Mr. Market has been kind to my defensive portfolio lately, putting it into one of the top 3 performers for the month. This is remarkable for the fact that the companies I have selected are quite stodgy. It seems highly unlikely that I will be able to repeat this performance in the future; so I must guard against the temptation to puff myself up like a proud preening popinjay. Neil Woodford's recently-expressed opinion that careful selection of defensive stocks could be a "career-making opportunity" is beginning to look remarkably prophetic. All hail to the Woodford! Anyway, enough of my self-contratulating silliness. Some companies that I have taken an interest in for my defensive portfolio have recently released statements, so I thought that now would be time to give a quick rundown of the results, together with my opinions.

Greggs (LON:GRG) - 524p/£529m

Greggs is a bakers, owning a chain of 1500 shops through which to sell its bread, sausage rolls, cakes, etc. In an IMS today, Greggs reported:

  • Total sales growth in first 18 weeks up 4.8%
  • Like-for-like up 0.8%
  • Strong Easter performancenew shop expansion of track
  • Financials remain strong

The numbers: PER 13.8, yield 3.5%, returns on equities over the last decade about 20%, z-score 6.6, EV/EBITDA 6.6

My view: good quality company, happy to have it in the portfolio.

Morrisons (LON:MRW) - £7.9b/301p

Morrisons is a supermarket. No points for getting that one right. The price dipped 1.8% today. On 8 May, it reported:

  • Attracted record numbers of customers into its stores over the Easter holiday
  • Encouraging start to the new financial year with sales growth continuing ahead of market
  • Expects challenging economic conditions for customers
  • Prices of oil and increasing commodity prices had compounded pressure on consumers' disposable incomes
  • Total sales, exc. VAT and fuel were up 4.2% (7.3% including fuel).Like-for-like grew by 2.5% (5.8% including fuel)
  • Plans to buy back £1b over the next two years  

In his blog, Terry Smith commented on the issue of share buybacks:

Capital allocation decisions are amongst the most important decisions which management of companies make on behalf of shareholders. Yet share buybacks are not sufficiently understood by company investors and commentators, and maybe even by company management. One of the most important facts that…

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