March 2019 Portfolio Update

Sunday, Mar 31 2019 by
30

I was a little distracted from the markets this month, as real-life took charge, but the portfolio did just fine without my active oversight. On the whole most of my trading actions were driven by price alerts where I'd previously identified a level at which I would be happy to either buy or sell. To some degree this took the emotion out of these decisions, since I'd already done the groundwork, but it's always a slight worry to trade against the market.

Still I did manage to write up the StockSlam from last month, where a number of interesting companies were highlighted, along with some notes on the two accounting/investing courses that I attended (Introduction to Accounting and Introduction to Equity Analysis). In the middle of the month I also managed to make my first ShareSoc Seminar of the year and found all of the presenting companies to be worthy of consideration. All in all another busy month but with more thinking than action!

Purchases

XP Power Bought at 2044p - March 19

In my view the shares of XP Power are being sold at a bargain price right now and this analyst report from Edison is in agreement. Right now the forward P/E is under 12 and it's clear, looking back over the past decade, that XPP goes through peak-to-trough cycles in valuation - with it being in the trough right now. So if trading continues as predicted, with the industrial, healthcare and technology segments continuing to grow well while the semiconductor manufacturers take their foot off the gas, then the company will continue to grow profits at a single-digit rate. In addition XPP is rated much more cheaply than similar companies, while offering a better yield, and I'm inclined to believe that the market has over-shot with its negativity here. Hence I've topped up my position.

Pagegroup Bought at 452p - March 19

As mentioned below I think that the FY results for 2018 are really impressive and that Pagegroup have an excellent runway for continued growth (assuming that that we don't fall into a global recession). Now fear of the latter is probably holding back the share price but even so the current forward P/E of 12-13 is discounting an awful lot of bad news (and the ratio hasn't been this low since the financial crisis). My…

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XP Power Limited is a United Kingdom-based developer and manufacturer of critical power control components for the electronics industry. The Company provides power solutions, including alternating current (AC)-direct current (DC) power supplies and DC-DC converters. The Company's segment include Europe, North America and Asia geographical. It designs-in power control solutions into the end products of blue chip original equipment manufacturers, with a focus on the industrial, healthcare and technology sectors. Its product categories include high efficiency/convection-cooled, chassis mount/open frame, configurable, external, encapsulated and printed circuit board (PCB) mount, DIN rail, baseplate-cooled, through hole mount, surface mount, light-emitting diode (LED) drivers and distributed power/hotswap. more »

LSE Price
2070p
Change
-0.5%
Mkt Cap (£m)
398.2
P/E (fwd)
11.7
Yield (fwd)
4.3

PageGroup plc, formerly Michael Page International plc, is engaged in the recruitment consultancy and other ancillary services. The Company's segments include EMEA, United Kingdom, Asia Pacific and Americas. The Company is organized into approximately three brands operating at various levels of the market: Michael Page, Page Personnel and Page Executive. Page Executive offers executive search services. Page Executive offers a range of search, selection and management solutions for organizations. Michael Page recruits on a permanent, temporary, contract and interim basis. Page Personnel offers specialist recruitment services to organizations requiring permanent employees or temporary or contract staff at technical and administrative support, professional clerical and junior management levels. The Company's subsidiaries include Michael Page International Argentina SA, Page Personnel Argentina SA, Michael Page International (Australia) Pty Limited and Michael Page International GmbH. more »

LSE Price
449.8p
Change
-0.2%
Mkt Cap (£m)
1,478
P/E (fwd)
11.8
Yield (fwd)
5.2

Bodycote plc is a provider of thermal processing services. The Company has six operating segments, split between Aerospace, Defense and Energy (ADE) and Automotive and General Industrial (AGI) business areas: ADE-Western Europe; ADE-North America; ADE-Emerging markets; AGI-Western Europe; AGI-North America, and AGI-Emerging markets. It offers technologies such as Classical Heat Treatment, including nitriding, carburizing, annealing, tempering, and Specialist Technologies, including hot isostatic pressing services, hot isostatic pressing product fabrication, specialty stainless steel processes, surface technology and Corr-l-Dur. The Company has over 26 facilities in geographies covering Eastern Europe, China, Mexico, Singapore and Dubai. It provides support in the manufacturing process for market sectors, including aerospace and defense, automotive, power generation, oil & gas, construction, medical and transportation. more »

LSE Price
761.5p
Change
1.9%
Mkt Cap (£m)
1,458
P/E (fwd)
13.5
Yield (fwd)
3.1



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


2 Posts on this Thread show/hide all

doug2500 7th Apr 1 of 2
1

Great write up Damian, as ever.

I tend to agree with most of your thoughts, I also bought a small amount of XPP (and may have bought more but I'm already in quite deep) and thought about selling BVXP and TUNE, but didn't. I'm just not great at selling on valuation alone, and to be honest I'm not even sure if I should. It would've been nice to sell BVXP at £40 and buy it back for £36, but that's with the benefit of hindsight.

Doug

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Damian Cannon 8th Apr 2 of 2
1

In reply to post #466811

Thanks for your feedback Doug. On the valuation front I must admit I've changed my thinking here after failing to act last August/September when (in retrospect) many valuations were stretched. While I'd have probably kept most of my holdings some of them had definitely got ahead of themselves.

So nowadays I'm more conscious of looking for a lowish valuation when considering adding a share or topping up (hence my purchases of Games Workshop (LON:GAW) and XP Power (LON:XPP) ) rather than jumping in too quickly. With luck normal volatility will being some of the companies on my watch-list into the buying zone and if not that's fine.

On the selling front I'm not really focused on valuation but if this becomes way out of line with the historic norm (such as with Bioventix (LON:BVXP) and maybe Focusrite (LON:TUNE) ) then I'll focus on the 1-year and 2-year growth forecasts to see if the valuation continues to stack up.

Damian

Blog: Ambling Randomly
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