I have no real idea where the markets will go in 2020 but am increasingly finding it hard to find new real value ideas and am therefore looking to either back the proven managements of my existing portfolio or sit with cash on the sidelines waiting for a better opportunity.
Significant Gainers
Aeorema. This is a micro cap and a small bit of buying causes a significant move. At the moment trading in this share seems to be very much at the whim of the market maker. There are buy orders in lower than the current share price and the MM seems to be looking for a few of these to crack and move higher. This delays/removes the normal drip down between results as the size of the company means there is no regular news flow.
Apple. As I said last month this continues to be an outstanding share for me. Whilst I halved my position a few months ago the residual (circa 3%) of the portfolio is capable of rising by a material amount. Currently there seems to be an ongoing series of upgrades coupled with more analysts believing in the move to services story. Even some of the naysayers seem to have come round to suggesting that whilst Apple may not have the greatest future it is not highly valued under almost any other metric. This sits alongside the increasingly positive news that Apple is generating about moves into India.
Bed, Bath and Beyond. Firing 6 senior members of the management team has continued to drive the positive view the market is taking on this share. It does not prove the new CEO has a plan, but it does suggest that he is prepared to act and hopefully take on one or more of the many initiatives being suggested by activists for this business.
Billington. Put out an RNS saying they expected to beat profit expectations. Share price popped. It has come down a little from the high but seems supported at current levels.
Bovis. A Conservative victory floated a lot of boats few more so than the builders.
Cenkos. One of the founders and former CEO took a disclosable stake (7%). The share price reacted positively.
ELTA. Full year results not only disclosed that the revenue from recent disposals will be largely paid out in January 2020 but also that the two larger trading operations TGI Friday and Hotters have, after investment, both traded well and in ELTA’s opinion increased in value well beyond the investment. Reiteration was also given to winding the whole business up and paying out before 3 years are up.
MPAC. In July the shares traded at circa 210p after a v positive trading update. By December on no news that had dropped back to 165p. There seems to have been a recognition by a number of investors that there was value and small but steady buying had driven the price up.
Treatt. Last month I said I was underwhelmed by the latest numbers. A bit too much jam tomorrow and far too many adjusted numbers. But WDIK. The forward outlook was positive and this has been reflected in a strong rise over the month.
Significant fallers in the month;
Disney. Whilst last month saw an exceptionally strong rise on future expectations mainly around Disney+ this month has seen a steady decline presumably as holders have banked some of their gains. That said there have also been some analysts that still feel Disney+ is not as compelling as other suggest and that the entire direct to consumer digital space will be a long war and less profitable because of this.
Significant Sales
COST. Bought under Value/Momentum the indicator had turned to sale.
MERC. I wrote a blog post earlier on why I had lost faith in management and why as a result I decided to sell. To be fair management have made such a hash of the share issue that there is probably value in the company. But one of my few strict rules is sell when you completely cannot trust the management.
NCCL. Management have been promising much for the last three years, any day now. This kind of reached a crescendo in Q4 last year, but true to form nothing was delivered. What management did do was give themselves a loan rate over 12% on loans to the company and yet another raft of options. Do I think there is value in NCCL-yes. Do I think management intends for it to end up with retail investors-no. As someone who thinks most management seek to put themselves very much first NCCL still seems to be able to leap past my bounds of impropriety.
Significant buys
BILN; Added a few after the profit upgrade
$DIS; Long term I think this is a great company that with Disney+ will continue to succeed
$GOOGL; Another great company with a large cash pile. There are regulatory concerns but I think the company is increasing its focus on delivering value and the departure of the founders reflects this, as what interests them (moon shots) is less and less what the business is about.