Stock Picks | Boon's Fund Recap - Q1 2024 : Treading Water & Struggling To Break Through

6th Apr by Boon

21 comments 1150 reads

YTD to end Mar 2024 : -1.3% vs FTSE All-Share benchmark +2.5%

CY2023: +9.7% vs +3.9% benchmark

3yr (2021-2023): +49% vs +15% benchmark

Detailed writeup for Jan, Feb, and Mar monthly performance available on my Boon Fund substack. On Stockopedia, I will be writing a quarterly abbreviated summary.

Performance YTD

There is no sugar-coating it; I have struggled in the first quarter of 2024, adrift from the benchmark by 3.8 percentage points. I had ended Feb almost neck and neck (-0.8%) but the stunning gains in the FTSE All-Share, driven by the FTSE100 following the momentum of US Indexes, left my mainly AIM and FTSE250 shares behind. In addition, my largest position, Direct Line Insurance (LON:DLG), sank heavily with the takeover offer from Ageas fizzling out.

However, as I've come to realise from my style of investing, the vast majority of my gains come from a few months of the year. Hence, with 9 more months to play, I am optimistic. All it takes is one takeover, or two or three of my shares re-rating and delivering my 40%+ goal, to deliver some serious percentage point gains for my overall portfolio. With only 8 shares that are each larger than 5% of my portfolio value, I run a decently concentrated set of holdings.

Meanwhile, the US Markets keep powering on. Breadth (DMA200) in the S&P500 is around 80%, which is the highest its been since early 2021. What started as just a few tech shares powering the rally, has now lifted all boats. In the UK markets, breadth is a bit lower, at 65% for the FTSE100 and FTSE250. Still impressive, and indicative of further market momentum for a bit longer. AIM100, however, is still struggling to gain momentum, with breadth of 35%.

While on valuation metrics, none of the UK indexes scream good value at the moment, I have to acknowledge that the emotional side of investing is a big component of price movements. It looks like, given the breadth indicator as well as general optimism of a soft landing, we might see shares power up further for a while longer. I’m therefore going to selectively deploy more of my cash in April.

I’ve had a few buy price alerts triggered at the end of March, so there is plenty of optionality for me to deploy more…

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Boon

7th Apr

Indeed! I find the Stocko community buy rating useful in sense-checking whether I'm sucked into the FOMO.

I know it is an imperfect measure. But when I see a Buy percentage of 30%+, it feels like the share is too crowded with PIs, and therefore either the bull case is already well known, and/or the pricing is already up with events.

Hopefully, my investment principles continues to be profitable in the long run!

SCI20

Boon that is a really interesting metric that I must confess I have never considered. Have you measured the success of this approach?

Rusty2

I found the Stockopedia community ratings to be highly inaccurate..

I have not scientifically. I have started tracking the ratings in my watchlist, manually. Have about 1-2 years of data, will have a look when I have enough buys/sells.

Inaccurate in terms of.... actual buys/sell volumes done?

I have seen that when there is a lot of "chatter" on paticular shares on the Small Cap Value Report, either by Paul or Graham write-ups, or by the discussions, that the Buy rating typically goes 25%+.

Wish Stockopedia would shed more light on how this rating is calculated, etc. Let us peek under the hood.

But a lot of that is just people putting shares on watchlists. I can't believe some of the figures. Once there was a tin pot mining penny share Amur Minerals (LON:AMC), apparently 60% of the community owned it, at one time, some ramper was saying it was the most held stock by Stockopedia members. I spoke to Stocko support about the accuracy and they admitted it was just an indication of interest. They seemed to think that the Folios were peoples actually holdings. It seems to be based on the folios.

I have lots of watchlists with transactions on them, then I can see the performance. Some stocks are on many of my watchlists, does not mean I own any shares. In fact only 2 of my 13 folios have actually holdings on them.

Apparently 45% of the community own Super Micro Computer (NSQ:SMCI) which I find odd, doubt 45% even own US shares. If it is so owned, why are there is very few comments about it from members? I mentioned it a few times, as people kept mentioning NVIDIA (NSQ:NVDA) and the magnificent 7. Megan did have it in a recent article. I sold my shares a while ago.

But it is a fair point, when everyone is talking about something it is usually the time to sell.

The most talked about stock on here must be Boohoo (LON:BOO) and look how that has performed.

WarrantStar

Hi Boon. It's interesting to see how you use the data on community ownership. I would like to point out that the widget shows the CHANGES in community ownership over the last 3 months, rather than the current ownership profile. I also reckon that where it says HOLD what it actually means is the percentage of the community that has neither bought nor sold in the last 3 months. If anyone clicks the little blue question mark next to SHAREHOLDER ACTIVITY, then it takes them to explanations page.

I use the data in a very different way to you. What I do is to calculate the ratio of community buyers to sellers over the last three months. For me, it is a case of the higher the ratio the better, because it shows how the ownership has been increasing over the last three months. I am looking for a momentum type effect here. If there was more sellers than buyers in the community then I would be hesitant to buy.

So we are both interpreting the data in opposite ways at the moment! Let's see what other people think about this.

Had a look at one watchlist and Tortilla Mexican Grill (LON:MEX) was by the far the highest at around 45%, l would be very surprised if that was accurate for members ownership. Yes I have it on one watchlist but never owned it.

LeicesterPete

Very good write up, thanks for sharing. I too have been tracking ECO Animal Health (LON:EAH) however I haven't invested and was put off by the trading update last month, revenue in line with expectations, but no word on profit. I treat this as a bit of a red flag having been caught out in the past on another share that subsequently issued a profit warning when only revenue guideance had been previously issued. I do agree with your case for investing and it was only this recent update that has kept me on the sidelines. Good luck and I'll be watching for news end of this month. BTW my portfolio has treaded water this year, one share moves north, another then pulls back, but lots to be positive about going forwards.

8th Apr

Ah, I have to clarify that I don't literally take the Buy percentage as ownership or real buying...

For me it is a relative measure. A stock with 40% Buy rating means much more investor interest (whether actual buying, or watchlist) than a stock with a 5% Buy rating. Therefore, it is a gauge for me on the "bullishness" of the community as a whole towards a share. And as WarrantStar mentions, because it is for the last 3 months, it is a good indication, of potential PI recent buying and interest.

WarrantStar: I like your idea of using the ratio instead of Buy/Sell instead. I might be that a try!

On Boohoo (LON:BOO) - this is how the community rating looks like for the last three years. Back in Apr21 the share price was near the all time high of 340p.... now at 36p...

I don't know how Stocko calculates the %s, they were rather vague when I contacted them, I can't believe how high some small caps are. I thought many Stocko members held large caps, that is is what Ed's posts have led me to believe. Yet most large caps have low figures below 10%.

I can see why there is interest in some small caps and I suppose the popular ones, many will add to a watchlist. Going through my folios, there were only a few around 40%, Journeo (LON:JNEO) is one, no surprise but Knights group (LON:KGH) I did not expect. A few I thought would be higher.
Tortilla Mexican Grill (LON:MEX) is the highest I have seen, so far at 45.6%.

My comment on Boohoo (LON:BOO) was more about the numerous posts, must be 1,000s, rather than community ownership.

And this would chime with the high Buy rating back in 2021; as many would have either bought or added it to their watchlists at that time. The share price was high because there was enough investor demand in the market to chase it up to that price.

Nowadays, no-one talks about Boohoo (LON:BOO) anymore... I suspect most investors have it on a "bargepole" list; absolutely refusing to consider investing. For good reason, of course. But that also means that very few people would be paying attention if management are able to fix, steady the ship. Plus, the share price would be extra depressed, as so many investors have ruled themselves out of considering to buy, so there's a lack of demand. The perfect ingredients for a multi-bagger IF a genuine turnaround happens.

sheeza

9th Apr

Thank you for putting me on to Phoenix group (LON:PHNX) in time to catch the good things coming from Standard Life. I'm wondering now how far you think it might go. There seem to be so many chasing pension funds that the easy pickings must now be gone. Hopefully PHNX will continue to yield well, but are there still worthwhile upsides?

I have a sell target price of 710p+ for Phoenix group (LON:PHNX) - this is taking the FY23 dividend (53p)... and IMO when the market gets bullish about Phoenix and its cash generation and growth prospects, then the valuation will get to around 7.5% dividend yield, in line with other insurance peers that have a bright future.

There are two interesting articles about Phoenix out in the last few days. One is The Times Tempus "share tipping" column - very positive about its cash generation prospects. The other is a City AM piece about Phoenix championing being supportive of Hunt's goal to get pension funds to invest in British growth companies? I suspect this is just a way to be able to charge more "management fees", while of course taking none of the risks and liabilities of investing in riskier assets... but hey, more fees means more returns to shareholders of Phoenix...

10th Apr

Thank you taking the time to respond, and congratulations on your expertise.

Just looked at AdvancedAdvT (LON:ADVT) never heard of it before, apparently 62.5% of the community has bought it. Maybe I missed something when l was away? I have queried some of these and how it is calculated with support, if I get an answer, I will let you know.

doug2500

11th Apr

I suspect there's quite a large overlap between Stocko and Mello communities which may go some way towards an explanation. The CEO is a very convincing character with a strong history and is willing to present on Mello.

62.5% does seem awfully high for such a stock, though.

I don't think the 62.5% literally means that 62.5% of the Stockopedia member base bought it in the last 3 months?

It probably is just... "ADVT is in X number of portfolios currently. Y times it was entered as a buy (with some trade/£ value) into a portfolio in the last three months."

With Y = 0.625 of X

And as you mentioned, Stocko doesn't actually know whether its a real portfolio, or a scenario/fantasy one.

But whatever it is, it indicates some level of "interest" by investors. And judging by the share price chart from Jan to Apr... looks like there has been real buying interest too...

I doubt believe it either, trying to find out how Stockopedia calculates it, but nothing so far. A few years ago Stocko did seem to think these were real folios, until I explained that most of mine, were watchlists with amounts on them. Without amounts you can't judge the performance.

Boon's Fund Recap - Q1 2024 : Treading Water & Struggling to Break Through

Performance YTD

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