Gain
CAAP	$12.19	$7.61	$0.00	-37.6%	12.1%
TGNA	$10.51	$15.83	$0.28	53.3%	12.1%
DISCA	$23.85	$30.89	$0.00	29.5%	12.1%
FTSI	$19.39	$10.25	$0.00	-47.1%	12.1%
ICHR	$21.96	$25.04	$0.00	14.0%	12.1%
Totals				2.4%	12.1%
8/15/2018	Start	Current	Dividend	Pct Gain	R3K Gain
AGX	$39.45	$48.11	$0.75	23.9%	3.2%
AMCX	$60.97	$58.90	$0.00	-3.4%	3.2%
CJREF	$3.08	$5.66	$0.12	87.8%	3.2%
GME	$15.50	$8.51	$1.14	-37.7%	3.2%
SGH	$31.12	$21.95	$0.00	-29.5%	3.2%
Totals				8.2%	3.2%
11/15/2018	Start	Current	Dividend	Pct Gain	R3K Gain
AGX	$43.15	$48.11	$0.50	12.7%	9.4%
DXC	$62.00	$65.84	$0.38	6.8%	9.4%
MU	$38.49	$41.90	$0.00	8.9%	9.4%
SGH	$29.67	$21.95	$0.00	-26.0%	9.4%
WDC	$44.92	$50.80	$1.00	15.3%	9.4%
Totals				3.5%	9.4%
2/1/2019	Start	Current	Dividend	Pct Gain	R3K Gain
AGX	$42.18	$48.11	$0.25	14.7%	8.4%
BBY	$58.84	$73.83	$0.50	26.3%	8.4%
HPQ	$22.07	$19.93	$0.16	-9.0%	8.4%
MU	$38.22	$41.90	$0.00	9.6%	8.4%
RTN	$166.65	$176.34	$0.94	6.4%	8.4%
VIAB	$29.40	$28.85	$0.20	-1.2%	8.4%
WDC	$44.99	$50.80	$0.50	14.0%	8.4%
Totals				8.7%	8.4%

So mixed results here.  May tranche ended a loser vs benchmark (I'll write more on that in another blog).  August doing very well.  November really hurt by SGH.  Then February leading, but gave up some ground recently.

Category/Tranche	August	November	February	May	Total
Initial Investment	25,000	25,000	25,000	25,000	100,000
Current Tranche	8.2%	3.5%	8.7%	2.4%	6.0%
Previous Tranche	27.8%	-0.6%	-27.3%	-3.6%	28.2%
Tranche -2	-0.1%	42.6%	74.9%	19.1%	34.2%
Tranche -3	2.8%	8.0%	10.7%	-25.2%	-0.9%
Tranche -4	11.2%	69.4%	-14.3%	18.3%	21.2%
Tranche -5	41.4%	14.2%	8.5%	33.0%	24.3%
Tranche -6	14.1%	43.7%	78.3%	0.0%	34.0%
MFI Overall Gain	155.0%	340.9%	153.6%	38.4%	172.0%
Current Balance	63,747	110,230	63,393	34,600	271,969
R3K Current Tranche	3.2%	9.4%	8.4%	12.1%	8.3%
R3K Overall Gain	132.8%	138.8%	113.5%	99.4%	121.1%
R3K Balance	58,208	59,689	53,367	49,860	221,123
Annualized IRR	15.0%	25.8%	16.1%	5.6%	15.6%

This table shows aggregate results for every tranche.  So you can see the four open tranches (Current tranche row) are up 6.0% in total.  That trails R3K at 8.3%.  But since 2012, I'm up 172% while benchmark is up 121.1%.  Woo-hoo.  

Here is the 172% quarter by quarter:

Date	Differential	MFI Value	R3K Value
1/1/2013	-1.78%	102,798	104,575
4/1/2013	-0.43%	106,804	107,234
7/1/2013	4.29%	114,888	110,597
10/1/2013	19.67%	138,655	118,990
1/1/2014	26.63%	157,138	130,503
4/1/2014	30.38%	162,991	132,616
7/1/2014	39.23%	177,971	138,740
10/1/2014	29.38%	168,321	138,944
1/1/2015	28.17%	174,306	146,140
4/1/2015	29.95%	178,565	148,612
7/1/2015	62.69%	211,437	148,743
10/1/2015	43.12%	181,175	138,052
1/1/2016	63.33%	209,514	146,186
4/1/2016	47.34%	195,770	148,430
7/1/2016	50.41%	201,092	150,680
10/1/2016	42.98%	198,563	155,582
1/1/2017	45.60%	209,503	163,936
4/1/2017	55.70%	229,473	173,735
7/1/2017	60.28%	239,060	178,782
10/1/2017	75.60%	262,489	186,886
1/1/2018	92.19%	291,114	198,926
4/1/2018	96.21%	293,665	197,451
7/1/2018	68.20%	273,125	204,921
10/1/2018	65.80%	284,097	218,297
1/1/2019	39.77%	228,246	188,479
4/1/2019	46.16%	260,553	214,391
Current	50.85%	271,969	221,123

You can see never a straight line.  I am still down from all time high while R3K is ll time high.

Stock	Last Month	Current	Dividend	Change
AGX	50.83	48.11	0.25	-4.9%
WDC	49.31	50.80	-	3.0%
MU	42.25	41.90	-	-0.8%
SGH	20.50	21.95	-	7.1%
DISCA	27.75	30.89	-	11.3%
TGNA	14.11	15.83	-	12.2%
BBY	72.10	73.83	-	2.4%
CJREF	4.53	5.66	-	25.0%
RTN	184.74	176.34	0.92	-4.0%
VIAB	28.89	28.85	-	-0.1%
ICHR	23.34	25.04	-	7.3%
DXC	65.64	65.84	-	0.3%
HPQ	20.05	19.93	-	-0.6%
AMCX	57.33	58.90	-	2.7%
GME	10.39	8.51	-	-18.1%
CAAP	8.05	7.61	-	-5.5%
FTSI	10.24	10.25	-	0.1%

Here are how individual stocks did in month.  GME is just continuous pain.  A true value trap.

MFI Formula

MFI Formula is my second real $ portfolio.  I started it in September 2014.  It is purely based on a formula (filters) and a random number generator (MFI Select is free form, where I allow myself to pick anything).  Same tables:

7/2/2018	Start	Current	Dividend	Pct Gain	R3K Gain
CJREF	$3.90	$5.66	$0.31	53.1%	8.0%
GILD	$70.80	$64.87	$1.77	-5.9%	8.0%
IPG	$22.80	$23.08	$0.66	4.1%	8.0%
KLAC	$102.03	$125.96	$2.25	25.7%	8.0%
TUP	$40.09	$22.72	$1.63	-39.3%	8.0%
Totals				7.5%	8.0%
10/2/2018	Start	Current	Dividend	Pct Gain	R3K Gain
CJREF	$3.36	$5.66	$0.12	72.1%	0.7%
GILD	$78.13	$64.87	$1.20	-15.4%	0.7%
IPG	$22.80	$23.08	$0.45	3.2%	0.7%
PETS	$31.56	$21.55	$0.54	-30.0%	0.7%
VIAB	$32.21	$28.85	$0.40	-9.2%	0.7%
Totals				4.1%	0.7%
1/2/2019	Start	Current	Dividend	Pct Gain	R3K Gain
EGOV	$12.54	$17.20	$0.08	37.8%	19.0%
GILD	$62.01	$64.87	$0.63	5.6%	19.0%
IPG	$20.50	$23.08	$0.24	13.7%	19.0%
KLAC	$90.04	$125.96	$0.75	40.7%	19.0%
OMC	$72.74	$78.97	$0.65	9.5%	19.0%
Totals				21.5%	19.0%
4/1/2019	Start	Current	Dividend	Pct Gain	R3K Gain
VIAB	$28.90	$28.85	$0.00	-0.2%	2.1%
DLX	$44.50	$43.95	$0.00	-1.2%	2.1%
HRB	$24.31	$26.45	$0.00	8.8%	2.1%
GILD	$66.00	$64.87	$0.00	-1.7%	2.1%
KLAC	$122.10	$125.96	$0.00	3.2%	2.1%
Totals				1.8%	2.1%

You can see my open tranches are hanging in better against benchmark than MFI Select.

Category/Tranche	October	January	April	July	Total
Initial Investment	249,820	249,939	250,180	249,728	999,667
Current Tranche	4.1%	21.5%	1.8%	7.5%	8.5%
Previous Tranche	18.5%	-4.0%	-0.3%	37.3%	13.9%
Tranche -2	7.0%	16.5%	21.3%	26.7%	17.9%
Tranche -3	5.5%	9.3%	25.2%	-12.5%	6.9%
Tranche -4	0.5%	11.0%	-0.2%	0.0%	2.8%
MFI Overall Gain	40.0%	64.7%	53.8%	63.8%	55.6%
Current Balance	349,642	411,735	384,711	409,061	1,555,148
R3K Current Tranche	0.7%	19.0%	10.6%	8.0%	9.6%
R3K Overall Gain	58.6%	48.9%	43.3%	47.7%	49.6%
R3K Balance	396,204	372,159	358,465	368,741	1,495,569
Annualized IRR	7.6%	12.2%	11.1%	13.7%	11.2%

So current tranches are +8.5% vs R3K 9.6%.  (Value stocks continue to be out of favor).  But I am winning the marathon, up since 2014.

Date	Differential	Value	R3K Value
10/1/2014	0.00%	100,000	100,000
1/1/2015	-0.33%	100,664	100,995
4/1/2015	5.09%	106,781	101,695
7/1/2015	4.82%	106,423	101,604
10/1/2015	6.39%	100,703	94,312
1/1/2016	-3.36%	96,830	100,012
4/1/2016	0.34%	102,371	101,548
7/1/2016	-0.19%	103,022	103,216
10/1/2016	-0.85%	106,377	107,230
1/1/2017	1.57%	113,406	111,832
4/1/2017	-1.86%	116,227	118,091
7/1/2017	-2.40%	119,144	121,545
10/1/2017	-2.56%	124,448	127,007
1/1/2018	-3.63%	131,460	135,086
4/1/2018	-0.16%	133,734	133,898
7/1/2018	2.28%	141,126	138,849
10/1/2018	-0.85%	147,963	148,808
1/1/2019	3.90%	132,405	128,506
4/1/2019	0.98%	147,070	146,092
Current	5.96%	155,515	149,555

Stock	Last Month	Current	Dividend	Change
GILD	65.88	64.87	-	-1.5%
KLAC	122.16	125.96	-	3.1%
IPG	21.17	23.08	-	9.0%
CJREF	4.53	5.66	-	25.0%
VIAB	28.89	28.85	-	-0.1%
EGOV	17.13	17.20	-	0.4%
HRB	24.33	26.45	-	8.7%
DLX	44.69	43.95	-	-1.7%
OMC	73.63	78.97	-	7.3%
TUP	25.81	22.72	-	-12.0%
PETS	23.12	21.55	-	-6.8%

The past month really really helped by CJREF.

Non MFI

Quick look at my non MFI stocks (not doing that well).

Stock	12/31/2018	Current	Dividend	Yield	Change
LADR	15.47	17.12	0.34	7.9%	12.9%
T	28.54	30.79	1.02	6.6%	11.5%
OXY	61.38	57.48	0.78	5.4%	-5.1%
CTL	15.15	11.36	0.25	9.5%	-23.4%
KCLI	37.00	34.70	0.27	3.1%	-5.5%
GLOP-PB	20.33	23.29	0.52	8.8%	17.1%
CBL-PD	9.90	8.51	-	21.6%	-14.0%
NRZ	14.21	16.79	0.50	11.9%	21.7%
TOO-PE	17.90	21.40	0.69	9.9%	23.4%
TGONF	11.38	13.00	0.18	5.5%	15.8%
O	63.04	70.00	0.90	3.8%	12.1%
INSW-PA	23.10	25.25	0.53	8.4%	11.6%
TGP-PB	21.84	24.53	0.53	8.6%	14.7%
DLNG-PB	18.02	20.06	0.72	10.6%	15.3%
OIBAX	5.36	5.45	0.13	5.1%	3.6%

These are my income names.

Stock	12/31/2018	Current	Dividend	Change
TGP	11.02	14.76	0.14	35.2%
GLNG	21.76	19.25	0.15	-10.8%
TK	3.34	4.14	0.06	25.6%
CMRE	4.99	5.99	-	20.0%
DHT	3.92	5.42	0.05	39.5%
NMM	0.85	0.97	0.02	16.8%
CPLP	2.09	2.84	0.05	38.0%

These are my shipping names.  I actually sold DHT this week and will likely close CMRE tomorrow (as I continue shift from non MFI to MFI).  TK took major hit this month, but I added shares this week at 3.85 as it was way oversold.  I sold TGP shares to stay constant in my shipping exposure.

Stock	12/31/2018	Current	Dividend	Change
ECA	5.78	6.69	-	15.7%
CHK	2.10	2.83	-	34.8%
WPX	11.35	13.23	-	16.6%
SEDG	35.10	44.14	-	25.8%
AR	9.39	7.13	-	-24.1%
PXD	131.52	157.98	-	20.1%

AR is so hated.  Is it really that bad?  PXD was lifted by APC bid.  ECA just also seems so cheap given where oil prices are.  But I sold my WPX and will continue edge out of energy space (except perhaps SEDG).  Note I list OXY under income list... it is a big position and has really taken a hit in APC drama-rama.  I wish/hope they get outbid... I am not even very happy about Buffett involvement as I know he is getting a pound of flesh that will cost us shareholders.

I think that is a wrap.  Have a great month!