2 for 1 ®

Neil Macneale’s

Stock Split Newsletter

Volume 20 Issue 8 2-for-1.com                                                                                      August 14, 2015

JULY SPLITS – OUR BUY PORTFOLIO ITEMS

his issue marks the beginning of the 20th full year ____of publication of 2 for 1. The first issue is still available on the 2-for-1.com website for anyone interested. These past nineteen years have seen the market battered by the dot-com bubble and crash, the trauma of 9/11, the housing bubble, and the Great Recession, all interspersed with two of the longest stock-price run-ups on record. Through it all, 2 for 1 has stuck to its methodology and has been handsomely rewarded with an 11.28% annualized return. Very, very few other newsletters or mutual funds can demonstrate a similar proven track record over such a long period. In addition to exploiting the Stock Split Ad-vantage, 2 for 1 also takes to heart much of the advice every investor has heard ad nauseam; diversify, dollar-cost-average, have a buy AND a sell strategy, be consistent, invest in real companies instead of gambling on pipe dreams or hot tips, etc., etc. All of this is folded into the easily executed strategy that has been 2 for 1 for all these years. With the licensing of the 2 for 1 Index® to USCF Advisers, the strategy is now widely available through their ETF, the Stock Split Index Fund (TOFR). So I take this opportunity to thank all the folks who have supported 2 for 1 over the years, and also to those journalists who have reported on it.

THIS MONTH’S SELL

19 Years and Counting T

n 7/29, Cytec (CYT) was “in play” because of a _____buyout announcement and its stock price immediately jumped about 26%. The buyer, Solvay, is a Belgian company not traded on the US exchanges.

Rather than waiting to determine if the buyout would be in cash or for Solvay stock, our position

in Cytec was sold immediately. Owned for less than a year, CYT’s overall return was 67.8%. The Vanguard 500 Index Fund had a 10.8% gain over the same period. Sale of Colgate-Palmolive (CL), the stock at the top of the ladder, will be delayed until September.

Cytec Industries O

here were several interesting challenges ____regarding the selection of this month’s addition to the 2 for 1 Index and model portfolio. First, there were only two legitimate split an-nouncements in July. Zillow’s (Z) July 21 split announcement doesn’t count because it creates a separate class of non-voting stock with a different trading symbol. Under Armour (UA) did the same thing in June and I included it in my evaluation. I have now decided to make this type of spilt automatically ineligible and will not include them on the monthly list for analysis. Second, one of the July splits is Reynolds American (RAI), a tobacco company. I would like to make all tobacco companies also automatically ineligible for consideration, but I realize this is more a personal prejudice than a business con-sideration, so I left it on the list for evaluation. Including a group of likely companies from previous months, along with July’s RAI and Medivation (MDVN), brings up Exponent Inc. (EXPO), a #3 ranked stock from the April list. EXPO is a scientific and engineering consulting company headquartered just about a mile from my house here in Menlo Park, CA. Trading a bit lower than its price in May, EXPO’s numbers improved enough in these few months to push it to the top of the list. EXPO’s valuation metrics are average to a little high; but a nice 1.4% divi-dend, very steady ±14% earnings growth per year, below-market volatility, and $0 debt all add up to make this a fine addition to the 2 for 1 Index.

Symbol Company Split Delivery Rank EXPO Exponent, Inc 05/28/15 1 SJI South Jersey Ind. 05/07/15 2 RAI Reynolds American 08/31/15 3 MPC Marathon Petroleum 06/10/15 3 ETE Energy Trans. Equity 07/24/15 3 ROST Ross Stores 06/11/15 4 MDVN Medivation Inc 09/15/15 4 HBI HanesBrands Inc 03/03/15 4 KR Kroger Co. 07/13/15 4

Exponent Inc.

10/14

7/15

 

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2 for 1 August 2015

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2 for 1 MODEL PORTFOLIO – JULY STATEMENT X # SH BOUGHT QUOTE QUOTE BASIS START END % OF AT ON MONTH MONTH PORT CASH BUY 07/31/15 $789.35 $18,701.55 4.91%

CL COLGATE-PALMOLIVE 160 03/18/13 55.822 68.020 8,931.59 10,465.60 10,883.20 2.86% AOS A. O. SMITH 200 11/15/10 19.147 71.820 3,829.39 14,396.00 14,364.00 3.77% TU TELUS 310 04/22/13 35.342 34.170 10,955.98 10,676.40 10,592.70 2.78% HOMB HOME BANCSHARES 440 05/20/13 21.173 39.820 9,315.99 16,086.40 17,520.80 4.60% AWR AMERICAN STATES WATER 340 06/17/13 27.054 38.550 9,198.49 12,712.60 13,107.00 3.44% BEN FRANKLIN RESOURCES 201 07/15/13 47.883 45.550 9,624.49 9,855.03 9,155.55 2.40% WST WEST PHARMACEUTICAL SERVICES 250 08/19/13 38.030 59.870 9,507.49 14,520.00 14,967.50 3.93% TSCO TRACTOR SUPPLY 150 09/16/13 65.317 92.520 9,797.49 13,491.00 13,878.00 3.64% DVA DAVITA HEALTHCARE PARTNERS 170 10/21/13 57.429 79.030 9,762.89 13,509.90 13,435.10 3.53% CNI CANADIAN NATIONAL RAILWAY 184 11/18/13 56.302 62.430 10,359.53 10,626.00 11,487.12 3.01% RLI RLI CORP. 220 12/16/13 46.470 55.230 10,223.49 11,305.80 12,150.60 3.19% TD TORONTO-DOMINION BANK 232 01/21/14 45.193 40.410 10,484.79 9,862.32 9,375.12 2.46% ITC ITC HOLDINGS 300 02/18/14 34.607 33.780 10,381.99 9,654.00 10,134.00 2.66% MLI MUELLER INDUSTRIES 350 03/17/14 30.554 32.370 10,693.74 12,152.00 11,329.50 2.97% AWH ALLIED WORLD ASSURANCE 300 04/21/14 34.667 42.260 10,399.99 12,966.00 12,678.00 3.33% AAPL APPLE CORP 119 05/19/14 86.355 121.300 10,276.29 14,925.58 14,434.70 3.79% UNP UNION PACIFIC 108 06/16/14 100.426 97.590 10,846.00 10,299.96 10,539.72 2.77% OTEX OPENTEXT INC 230 07/21/14 47.719 45.510 10,975.33 9,321.90 10,467.30 2.75% COLM COLUMBIA SPORTSWEAR 220 08/18/14 37.668 71.540 8,287.03 13,301.20 15,738.80 4.13% APH AMPHENOL 216 09/15/14 52.086 56.410 11,250.63 12,521.52 12,184.56 3.20% CALM CAL-MAINE FOODS 280 11/17/14 41.936 54.160 11,741.96 14,616.00 15,164.80 3.98% HAIN HAIN CELESTIAL GROUP 200 12/15/14 55.204 67.980 11,040.87 13,172.00 13,596.00 3.57% GNTX GENTEX CORP 660 01/20/15 17.395 16.080 11,480.79 10,837.20 10,612.80 2.79% NJR NEW JERSEY RESOURCES 380 02/17/15 31.920 28.900 12,129.73 10,469.00 10,982.00 2.88% MGA MAGNA INTERNATIONAL INC 232 03/16/15 52.018 54.360 12,068.19 13,012.88 12,611.52 3.31% SBUX STARBUCKS CORP. 260 04/20/15 47.963 57.930 12,470.36 13,939.90 15,061.80 3.95% PPG PPG INDUSTRIES 108 05/18/15 115.977 108.380 12,525.56 12,389.76 11,705.04 3.07% NTT NIPPON T & T 350 06/15/15 35.340 38.630 12,368.84 12,701.50 13,520.50 3.55% CF CF INDUSTRIES HOLDINGS 180 07/20/15 67.136 59.200 12,084.39 12,084.39 10,656.00 2.80%

TOTAL CASH AND EQUITIES $303,013.29 $381,035.28 100.00%

               ACCOUNT VALUE SUMMARY - 7/31/15 Description Amount

   ANNUALIZED RETURN 7/31/96 – 7/31/15 2 for 1: +  11.28% Vanguard 500 Fund: +8.36% (all costs and dividends included for both)

THE FINE PRINT The above list represents all of the securities recommended, bought, and which are now present in the 2 for 1 portfolio, an IRA account with E*Trade in the editor’s name. The 30 stocks on this list constitute the entire 2 for 1 portfolio. The graph of the performance of the 2 for 1 portfolio to the right was adjusted to equal the Vanguard 500 Index Fund at the end of July, 1996, adjusted for and including dividends. The Vanguard 500 Index Fund tracks the S&P 500, an index tracking the 500 largest U.S. companies. 2 for 1 tracks the 2 for 1 Index®, based on a portfolio of 30 companies, large and small. The 2 for 1 portfolio was started in July, 1996 with $50,000. The $303,013 basis above reflects $253,013 in capital gains, dividends, and interest accrued since the portfolio’s inception. It shall not be assumed that recommendations made in this issue of 2 for 1, or in any future issues, will be profitable or will equal the performance of the securities on this list.

              PORTFOLIO PERFORMANCE

97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15  

2 for 1® is published and distributed by Neil Macneale, Inc., 140 O’Connor St., Menlo Park, CA 94025. Phone 408-210-6881. E-mail splits241@2-for-1.com. Neil Macneale, Inc., dba 2 for 1®, is not a broker and does not offer individual investment advice. 2 for 1 is published each month on the Friday closest to the 15th of that month. Contents are copyrighted but may be copied or quoted if attributed to the source. 2 for 1 subscription rate = $20.00 per month for electronic delivery, payable by automatic monthly debit from any major credit card approximately one week prior to publication. No long-term commitment is required.

 

Last Month’s Closing Equity Change in Stock Value Interest & Dividends This Month’s Closing Equity

$370,379.24 $10,063.39

$592.66 $381,035.28

Vanguard 500 Index Fund

400k

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2 FOR 1