Continuing on from my last post here. Technically since last time I have one to add to the 'Closed positions' list as I've sold out of MGNS, so I'll start with that.
Closed Positions
Morgan Sindall (LON:MGNS)
Whilst I still think Morgan Sindall is not near fair value, this has been an odd case of a) the investment case deteriorating yet b) the share price increasing leading me to sell out in search of better ideas. I originally bought in to Morgan Sindall on a thesis that a) the company has a good, decade plus record of well managed, value-creating growth b) it's an owner-operator share c) It was trading on a low P/E of around 7 whilst earnings and margins were far towards cyclical lows d) it paid a ~7% dividend. Since then, margins have deteriorated even further to a record low (at least as far back as I can see, to 1999) and the dividend has been cut for the first time (at least not since 1999). Whilst I still think this is a function of the cycle which will eventually turn the other way, the market has run up recently such that I was sitting on a ~15% share price appreciation despite the fact that broker forecasts for future earnings have been trending downwards:
Whilst I'd still bet on a medium term regression-to-the-mean here and the long term success of MGNS, it no longer appears as dirt cheap given recent fundamental & share price performance, sitting on a forward P/E of 11. I decided to sell on the basis of opportunity cost given the ideas I have elsewhere.
All Leisure has had a volatile 6 months, rising from 23.5p at the beginning of the year to a high of 52.5p, before falling back to the current price of 31p. I already did a big update fairly recently on ALLG here so I'll just add my thoughts on recent developments. I still think ALLG is one of the cheapest stocks I own, although it does just love stumbling between one-off disasters. This RNSbasically sums up the recent troubles - with ship technical problems causing…
