My 2012 Stock Picks: Post Mortem

Monday, Dec 24 2012 by
4

Over on John Kingham’s site, I made a selection of shares for 2012. Let’s see what happened:

  • ASX – All-Share Index: +12.5%
  • MCX – FTSE 250: +26.1%
  • UKX – Footsie: +10.3%

Making comparisons is going to be awkward, because what there was a very big divergence between the indices. The MCX flew away, but the ASX lagged, weighed down by the relative sluggishness of the Footsie. So, should my base comparison be the ASX – because after all I’m trying to beat the “universe” of stocks – or do I bewail my performance for lagging the MCX, from which many of my ideas were drawn?

Afferro Mining Inc (LON:AFF): +23.1% I said that there was huge upside on this one, as you received the market cap in cash, and got the resources for free. Good call on my part, although it was far from a smooth ride for investors.

BLSA – Blacks Leisure (short position): -100.0% I said there was a high probability of going bankrupt, and this was indeed the case. It went bankrupt in mid-January, so you wouldn’t have had long to wait. To be honest, this one was like shooting fish in a barrel, because the directors had already warned that there’d be trouble. Some BLSA stores was taken over by JD Sports for peanuts. JD. reports that the stores are performing well, so it looks like the management have, once again, repeated their basic template of buying out inefficient bankrupt niche retailers and breathing new life into them. JD shareholders (which includes me) are going to be happy with this purchase. If you’re looking for a similar short for 2013: HIBU. HMV looks pretty bad, too, but not quite the “sure thing” of HIBU.

Domino Printing Sciences (LON:DNO): +18.2%. I reckoned it was a good quality company at a reasonable price, but for which I wasn’t expecting

Dechra Pharmaceuticals (LON:DPH): +23.1% A nice little GARP stock that pretty much did exactly what I expected it to. Would make a decent selection for this year.

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WM Morrison Supermarkets P L C (LON:MRW): -16.5% Well, go figure. It was reasonably priced at the beginning of the year, and became cheaper. The fall of the supermarkets was something I think that very very few people would have predicted at the beginning of 2012. It’s amazing that my safest investment also turned out to be amongst the worst.

Optos (LON:OPTS): -17.1% A GARP stock that just didn’t fire up. Revenues were up, but EPS was down. That position will swap around next year. The growth story seems unbroken, and it now trades on a forward PE of 8.7, which is undemanding.

Here are some means:

  • Cum-short: +21.8% (i.e. takes the BLSA short as +100%) 
  •  Ex-short: +6.2% (i.e. excluding BLSA)

Seeings as people don’t usually take short positions (I know I don’t), the best indicator of my performance is +6.2%. This has lagged the ASX by about 6%, so I am disappointed by my selections. One of the ironies is that AFF, which I thought of as my riskiest punt, turned out to be the best performer, whilst the least risky punt, MRW, turned out to have one of the worst. It even managed to underperform Tesco, where al the fuss and fury over supermarkets was concentrated.

Distinct lack of genius shown by me this year. Let’s hope my picks for 2013 turn out better.


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Afferro Mining Inc. is an iron ore exploration and development company. The Company holds four exploration permits in the south of Cameroon. Its projects include Nkout, Ntem, Akonolinga and Ngoa projects located at Cameron. Its flagship project is Nkout. The Nkout and Ntem projects cover an area of 250 square kilometers, respectively. The Akonolinga exploration project covers 245 square kilometers. The Essong exploration permit covers an area of 255 square kilometers. In December 2013, International Mining & Infrastructure Corporation Plc announced the acquisition of Afferro Mining Inc. more »

Share Price (LSE)
n/a
Change
0.0  0.0%
P/E (fwd)
n/a
Yield (fwd)
n/a
Mkt Cap (£m)
n/a

Domino Printing Sciences plc is a United kingdom-based company engaged in the research and development, manufacture and sale of industrial printing equipment, controllers and consumables for the high-speed printing of variable information. The Company’s trading subsidiaries are engaged in providing customers with coding solutions, which includes ink jet products, Laser products, outer case coding products, controller technology, digital ink jet equipment, Print and Apply Labelling Machinery and Thermal Transfer Overprinting products. In June 2012, the Company acquired 100% interest in PostJet Systems Ltd. (PostJet). On 28 March 2012, the Company acquired the customer database of Mikrojet Systems GmbH (Mikrojet). Mikrojet is based near Hamburg and is engaged in the development and sale of ink jet printing and ancillary equipment for the German commercial printing and mailing sectors. more »

Share Price (Full)
632p
Change
10.5  1.7%
P/E (fwd)
16.4
Yield (fwd)
3.8
Mkt Cap (£m)
699.5

Wm Morrison Supermarkets PLC is a food retailer. As of January 29, 2012, the Company had 475 stores across Britain, ranging in size from 3,000 to over 40,000 square feet. Its subsidiaries include Farmers Boy Limited, which is a manufacturer and distributor of food products; Neerock Limited, a meat processor; Wm Morrison Produce Limited, which produces packer; Safeway Limited, which is a holding company, and Optimisation Developments Limited, which is engaged in property development. During the fiscal year ended January 29, 2012, it opened 37 stores. In January 2012, it opened its third M local store at Grafton Street. On June 10, 2011, the Company acquired 100% of the ordinary share capital of Flower World Limited, a wholesale flower business. On February 28, 2011, it acquired the trade and assets of kiddicare.com Limited (Kiddicare), a multi-channel online retailer. On March 9, 2011, the Company acquired 10% in FreshDirect. more »

Share Price (Full)
183.3p
Change
1.1  0.6%
P/E (fwd)
13.8
Yield (fwd)
6.0
Mkt Cap (£m)
4,255



  Is Afferro Mining Inc fundamentally strong or weak? Find out More »


1 Comment on this Article show/hide all

Mark Carter 24th Dec '12 1 of 1
1

Just to clarify my thoughts on HIBU: it has little in the way of realisable assets. It has crushing debt, but postiive operational cashflow. I see the most likely scenario as being that HIBU will continue trading, at least in the short term, but with current equity holders actually, or effectively, wiped out in a debt-for-equity swap.

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Mark Carter

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I am a private investor living in Scotland. I am a computer programmer by trade.



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