I do think it is important to restate that the guy who goes to the casino and bets it all on number 15 can have great short term returns, but he is gambling not investing. He is not even trading. And as the possibly greatest trader Jesse Livermore committed suicide I am not aspiring to be a trader. I think it is Munger who said I know old traders and bold traders, but no old bold traders.
Within the portfolio itself most of my holdings had a good month with material growth in APF, $AAPL, $DIS, FXPO, TET,
Material falls were $GOOGL, and a private equity position which I decided to mark down to zero. Coronavirus has decimated the business and the founders need to feel that from here they can prosper.
Intelligent readers will realise that I am much more likely to have a material move in my larger positions.
Sold some MPAC. I think this is a good company, with good management, but it is well over 10% of my portfolio so I sold some. Profit circa 195%. I still hold the majority of my shares. I have also become less impressed by management communication with individual investors. A few years ago it was relatively easy to get a sensible response to a query from the CEO Tony Steels. That response might be I am sorry this is market sensitive so I cannot say anything but it was invariably timely and polite. I know a few people who have held the company since the £1 days and we have generally felt the company has been shareholder aware and the quality of my responses from Mr Steels were not unusual. However in the last two years the CFO has taken on more responsibility for these communications and as the share price has gone up his responses have become more terse and more don’t bother me speak to my staff. This does not endear the company to me, the shareholders are still the owners however much the current success may be due to the management.
Heard from a few people about S&U. Did a little work and thing that it could be well positioned for a post Coronavirus world and NTAV is at 1.2. Not particularly exciting but not massively valued. Downside looks to be well covered and potential upside if it can deliver or indeed if some of the competition leaves the market allowing margin increases. On the 9th December the TU was in my opinion very bullish so I added a little more. My average in is now 1874p
FCSS came out with a strong, but not unexpected, ½ year report. Whilst this was as expected it was good enough that I added to my holding. Average in now 380.62p.
REDD came out with decent but Covid hit ½ year results. The business seems well capable of delivering a PBT of £70m with little additional effort and some luck this could go to £100-110m. With a market capitalisation of £600m this seems good to very good value. The NTAV is circa 1.2 and the cash generation looks to be circa £90m pa so well able to support the debt. The company does use rather a lot of “adjusted”, “underlying” and “EBITDA” numbers in reporting the accounts which does for me make it slightly concerning as these are invariably not real numbers. But after discounting these I have added a little to my holding and raised my target price. My average in is now 214p.
$DIS did an investor event that was very much geared towards streaming as the future. Still very unclear how this will role out given DIS portfolio still includes a lot of TV content ABC/ESPN, but it was well received by the market.
$ABT increases its dividend 25%. But it still gives a yield of less than 2%.
Took a small opening position in MSI plc. Mkt capitalisation £23m. Cash available £14m. But a lot not to like. Big part of the business is in petrol stations and forecourts. Not the growth business of the future. Large pension liabilities. Loss making at the current time. Investing heavily in R&D looking for the next successful product. A large part of the cash is in escrow to support various guarantees and debentures so not easily accessible. And this looks to be a recent requirement so presumably the bank is not that supportive. Shares are thinly traded and the spread is criminal. My buy price was 139.8p on a 120-140 spread. On the plus side the Directors own 23% and if you deduct the cash and look at historic results they could be on a PE of 4. Currently 40% below the 1st Jan 2020 price. Given the cash I have taken a small position with a long watch brief. If it falls too much (circa 20%) I will sell, otherwise I am going with the Walter Schloss metrics of looking for 50% and setting a 4 year timetable. That being said a few people have also pointed out to me that the Directors whilst holding 23% have also been paying themselves exceptionally high salaries given the generally weak delivery.
AV. Announced the sale of its Vietnamese operation. Financially nothing special but I am increasingly impressed that the new CEO has been able to take decisive action where her predecessors have so clearly not. Whether she is heading in the right direction has yet to be clearly demonstrated but the inertia discount should now be fully removed. I have raised my target price, but I do not think that at current levels the company is substantially undervalued so am not adding at the moment.
Sold $AAXN for a 10% gain. I like AAXN as a company. I think management are well focussed and in the right marketplace. Overall it is a good to very good company. However whilst I did over the last few months add to my existing position I have concluded that even though this is a good company the valuation is ahead of what can be delivered in the next couple of years so I sold.
PPHE sold about ¼ of what I had bought since May. 60% gain on overall price.
The core of my holding is a long term position in a good, well run company, where the management regularly say what they are going to do and then do it. However being in the hospitality and hotel industry the shares got very heavily hit by Coronavirus.
Not at their lows, but as they rebounded May- Sept I added some. Now the share price is higher I took some profit. In my opinion the share price should go higher over time, though this may well be medium rather than short term. I am happy holding a substantial position but given the sector am happy to take profits on the opportune buy.
Bought an initial position in $EDIT. This is an addition to my medical holdings. With the exception of ABT, IHCU and GSK they are all rather high risk, high reward so the principal is a basket with not big exposure to any one until it grows into that exposure.
Also added to GSK. I have been doing more research on this and I have become more comfortable in my valuation so felt able to add. Average in at 1,334.25p
Whilst none of them moved the portfolio materially (they are all small starter positions), the Lithium basket had a good month. It does currently seem to be an unusual market in that the analysts are not in consensus. I read that the market is in wild oversupply and will be for years and that the market is in massive undersupply and also for years. Whilst I like to think I am always learning, clearly with Lithium my knowledge starts from a low base.
As always DYOR and have a prosperous 2021.