MFI Weekend Update 10/6/17

Weekend Update

Greetings from Pittsburgh.  In the Steel City to visit our son.  Retirement is great, just pick up and travel whenever we feel like it.  We will head to Nashville next.  We are running a 5K here tomorrow and one in Maryville TN next week as we try to run a 5K in all 50 states.

You have found your way to the MFI Diary, a blog where I let readers know my thoughts and performance on real life, real dollar Magic Formula Portfolios (based of course on "The Little Book The Beats The Market" by Joel Greenblatt.  I also spend some effort tracking hypothetical portfolios based on downloads from the official website going back to January 2006.

Of course, I have to have a disclaimer - I am just a guy with a spreadsheet and not a stock advisor.  You should do your own due diligence before acting on anything you read here.

Any opinions you read are my own unless they end up being really bad.

The Past Week

Before I get into my stocks, it was a very good week for MNKD, a small specialty pharma in my tracking portfolios.  It rocketed up 132% on the week and is in 6 of my 12 open MFI tracking portfolios at an average of +226%!

Here is my new chart showing YTD results and 4th quarter results. Since we are a week into Q4, the Q4 results = past week.

Component	YTD	4th Q
Overall	+14.61%	+0.97%
MFI Select	+25.11%	+0.72%
MFI Formula	+10.89%	+1.21%
Miscellaneous	+9.36%	+2.20%
Dividend	+13.97%	+0.12%
R3K	+15.05%	+1.25%
MFI Index	+5.25%	+0.93%
GARIX	+5.64%	+0.72%

I did start a new tranche this week.  Hard to be unhappy with a 0.8% week... but it is trailing.

10/1/2017	Start	Current	Dividend	Pct Gain	R3K Gain
DIN	$43.14	$45.04	$0.00	4.4%	1.3%
GILD	$82.85	$82.14	$0.00	-0.9%	1.3%
GME	$20.50	$20.02	$0.00	-2.3%	1.3%
HPQ	$20.22	$20.58	$0.00	1.8%	1.3%
OMC	$74.80	$75.42	$0.00	0.8%	1.3%
Totals				0.8%	1.3%

You can see why my Misc did so well this week.  My 3 warrants holdings all popped

BAC Warrants: +6%

ROSE Warrants:  +31%

DSKE Warrants:  +12%.

I did miss a huge gainer in my Misc portfolio.  I had bought ITEK at 97 cents when they were trading below cash.  I then sold for virtually no gain when they merged with another firm.  This week they shot up to $2.72! C'est la vie.

MFI Select

Regular readers of my blog know that I maintain two real money MFI portfolios. The first is MFI Select, which consists of 4 tranches, each with five stocks that I buy and hold for a year.  I have been running this portfolio since August 2012.

Here is how the stocks did last week:

ATHM	60.08	61.42	-	2.2%
RHI	50.34	51.14	-	1.6%
YY	86.78	88.74	-	2.3%
AKRX	33.19	32.83	-	-1.1%
AMGN	186.45	185.82	-	-0.3%
CA	33.38	33.86	-	1.4%
ICHR	26.80	26.41	-	-1.5%
WNC	22.82	22.44	-	-1.7%
SIMO	48.03	51.20	-	6.6%
MPAA	29.46	29.24	-	-0.7%
MD	43.12	43.62	-	1.2%
GHC	585.10	579.35	-	-1.0%
WSTC	23.47	23.49	-	0.1%
QCOM	51.84	52.49	-	1.3%
KLAC	106.00	102.47	-	-3.3%
MSGN	21.20	22.05	-	4.0%
TGNA	22.20	22.97	-	3.5%
RGR	51.70	52.75		2.0%
TIME	13.50	12.95		-4.1%

Recall these are sorted by size of holding.  So the 4.1% drop in TIME is less significant than the 2.2% move in ATHM.

Here are the 4 tranches:

11/15/2016	Start	Current	Dividend	Pct Gain	R3K Gain
MPAA	$26.55	$29.24	$0.00	10.1%	19.2%
ATHM	$22.61	$61.42	$0.00	171.6%	19.2%
AMGN	$145.14	$185.82	$3.15	30.2%	19.2%
RHI	$43.23	$51.14	$0.94	20.5%	19.2%
CA	$31.11	$33.86	$0.77	11.3%	19.2%
Totals				48.8%	19.2%
2/1/2017	Start	Current	Dividend	Pct Gain	R3K Gain
AKRX	$19.10	$32.83	$0.00	71.9%	13.0%
YY	$41.08	$88.74	$0.00	116.0%	13.0%
KLAC	$85.11	$102.47	$1.67	22.4%	13.0%
WNC	$17.65	$22.44	$0.06	27.5%	13.0%
RGR	$52.75	$52.75	$1.15	2.2%	13.0%
Totals				48.0%	13.0%
5/6/2017	Start	Current	Dividend	Pct Gain	R3K Gain
WSTC	$24.15	$23.49	$0.00	-2.8%	7.2%
TGNA	$25.75	$22.97	$0.14	-10.3%	7.2%
TIME	$15.05	$12.95	$0.04	-13.7%	7.2%
MSGN	$23.55	$22.05	$0.00	-6.4%	7.2%
QCOM	$54.93	$52.49	$1.14	-2.4%	7.2%
Totals				-7.1%	7.2%
8/15/2017	Start	Current	Dividend	Pct Gain	R3K Gain
GHC	$591.10	$579.35	$0.00	-2.0%	4.3%
ICHR	$19.80	$26.41	$0.00	33.4%	4.3%
MD	$43.00	$43.62	$0.00	1.4%	4.3%
SIMO	$43.05	$51.20	$0.00	18.9%	4.3%
RHI	$44.15	$51.14	$0.24	16.4%	4.3%
Totals				13.6%	4.3%

So, I laid an egg in May.  But other three tranches continue to look good.  I have two doubles, ATHM and YY.  I guess not more than a month left on 11/15 tranche.

Here is a table showing overall results:

Category/Tranche	August	November	February	May	Total
Initial Investment	25,000	25,000	25,000	25,000	100,000
Current Tranche	13.6%	48.8%	48.0%	-7.1%	25.7%
Previous Tranche	-0.1%	8.0%	10.7%	19.1%	15.5%
Tranche -2	2.8%	69.4%	-14.3%	-25.2%	8.2%
Tranche -3	11.2%	14.2%	8.5%	18.3%	13.0%
Tranche -4	41.4%	43.7%	78.3%	33.0%	49.1%
Tranche -5	14.1%	0.0%	0.0%	0.0%	3.5%
MFI Overall Gain	109.4%	347.0%	171.6%	30.2%	164.5%
Current Balance	52,359	111,754	67,888	32,542	264,544
R3K Current Tranche	4.3%	19.2%	13.0%	7.2%	11.0%
R3K Overall Gain	99.8%	103.2%	82.8%	71.0%	89.2%
R3K Balance	49,956	50,805	45,706	42,760	189,227
Annualized IRR	15.4%	35.8%	23.8%	6.1%	20.3%

So my 4 open tranches are up an aggregate of 25.7%. My overall annualized IRR is 20.3%.

Here is how the portfolio has gained over time since I started in 2012:

Date	Differential	MFI Value	R3K Value
12/1/2012	-2.20%	99,765	101,965
1/1/2013	-1.78%	102,798	104,575
2/1/2013	-2.26%	102,594	104,856
3/1/2013	-2.23%	102,881	105,114
4/1/2013	-0.43%	106,804	107,234
5/1/2013	2.00%	110,423	108,423
6/1/2013	4.75%	115,831	111,085
7/1/2013	4.29%	114,888	110,597
8/1/2013	6.91%	124,799	117,889
9/1/2013	10.46%	124,536	114,079
10/1/2013	19.67%	138,655	118,990
11/1/2013	19.75%	143,514	123,764
12/1/2013	23.70%	150,105	126,405
1/1/2014	26.63%	157,138	130,503
2/1/2014	24.70%	150,619	125,918
3/1/2014	25.66%	158,116	132,458
4/1/2014	30.38%	162,991	132,616
5/1/2014	29.65%	162,428	132,779
6/1/2014	31.44%	167,001	135,559
7/1/2014	39.23%	177,971	138,740
8/1/2014	31.13%	167,054	135,922
9/1/2014	35.90%	177,792	141,892
10/1/2014	29.38%	168,321	138,944
11/1/2014	26.14%	168,810	142,666
12/1/2014	30.22%	176,420	146,198
1/1/2015	28.17%	174,306	146,140
2/1/2015	20.63%	162,833	142,201
3/1/2015	25.15%	175,476	150,324
4/1/2015	29.95%	178,565	148,612
5/1/2015	37.31%	186,655	149,348
6/1/2015	51.53%	202,897	151,371
7/1/2015	62.69%	211,437	148,743
8/1/2015	40.75%	192,117	151,369
9/1/2015	36.41%	178,603	142,195
10/1/2015	43.12%	181,175	138,052
11/1/2015	69.02%	217,959	148,936
12/1/2015	73.49%	223,435	149,946
1/1/2016	63.33%	209,514	146,186
2/1/2016	49.49%	187,428	137,934
3/1/2016	56.48%	194,415	137,934
4/1/2016	47.34%	195,770	148,430
5/1/2016	46.38%	194,301	147,923
6/1/2016	51.44%	201,999	150,558
7/1/2016	50.41%	201,092	150,680
8/1/2016	52.72%	207,223	154,501
9/1/2016	67.04%	222,481	155,446
10/1/2016	42.98%	198,563	155,582
11/1/2016	41.86%	195,726	153,863
12/1/2016	45.92%	202,775	156,859
1/1/2017	45.60%	209,503	163,936
2/1/2017	45.20%	212,330	167,146
3/1/2017	48.80%	222,583	173,829
4/1/2017	55.70%	229,473	173,735
5/1/2017	55.80%	231,497	175,712
6/1/2017	53.40%	230,599	177,203
7/1/2017	60.28%	239,060	178,782
8/1/2017	57.76%	239,924	182,163
9/1/2017	68.85%	251,265	182,419
10/1/2017	75.60%	262,489	186,886
Current	75.32%	264,544	189,227

This assumes I started with $100,000 spread over the 4 tranches.

MFI Formula

I started this approach in October 2014.  It uses a formula and random number generator instead of "selection".  It has not been as successful (yet) as my Select approach.

Stock	Last Week	Current	Dividend	Change
HPQ	19.96	20.58	-	3.1%
GILD	81.02	82.14	-	1.4%
SYNT	19.65	19.58	-	-0.4%
CSCO	33.63	33.75	0.29	1.2%
OMC	74.07	75.42	-	1.8%
GME	20.66	20.02	-	-3.1%
TGNA	22.20	22.97	-	3.5%
CA	33.38	33.86	-	1.4%
DIN	43.14	45.04	-	4.4%
BKE	16.85	17.15	-	1.8%
RGR	51.70	52.75	-	2.0%

Actually a very good week.  It is interesting that even though I have 20 spots (5 x 4), I only have 11 names in this portfolio.  This is the nature of random number generator and the fact that same names often repeat themselves with my formula approach.

12/30/2016	Start	Current	Dividend	Pct Gain	R3K Gain
GILD	$71.69	$82.14	$1.56	16.8%	14.9%
HPQ	$15.00	$20.58	$0.53	40.7%	14.9%
TGNA	$21.33	$22.97	$0.28	9.0%	14.9%
CA	$31.99	$33.86	$0.77	8.2%	14.9%
SYNT	$19.79	$19.58	$0.00	-1.1%	14.9%
Totals				14.7%	14.9%
4/1/2017	Start	Current	Dividend	Pct Gain	R3K Gain
BKE	$18.45	$17.15	$0.50	-4.3%	8.9%
CSCO	$33.76	$33.75	$0.87	2.6%	8.9%
GILD	$67.50	$82.14	$1.04	23.2%	8.9%
OMC	$85.53	$75.42	$1.10	-10.5%	8.9%
SYNT	$16.76	$19.58	$0.00	16.8%	8.9%
Totals				5.5%	8.9%
7/1/2017	Start	Current	Dividend	Pct Gain	R3K Gain
CSCO	$30.98	$33.75	$0.29	9.9%	5.8%
GME	$20.95	$20.02	$0.38	-2.6%	5.8%
HPQ	$17.60	$20.58	$0.13	17.7%	5.8%
RGR	$60.70	$52.75	$0.23	-12.7%	5.8%
SYNT	$16.21	$19.58	$0.00	20.8%	5.8%
Totals				6.6%	5.8%
10/1/2017	Start	Current	Dividend	Pct Gain	R3K Gain
DIN	$43.14	$45.04	$0.00	4.4%	1.3%
GILD	$82.85	$82.14	$0.00	-0.9%	1.3%
GME	$20.50	$20.02	$0.00	-2.3%	1.3%
HPQ	$20.22	$20.58	$0.00	1.8%	1.3%
OMC	$74.80	$75.42	$0.00	0.8%	1.3%
Totals				0.8%	1.3%

Still a bit of a struggle as 3 of my 4 tranches are trailing.  But it seems that they are trailing by less.

Category/Tranche	October	January	April	July	Total
Initial Investment	249,820	249,939	250,180	249,728	999,667
Current Tranche	0.8%	14.7%	5.5%	6.6%	6.9%
Previous Tranche	7.0%	9.3%	25.2%	26.7%	16.5%
Tranche -2	5.5%	11.0%	-0.2%	-12.5%	1.0%
Tranche -3	0.5%	0.0%	0.0%	0.0%	0.1%
MFI Overall Gain	14.3%	39.2%	31.8%	18.2%	25.9%
Current Balance	285,459	347,836	329,687	295,239	1,258,222
R3K Current Tranche	1.3%	14.9%	8.9%	5.8%	7.7%
R3K Overall Gain	35.8%	28.5%	27.1%	23.2%	28.6%
R3K Balance	339,322	321,064	318,083	307,572	1,286,041
Annualized IRR	4.5%	12.7%	11.6%	7.6%	9.1%

You'll see my annualized IRR is much lower here, 9.1%.  My current tranches are up an aggregate of 6.9% versus 7.7% for benchmark.  While that is not as good as I'd like, recall that my MFI tracking portfolios are trailing by about 3.5 percentage points, so relatively my formula approach is hanging in there.

Date	Differential	Value	R3K Value
10/1/2014	0.00%	100,000	100,000
11/1/2014	1.63%	102,288	100,658
12/1/2014	0.30%	101,375	101,075
1/1/2015	-0.33%	100,664	100,995
2/1/2015	1.67%	101,281	99,611
3/1/2015	3.62%	106,073	102,454
4/1/2015	5.09%	106,781	101,695
5/1/2015	5.78%	107,859	102,077
6/1/2015	5.08%	108,213	103,134
7/1/2015	4.82%	106,423	101,604
8/1/2015	3.71%	107,112	103,404
9/1/2015	4.38%	101,523	97,139
10/1/2015	6.39%	100,703	94,312
11/1/2015	2.93%	104,835	101,907
12/1/2015	-3.48%	99,443	102,926
1/1/2016	-3.36%	96,830	100,012
2/1/2016	-0.72%	93,797	94,367
3/1/2016	4.07%	98,588	94,367
4/1/2016	0.34%	102,371	101,548
5/1/2016	-1.91%	99,774	101,200
6/1/2016	-0.42%	103,145	103,568
7/1/2016	-0.19%	103,022	103,216
8/1/2016	2.56%	109,419	106,857
9/1/2016	-0.34%	106,704	107,048
10/1/2016	-0.85%	106,377	107,230
11/1/2016	0.42%	105,421	105,003
12/1/2016	1.62%	110,705	109,088
1/1/2017	1.57%	113,406	111,832
2/1/2017	1.32%	114,809	113,486
3/1/2017	-5.09%	112,930	118,024
4/1/2017	-1.86%	116,227	118,091
5/1/2017	1.11%	120,403	119,296
6/1/2017	-2.65%	117,824	120,472
7/1/2017	-2.40%	119,144	121,545
8/1/2017	-1.96%	121,873	123,828
9/1/2017	-6.09%	117,879	123,973
10/1/2017	-2.56%	124,448	127,007
Current	-2.78%	125,822	128,605

Recall that these tables are a bit hypothetical in how I roll them up.  They assume I started with $100,000 spread over four tranches and never added more money.  In reality, I did not start with $100,000 and at times (especially this year), I have added money at anniversary dates.

Miscellaneous & Dividend Portfolios

My dividend portfolio was not so hot this week (on a relative basis). Recall that this portfolio is constructed to produce income for my retirement and it does have bond funds and preferred stocks.  So in really good weeks, it is not a surprise that it lags.

Dividend Stocks	Start	Current	Divvy	Overall Pct Gain	Weekly Pct Gain	9/30/17 Price	Yield
FDEU	18.40	19.30	0.57	8.0%	-0.6%	19.42	6.4%
EVG	14.46	14.26	0.10	-0.7%	0.1%	14.24	7.5%
PSXP	47.39	52.95	0.38	12.5%	0.7%	52.56	4.6%
KCLI	49.31	49.00	0.22	-0.2%	-1.5%	49.75	9.3%
LADR	13.01	13.75	0.30	8.0%	-0.2%	13.78	8.7%
ISBC	13.25	13.62	0.06	3.3%	-0.1%	13.64	2.4%
NS	41.04	40.83	-	-0.5%	0.6%	40.59	2.3%
RLJ-PA	28.45	28.60	-	0.5%	2.8%	27.82	10.7%
JQC	8.20	8.50	1.07	16.7%	0.1%	8.49	6.9%
TK	5.24	8.80	0.06	68.9%	-1.5%	8.93	6.7%
DSL	19.47	21.41	1.35	16.9%	0.8%	21.25	8.4%
OIBAX	5.85	5.92	0.42	8.3%	-0.5%	5.95	8.5%
FSFR	8.68	8.89	0.19	4.7%	1.0%	8.80	4.4%
RILY	15.58	16.60	0.13	7.4%	-2.6%	17.05	2.5%
SBRA	23.13	21.65	0.52	-4.2%	-1.3%	21.94	1.6%
TGONF	11.04	12.90	1.61	31.5%	0.8%	12.80	6.7%
VTIBX	10.92	10.89	0.02	-0.1%	0.0%	10.89	5.4%
GLDI	9.29	8.99	0.10	-2.1%	-0.9%	9.07	1.1%
CPLP	3.54	3.45	-	-2.5%	-1.4%	3.50	9.2%
NRZ	16.22	17.18	0.88	11.3%	2.7%	16.73	11.6%
DHF	3.34	3.54	0.12	9.4%	0.3%	3.53	8.0%
BKE	14.15	17.15	-	21.2%	1.8%	16.85	5.8%
CA	34.79	33.86	0.26	-1.9%	1.4%	17.85	3.0%
O	25.26	56.48	20.74	205.7%	-1.2%	57.19	3.0%
Totals				8.6%			6.3%

Pretty not exciting.  But if I can actually get the 6.3% yield and just have the values stay relatively constant, then I am happy.

On the Misc side, I already mentioned the warrants holdings did very well.  FIX continues to be a solid play, up 3.6% this week.  So my two hurricane reconstruction plays, BLDR and FIX are each up overall about 10%.  Other stocks I considered were WY (4.9%), BECN (11.7%) and USG (7.9%).

Then smaller cap plays HIL and WLFC also had good weeks.

Have a great weekend everyone.