Half-year portfolio review featuring Supergroup, IMI, BAT & Tesco

Thought I’d do a half-year review. In October? Yes – I’ve decided to switch over to tax years, as it makes my accounting easier.

Biggest coup this year has been SuperGroup (LON:SGP) – up 56% since I bought. I’m really happy about that one. I still hold. The market has been in ful swing lately, so most of my shares have been going swimmingly. I’m in severe danger of confusing genius with a bull market.Value has done well, growth has done well, it’s all good.

It’s worthwhile mentioning that Dechra Pharmaceuticals (LON:DPH) – which is a nice steady compounder – is up quite nicely despite having long stretches where it goes nowhere. Just goes to show that it pays to have patience sometimes. Also, some of my high-growth shares have done very well (CRW Craneware up 42% since I bought), despite being very off-putting to value investors who must consider the PEs way too high.

JD has had a bumpy ride when I last suggested a top-up at 678p. It’s now 768p, up 13%. Not bad, although it’s still volatile. Buying on an EV/EBITDA of around 3 gives you a lot of protection, especially given the good track record of the company.

Man (LON:EMG) up sharply today on bid rumours … which brings me to:

IMI (LON:IMI) – a Footsie industrial engineering company. I bought last year at 1132p, and it now stands at 924p. Not a great idea on my part. At the time I bought it, there was heat on the company with bid rumours. If you look at sites like ADVFN, the boards are littered with bid rumours that never amounted to anything. Repeated note to self: never never NEVER buy a share that has bid rumours floating around. I half think that investment bankers peddle these rumours around in order to excite deals.

Tesco (LON:TSCO) – down from my purchase price of 327p in january to 311p today. I’m very disappointed in my selection here, as I thought it would recover a lot sooner. It’s now on an EV/EBITDA of 5.63 – which must be about the cheapest valuation I’ve seen in the current market for a strong defensive company. I’ll continue to hold. I’ve set a target of 260p to top up at. Maybe it will never reach it. Fine, so be it.

I’m increasingly thinking that large-cap companies do not generally make good investments. Things can be very slow to move. Look at the widely-followed AV (Aviva). It’s been futzing around for years. I’m thinking that, unless large-cap offers good value generally, investors will probably do better in mid/small caps. I’m suspecting that mid-caps might be the best choice: small enough so that not everyone is following them like hawks, and big enough that you can get tight spreads and some usable volatility.

Albemarle & Bond Holdings (LON:ABM)  – the pawnbrokers – was a fairly recent purchase and I’m down 10% on that so far. They’re going through a period of negative sentiment with their gold buying. ABM has a yield of 5.4%, a PER of 8.7, and a ROE of 19%. EPS has grown 4X over the last decade, so it’s had impressive growth. I think that the thing the market is missing is that ABM has a lot of new shops, and it takes time for the shops to establish themselves and reach full profitability. So it’s a question of being patient until then.

My decision to sell British American Tobacco (LON:BATS) turned out to be a very good decision. I was worried about how dividend-paying quality stocks were a crowded trade, and how BATS was at historically high valuations. It was a difficult decision for me to make, but it is one that has proven to be correct so far.

Other things that worked well was investing in companies with solid finances where directors had made substantial purchases and you buy in for less than 10X free cashflow. You could probably beat the market year-after-year just by following that dirt-simple strategy. I haven’t backtested, though.

Favourite stock at the moment: Regenersis (LON:RGS) – cheap valuation, and a well-articulated growth story by the board.

Speculative buy: Lamprell (LON:LAM). A string of disasters, but there’s been some board changes. Covenant problems are likely to be overstated, as the company has some very desirable assets, debt that isn’t too stretched. I wrote about it recently.

Happy investing to you all.