MagicDiligence
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Deep Value 0.23%
Star List 0.37%
S&P -0.16%
Today's Performance (see long-term performance)

MD Weekly Roundup: 4/13 - 4/19

Every week on MagicDiligence I check the MFI screen for changes, update readers on any news relating to the site itself, and review any relevant financial news during the week. First, the turnover in our two Magic Formula screens.

Entering the 100 over 50 million screen:

  • ACN - Accenture, Ltd.
  • BVF - Biovail Corporation
  • KCI - Kinetic Concepts
  • LRCX - Lam Research Corporation
  • MPS - MPS Group, Inc.
  • NTGR - Netgear, Inc.
  • SUPX - Supertex, Inc.
  • UEPS - Net 1 Ueps Technologies, Inc.

Dropping out of the 100 over 50 million screen:

  • ABC - AmerisourceBergen Corporation
  • AIRV - Airvana, Inc.
  • CAW - CCA Industries, Inc.
  • FRX - Forest Laboratories, Inc.
  • GIB - CGI Group, Inc.
  • MFB - Maidenform Brands, Inc.
  • TBI - TrueBlue, Inc.
  • TPX - Tempur-Pedic International, Inc.

Entering the 50 over 2 billion screen:

  • ACN - Accenture, Ltd.
  • ARO - Aeropostale, Inc.
  • LRCX - Lam Research, Inc.
  • MTW - Manitowoc Company
  • NOC - Northrup Grumman Corporation
  • OSK - Oshkosh Corporation
  • STX - Seagate Technology

Dropping out of the 50 over 2 billion screen:

  • FRX - Forest Laboratories, Inc.
  • GD - General Dynamics Corporation
  • HOG - Harley-Davidson, Inc.
  • LNCR - Lincare Holdings, Inc.
  • PFE - Pfizer, Inc.
  • ROK - Rockwell Automation, Inc.
  • RX - IMS Health, Inc.

In the News this Week

Blockbuster Bids for Circuit City

Two companies getting their lunch handed to them by competitors (Best Buy (BBY) and Netflix (NFLX)), both in poor financial shape, and with few synergies want to merge? BRILLIANT! This sounds like a dream short. Todd Sullivan sums it up beautifully.

Manitowoc acquires Enodis

Manitowoc (MTW) is an MFI stock to watch. It's been in and out of the screen recently, but operates in an attractive growth market and has excellent long term profitability numbers.

Crocs sold off 42%

CROX has been on the Magic Formula screen for some time now, even before this disaster. This one fails a cardinal rule of MagicDiligence: never buy into a trailing fad stock. This lesson applies to Heely's (HLYS) too.

Novatel pays price for product-cycle snafus

Here's another MFI entry getting sold off over 20%. A lesson for Magic Formula investors in action - beware of commodity firms, especially ones in technical fields. At this point, wireless hardware is a commodity, with tons of competition and fast changing technology. As investors, it's nearly impossible to predict future earnings, and management's failure to predict demand led to a big earnings miss here. NVTL is a junk MFI stock.

MagicDiligence In Action

The first analytical article published on MagicDiligence was Examples of Bad Magic Formula Stocks, published on February 7. In that article I provided four stocks that failed the four specific points used to weed out bad entries on the screen. The results since then for those four stocks? IAR down 66%. USMO down 39%. HLYS down 29%. KG down 14%.

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