Zecco After 2 Months; 3 Magic Formula Picks

Here are 3 Magic Formula picks that might be worth investigating. I probably won't be making any more transactions this year, since I've got 7 Magic Formula positions (FCX, FDG, PALM, PLAY, OVTI, PWEI, EGY). I'm glad I avoided Addudell (looking at the company's history, they seem to completely change their focus to match whatever the hot sector is at the time). I wish I had bought some PNCL (up 29% since 11/6). PLAY was a big winner, with the buyout, and FDG has almost recovered from the big sell-off after the talk of Canada changing its tax treatment of trusts.

Also, Zecco does pay interest on deposited funds, for anyone wondering about that. The yield on the money market fund was 4.35% last month, competitive with my ING account, but not FDIC insured. Zecco is not the place to store your cash, it's a place to buy stocks with zero commissions.

Now, on to the Magic Formula recommendations:

• Biovail (BVF) develops different formulations for drugs for better effectiveness. It's currently $20.45/share, with an Earnings Yield of 15% and Return on Capital over 100%.
  
  Despite the expected January 2007 launch of a generic version of Wellbutrin, Biovail's top product, the company has forecast earnings for 2007 of $1.75/share, above Wall Street's estimates. They announced plans to eliminate their U.S. salesforce, retire debt, and increase research spending, as well as triple their dividend (to $1.50 a share) and pay a special $0.50 dividend in January. That's definitely intriguing to me, a big fan of dividends.
  
  
  
• CCA Industries (CAW) is in the business of health and beauty, with a variety of products (such as Plus+White and Nutra Nail) sold at drug stores and other places. It's currently $11.72/share, with a 14% EY and +100% ROC. The market cap is only $82 million.
  
  
  
• EPIQ Systems (EPIQ) is a software and services company that specializes in legal matters, and stands to benefit from any increase in bankruptcies. $17.02 is the current share price. It has a 16% EY and +100% ROC, with a market cap of $331 million.
  
  

Performance of Recommended Stocks

Here is a Google spreadsheet that lists the stocks recommended by the Magic Formula, and each one's performance since it was mentioned here.

November Portfolio Results

I didn't get a screenshot of my Zecco portfolio from the end of November, but I must admit that I have been so pleased with Zecco and its 0$ commissions so far, that I've started using it for my non-Magic Formula investments, as well.

November was a bad month for Fording Canadian Coal Trust (FDG), with the proposal for changes in Canadian tax law causing a significant drop.

I've created a
Google spreadsheet, showing the portfolio and comparison to the major indices

The results are not too impressive, but I expect that to change over the next year.

I'll make another spreadsheet showing all of the stocks I've highlighted from the Magic Formula lists, and what sort of returns they achieved since the date I mentioned them.