Trending value performance update (Aug 2013 port)

This is a simple house keeping post on a quant portfolio from last year. In the comments section of my post last year on the Trending Value portfolio I linked to a Trending Value portfolio I created as of Aug 9 2013 to help some readers compare holdings in their versions of trending value portfolios. The link to that portfolio in Google sheets is here. The portfolio I reference here is the TV2 FCF NA 50 tab. Below I update the one year performance for that portfolio.

First, the snapshot at the close on Aug 9 2014 from my FINVIZ tracking portfolio is below.

First thing to note is that the portfolio lost 3 holdings during the year. It started with 25 stocks. There were 3 mergers/acquisitions during the year; SPRD, CGX, and ASI. Those need to be added back in to the portfolio at the merger or sell prices.

Second, and the most important portfolio change throughout the year was in ESI. On Feb 26, 2014 the US gov’t announced an investigation into ESI. That breaks rule #2 of the quant portfolio rules and the stock should have been sold from the portfolio. I waited a few days to do some investigating and sold ESI at $30.95, for a 4% gain. If the stock had been held  in the portfolio the loss would have been -71% as shown above.

Lastly, dividends need to be added to the capital gain returns shown above. The portfolio has a dividend of 1.24%.

I’ve added all these changes and return calculations to the original link for the portfolio.

All changes incorporated, the portfolio had a gain for the year of 17.7%, handily beating its closest benchmark the Russel 2000 which had a return over the same period of 9.8%. The SP500 returned 16% over the period.