February 2019 Portfolio Update

Thursday, Feb 28 2019 by

Shortest month of the year and perhaps one of the busiest in a while - and that's without doing any trading. Instead I've leveraged SharePad to produce some detailed analysis of both Fever-Tree and Medica Group. It's been refreshing to get back to this kind of work and having the right tools has really helped here. I also managed to find time to host the first StockSlam of 2019 in Central London. While I haven't managed to write up the presentations yet I did get round to publishing this short note on Cake Box. Finally, as if that wasn't enough, I attended an equity analysis course in order to pick up some professional tips. With luck I'll be able to post my notes on this at the weekend.



Things I thought about buying (but didn't)

Fever-Tree: Before I began my detailed analysis of Fever-Tree I was pretty sure that I was going to buy some shares. They've done well for me in the past and might do so again. However once I'd established that growth rates in just about all regions had rolled over and that so much of the share price is supported by hopes around breaking the American market then I just couldn't pull the trigger. I still think that this is an excellent business with a sharp management team but these very same directors have sold a lot of stock recently. So if they're nervous with the price at current levels (and clearly don't see a bid for the whole company coming soon) then I think that it's sensible to follow their example.

Medica Group: This stock popped up on my radar last year, at a higher price, and the qualities which attracted me then still remain - namely an improving ROCE level (as profits have grown faster than capex) and a high level of cash generation. On the other hand I think that growth is structurally limited by the need to find and hire qualified radiologists while having broadly a single customer, the NHS, is a clear business risk. So I see Medica remaining a great company in its niche but I can't ever see it growing to become a £1bn operation.

Cake Box: As mentioned above I took a lightning look at Cake Box and there's a lot to like about this franchise…

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Fevertree Drinks plc is a United Kingdom-based holding and investment company. The Company is a developer and supplier of premium mixer drinks. The Company's premium mixers consist of a range of all natural carbonated mixers, including Tonics, Ginger Ale, Ginger Beer, Bitter Lemon and Lemonades. The Company sells a range of products under the Fever-Tree brand, which include Indian Tonic Water, Naturally Light Tonic Water, Elderflower Tonic Water, Mediterranean Tonic Water, Ginger Ale, Ginger Beer, Naturally Light Ginger Beer, Bitter Lemon, Sicilian Lemonade, Lemonade, Spring Soda Water and Premium Cola. The Company caters to hotels, restaurants, bars and cafes, as well as supermarkets. The Company sells its products to a range of markets, such as the United Kingdom, Europe and North America. more »

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Medica Group PLC is a United Kingdom-based company, which is engaged in the provision of teleradiology services. The Company offers an information technology (IT) platform that provides linkage between a hospital's radiology information system (RIS) and consultant radiologists who contract with the Company. The Company operates through Teleradiology reporting segment. The Company offers three services to hospital radiology departments: NightHawk, Routine cross-sectional (Routine CS) and Routine plain film (Routine PF). The Company's NightHawk service is an out of hours service to hospital emergency departments, offering always on support around the clock. NightHawk provides reporting on Computerized Tomography (CT) scans. Its Routine CS and Routine PF are both designed to assist hospitals in managing their daytime capacity and turnaround times. It provides Teleradiology services to NHS hospitals, private hospital groups and diagnostic imaging businesses. more »

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  Is LON:FEVR fundamentally strong or weak? Find out More »

3 Posts on this Thread show/hide all

Howard Adams 1st Mar 1 of 3

Hi Damian

An excellent write up, many thanks.


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wilkonz 1st Mar 2 of 3

Some useful reflections, Damian. Many thanks. I share your views on Fevertree Drinks (LON:FEVR) and Plus500 (LON:PLUS).

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Damian Cannon 1st Mar 3 of 3

In reply to post #453308

Thanks William. I've no idea how either of them will work out in the long run but they're too risky for me at the moment!

Blog: Ambling Randomly
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