LON:CCC | Computacenter - An Improving Story And Super Stock

31st Aug '17 by Sully8786

3 comments 6247 reads

Buying into a Super Stock

When I first bought shares in Computacenter (LON:CCC) I had split the proceeds from the sale of my Avesco shares following the latter being taken over.

I split the proceeds into 3 different companies:

DCC (LON:DCC) - 50% of the cash went into this share, and I've recently exited this position at a healthy profit;

SCISYS (LON:SSY) - 20% of the cash found its way into a position in this software company as the business turned itself around from some difficult trading in the prior year. It was initially a Super Stock, but has since fallen from grace following concerns around the funding of the European Space Agency as the UK exits Europe;

Computacenter (LON:CCC) - The final slice of the pie bought me what at the time equated to around a 4.5% portfolio position. I had been following this company for a while, and finally bought shares in November 2016 at around 733 pence.

The Chairman and his wife had been spending big on shares, and I liked the way that management announced results and trading updates by tending to tell it like it is.

In addition the above factors, the company was showing a respectable Stock Rank of 92 at the time with momentum appearing to be on the up following the first half of 2016 being quite a poor start to the year, but a reassurance from management that trading was still in line and not getting any worse.

Since my purchase there have been only 4 announcements.....

Continuing to Trade in Line

As per the January Trading Update management indicated that trading had indeed stabilised in the UK and France, while Germany was continuing to trade well.

The Stock Rank remained at 92 and I was happy to hold shares in a company what seemed to be showing signs of a recovery.

Bland Final Results

However, when the company released the Final Results in March the CEO had this to say:

Whilst in 2016 we had record adjusted diluted EPS, it was a year of mixed fortune with the UK business profitability reducing materially but the overall Group performance showing resilience due to the strength in Germany and…

Unlock with Email

Unlock with Google

Already have an account?
Login here

Sully8786

31st Aug '17

It's been a while since I've written a piece on here - grateful for feedback and thoughts.

Regards,

DS

GrahamF

6th Sep '17

Hi DS

I too held some shares in this company based on good Stockrank but sold out before the upturn because for over a year it had gone pretty much nowhere and the mood music from management seemed to be promising simply more of the same.

You say "as luck would have it". I think that there is always some element of luck in our timing. The aficionados of technical analysis may have the ability to reduce this somewhat (however they only seem to speak up when it worked rather than also citing when it didn't on occasions).

When I look at the multi year performance of the share price the lesson that I see is that taking a longer term view on a high Stockrank share may be necessary rather than ditching after a year if it has gone nowhere.

Hi Graham,

I don't think that you were the only person selling, the thought crossed my mind more than once, too.

I remember recording a video that said pretty much that - I further remember feeling pretty stupid while many other stocks on my watchlist were flying higher while Computacenter (LON:CCC) was... err not.

As I improve my skills I may use TA a little when entering and exiting, but for now I'll be sticking to my clumsy entries and ill-timed exits / tops slices.

I think what kept me in was the fact that I like the management here, who seem down to earth, and in the main honest, not to mention the Chairman and his other half loading up on shares.

While it's nice to see the business doing well and returning cash, it could have so easily been a different story.

Regards,

Dave Sullivan.

Computacenter - An Improving Story and Super Stock

Buying into a Super Stock

Continuing to Trade in Line

Unlock the rest of this article with a 14 day trial

About the Author

Sully8786

3 comments

Unlock the metrics for all these stocks and more...

Unlock the metrics for all these stocks and more...