Following my post of 22/10/18 here are my first 3 selections for my Compounder portfolio. I intend to post at the beginning of each quarter so the next one will be in early 2019. In future posts I hope to give a bit of a preamble covering any company announcements and also summarise the income and investment yield of each of the portfolio constituents.
I wont be running a fantasy fund on Stockopedia because it doesn’t allow you to build a portfolio gradually and ignores dividends. I have therefore used a live price quote obtained on the day of the post (based on a notional investment amount of £10,000 including dealing costs) as the reference point for the future yield calculations.
Please note I hold the shares of the companies mentioned (either existing holdings or have bought them on the day).
NB I referred to OCF/EPS and FCF/DPS as the cashflow ratios of choice in my original write up. For ease of calculation I have decided to use OCF/Operating profit and FCF/cash dividend paid. These may be different to the other ratios in absolute terms (the main difference being that OCF is net of tax in the ratio used) but they still serve the same purpose from a relative perspective.
City of London Investment Group City of London Investment (LON:CLIG)
Market cap: £100m
Sector: Investment Banking & Investment Services

High margins
Niche business
Remuneration structure
Clarity of strategy

Changes at the top this year and next
Financial markets exposure

Business Fundamentals
THE Compounder screen currently contains 5 names in the general financials space (excluding the estate agents): Brewin Dolphin Holdings (LON:BRW) , IG Group (LON:IGG) , Numis (LON:NUM). City of London Investment (LON:CLIG) and Polar Capital Holdings (LON:POLR). Two further names Jarvis Securities (LON:JIM) and Jupiter Fund Management (LON:JUP)…

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