November 2018 Portfolio Update

Sunday, Dec 02 2018 by

It's hard to believe that 2018 is almost over. Following a great 2017 this has turned into a very mixed year after such early promise. Having been burnt in October I believe that buyers remain cautious (myself included). Still this was all over-shadowed by the excellent two days that I spent at Mello London in Chiswick. Probably the best private investor event organised anywhere in the country I had a great time meeting interesting companies, hanging out with like-minded investors and hosting the biggest Stockopedia StockSlam so far.

One of the most apposite presentations involved a panel discussion around Patisserie Valerie and what investors could learn from this calamitous collapse. With a great deal of insight it became clear that internally the company was not being run effectively with a very dominant chairman, Luke Johnson, being surrounded by cronies and subject to minimal oversight. This might be the simple reason why one or more directors were able to hide poor trading and huge debts from anyone else. Equally usefully Steve Clapham, from Behind the Balance Sheet, showed how forensic analysis of the accounts indicated that the numbers were too good to be true. On one hand Patisserie Valerie appeared to be as profitable as Starbucks, despite having much larger fixed costs, while on the other employees/locations weren't as efficient as comparable companies in the dining sector.

Anyway the big takeaway for me is that I need to attend Steve's course on investigative accounting and possibly also his introductory courses! I've been in touch with Steve about this and will shortly be posting about an offer that he has made around putting on a bespoke course for private investors. If there is enough interest from us then he should be able to make this happen early next year. Watch this space.


Keywords Studios Bought 1509p - November 18

It's interesting to me that following the big October sell-off a good number of shares have bounced back vigorously while others, such as Keywords Studios, have continued to languish. Given solid HY results in September, a FY forecast which has risen 20% in the past year and an undemanding P/E of ~30 I don't see a good reason for share price weakness here. From a longer term perspective I also believe that KWS has much opportunity for growth both organically and through acquisition (in a generally…

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Keywords Studios Plc supplies localization and localization testing services. The Company's segments include Localization Services, which relate to translation and cultural adaptation of in-game text and audio scripts across multiple game platforms and genres; Localization Testing, which involves in testing the linguistic correctness and cultural acceptability of computer games; Audio/Voiceover Services, which relate to the audio production process for computer games and includes script translation, actor selection and talent management through pre-production, recording and post-production; Functional Testing, which relates to quality assurance services provided to game producers to ensure games functions as required; Art Creation Services, which relate to the production of graphical art assets for inclusion in the video game, and Customer Support, which relates to the live operations support services, such as community management, player support and associated services. more »

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Games Workshop Group PLC designs, manufactures and sells fantasy miniatures and related products. The Company's segments include Sales channels, Product and supply, Central costs, Service centre costs and Royalties. The Sales channels segment includes Trade, which sells to independent retailers and includes magazine newsstand business and distributor sales from its publishing business (Black Library); Retail, which includes sales through retail stores, its visitor center and global exhibitions, and Mail order, which includes sales through its Web stores and digital sales. The Product and supply segment designs and manufactures products and incorporates production facility in the United Kingdom. The Central costs segment includes its overheads, head office site costs and costs of running Games Workshop Academy. The Service centre costs segment provides support services and undertakes strategic projects. The Royalties segment includes royalty income earned from third-party licensees. more »

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Watkin Jones plc is a United Kingdom-based construction and development company. The principal activities of the Company and its subsidiaries are those of property development and the management of properties for multiple residential occupation. The Company's segments include student accommodation development, residential development, student accommodation management and corporate. The Company's student accommodation development segment is engaged in building student accommodation developments. The Company's residential development segment is engaged in the development of traditional residential property. The Company's student accommodation management segment is engaged in managing student accommodation property. It builds properties ranging from executive and family homes to contemporary apartments. The Company operates across the entire development lifecycle from site procurement, planning and construction to scheme management. more »

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

3 Posts on this Thread show/hide all

herbie47 2nd Dec '18 1 of 3

Damien, thanks for the monthly review, always interesting to read, I was considering buying Keywords Studios (LON:KWS) as well but think I will see what happens on Brexit vote first. I also thought they would not be affected by Brexit. I’m also considering Fevertree Drinks (LON:FEVR) which has also fallen back considerably even though the forecasts are unaltered. I did top up H & T (LON:HAT) but they have fallen a bit more.

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tomps3 2nd Dec '18 2 of 3

Damian, many thanks as always.

And we've covered quite a few of these companies!

Hot of the press, AdEPT Technology (LON:ADT) Mello London presentation here:

IG Design (LON:IGR) results presentation from last week: 28.11.18

Zoo Digital (LON:ZOO) results presentation, 8.11.18

We have the latest Keywords Studios (LON:KWS) results, but this was 18.9.18, which seems ages ago now!

Palace Capital (LON:PCA) were filmed last week at Mello London, so will follow shortly.

Historically we have recorded Watkin Jones (LON:WJG) (2016) and £ASCO (2017)

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Damian Cannon 2nd Dec '18 3 of 3

In reply to post #423718

Thanks Tamzin. I saw AdEPT Technology (LON:ADT) live and previously watched the IG Design (LON:IGR) and Zoo Digital (LON:ZOO) presentations with great interest. Given how impossible it is for me to make these investor briefings you're providing an invaluable service with these videos.

Sadly I didn't get to see Palace Capital (LON:PCA) at Mello so I'm looking forward to your recording with some anticipation!

Blog: Ambling Randomly
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