My Stock in Focus screen is throwing up slim pickings at the moment. All five of the qualifying shares at the time of writing are already in the portfolio. I’m hoping for more choices next week. As this will be the last SIF portfolio article published in January, this week’s focus will be the portfolio’s monthly review.
There are four stocks up for review this month, each of which has spent at least six months in the portfolio. (Each company name is linked to my original article on the stock):
- Gift packaging and greetings firm IG Design
- Fresh producer group Total Produce
- UK car dealership group Cambria Automobiles
- African gold miner Pan African Resources
IG Design, Total Produce and Cambria Automobiles have now been in the portfolio for six months, so are due for review. Pan African Resources has been held for longer, so is kept under review each month.
Giftware group IG Design had a StockRank of 97 when it joined the portfolio in July. It also qualified for the Jim Slater ZULU Principle, Naked Trader-esque and Value Momentum screens. All three of these have delivered annualised returns in excess of 20% since their inception, so my hopes were high for a solid performance.
IG Design hasn’t disappointed and trading has remained strong. The shares have risen by almost 50% following in-line trading updates in August and January, and upgraded guidance with the interim results in November. Paul Scott was impressed on both occasions and commented that the group might continue to grow into its valuation.
I share Paul’s view that this is a good company with good management, but this stock has now been in the portfolio six months and dropped out of the SIF screen. As a result, I’ll be selling it from the portfolio this week, in accordance with my rules.
One interesting point is that IG Design’s StockRank has fallen to 75 since it joined the portfolio. The shares now trade on 16.9 times current year earnings and the yield has dropped below 2%. Is the StockRank forewarning us that the value is already in the price? It will be interesting to see how the shares perform over the next six months.
IG’s share share price has risen by…