Buy In May and Go Away?

Once a useful idea like "Sell in May and go away" has become a commonplace, penetrating the mind of the masses, it becomes useless. It has lost its power. Value investors, and especially Magic Formula investors, must be willing to move when they see a bargain. We can't be contrary just to be different. We don't run into a burning building because people are fleeing in terror. We do, however, want to pick through the ashes and see if anything good has survived. And so it is with the stocks today:

• Intevac (IVAC) has a market cap of $446 million. It produces sputtering equipment for manufacturing computer disks as well as imaging sensors, and recently dropped on lowered guidance. It has 16% EY and over 100% ROIC. It's currently trading at $21.05. Will the company be able to maintain its ROIC? That's the question. Seagate is its main customer and they have reduced capital spending.
  
  
• Mocon (MOCO) has a market cap of $59 million. It specializes in measuring gases and chemical compounds. It has a dividend yield of 2.75%, EY of 11%, and ROIC of 75-100% pre-tax. It recently announced some bad news: though profits were up 5%, income was down dramatically due to the opening of a support office in China. It's $10.90 a share.
  
  
• Williams Controls (WMCO) makes electronic throttles for big rigs in China. It's a small company, with a market cap of just $132 million at $17.83/share. It has a 12% EY and 75-100% ROIC. In this case, we're fleeing the burning building of the US and checking into Hotel China. The place is crowded, but management is expanding. Please don't mind the mess.
  
  

The Magic Formula strategy is to buy these stocks and check on them in a year, not watch them every day.