- PURP +10.5%
- BOO + 8.4%
- G4M +7.46%
- SOM +7.22%
- AIR +2.83%
- LAM +2.62%
- TET +2.23%
- ALY -2.56%
Portfolio up 2.671%
No purchases or sales.
Portfolio up 2.671%
No purchases or sales.
What I am reading this week?
What am I listening to:
What I am researching
Portfolio up 1.064%
One purchase this week G4M. 2.5% of ex-cash portfolio.
This should have been published the day after AVS agreed to a takeover but for some reason that didn’t happen.
I posted back in September:
“I also topped up Avesco. This is a sound undervalued company with good metrics and Stockranks. I anticipate continuing to buy this on the way so that it joins BOO, FEVR and BVXP as fourth heavily over weight holding in the portfolio.”
AVS is currently 5% of the portfolio”
As many (though not if you read the FT, it is not even mentioned) of you will know now AVS was on the end of an agreed takeover offer from NEP Group Inc yesterday (RNS) at a 125% premium to the Wednesday 16th closing price.
To see the RNS come through and then take in what it meant was an amazing sensation. Though whether it will ever be repeated to this degree I am not sure.
It was Paul Scott over Stockopedia on his SCVR who lit the spark. I would love to be able to say and as wrote in column yesterday:
“Unfortunately (or fortunately!) I don’t have the time to analyse the s@&t out of stocks and looking back at my notes I was simply attracted by the ROA etc figures, the divi growth and the fact that it on Stockopedia figures it was trading below book. That was enough for me.”
I still have a business test takes up huge amounts of my time and this simply does not leave the time to spend ages and ages on analysing a stock to make sure it is not a mistake waiting to happen. But I believe:
So I continue to invest, read and learn as I go along. Yes there have been some bumps along the way and we have been in a generally rising market but I am well ahead of any metric you want to use. Now I must make sure I am not complacent.
Anyway back to AVS. Before yesterday AVS was about 6% of my ex-cash portfolio and was my 6th largest holding and it had been my intention to top up to the 10% of portfolio level. As I write (18/11/16 10:07) it is now 14.1% of my portfolio showing a gain of £20,592. Most, though not all, of that came yesterday.
This is one of those shares that when I reflect on it makes me feel like a fraud benefiting from tips, luck and a rising market! I ask why am I in this stock? I am not sure I can answer this one.
I can’t remember why I bought AVAP. I first bought in June 2015 at 155.7p and sold out 2 months later at a small loss because I did not understand why had bought the stock. I then bought back in this year at 139p in September, and topped up on 16th November and 18th November at 190p and 191p respectively. It is now 4.2% of portfolio as I write, so not large for me and definitely not conviction size.
I am now sitting on a 14% gain after two months and I am tempted to exit on the basis:
FIF was a stock I purchased initially back in March 2014 at 57.10p and then at 105.8 in February 2016. The reasons? They are lost in the mists of time!
Looking back at the Stockopedia Stock Report for March 2 2014 I can see that:
I made a small purchase equivalent to about 3% of my portfolio inc cash.
I should have been purchasing more on the way up but was yet to learn the benefits that this can bring to a portfolio.
The second purchase in February this year was well timed (luck not judgement) as give or take 105p is the YTD low but if I had known I was going to sell out so soon I probably would not have bothered. That said I have seen an 11.0% + return in 9 months on this second purchase so not to be sniffed at.
Anyhow at some point I learnt about the FIF LTIP. I am not a fan of these and especially when they seem to give directors pretty big chunks of my company for nothing. Taking the RNS (Investegate) from April this year where it talked glibly, in my opinion, about
“have been issued 1,102,957 and 1,214,867 Ordinary Shares.”
“cash amount of £1,196,503 and £1,317,904 respectively will be paid to meet the PAYE and national insurance payable in respect of the settlement of the options.”
This is a company with a market cap of £150m and annual profits of around the £8m mark (Stockopedia shows an estimate of £13m for this current financial year). Surely these figures are too large for this size of company and shows that directors and shareholders interest are not aligned.
This was simply too much for me and I sold half my holding on May 17 at 113.6p.
I then sold the rest of my holding last week (28/11/2016) at 117p for total return ex divis of 63% over the period. My initial investment was up 100% give or take in the 32 months I held them. Overall a very satisfactory return.
Now we will just have to wait and see whether my instinct was right in the same that it was with VLK.
AIR released Interims today. Full details on Investegate. They look very healthy to me and I am glad I have stuck with this stock. Though I did have a slight wobble back on 29th August when I sold 1,127 shares at 370p, which as it turned out was a low! I should have shown more backbone.
It is currently 8.6% of my non cash portfolio and very volatile for reasons unbeknown to me. However the volatility recently has been all one way – up.
The price having risen from 370p since the beginning of July to the present price of 490p. I should have picked some more up after the referendum result when the price dropped to 329p. How utterly rediculous that it fell at all, let alone to this level, but I failed to do so and I am only just getting comfortable with large holdings as a percentage of my overall portfolio. That would have been a 50% gain in three months.
I am tempted to pick some more up to take the holding to 10% of the portfolio. I will think on it today and see. It has good Stockranks of 84, 68 and 74. With an overal rank of 93. It has the following relevant(to me) figures:
Historic PE – 16.8
PEG – 0.49
ROCE – 18.6%
ROE – 14.2%
Divi Yield of around 5.5%
Turning to the chart the share touched 620 back in January 2014 and declined steadily ever since (I suspect because Mr Market got board). I would have thought that this sort of level would be a reasonable target in the short to medium term so I am very happy to hold and possibly top up.
One downside on this stock is the spread which is in the region of 690bps. An aspect of stocks which I still don’t understand!