PORTFOLIO REVIEW
My top 5 holding account for 40% of the portfolio. This is by accident rather than by design or conviction. Some shares just did well. My top holding (3i (LON:III)) is at 12% of the portfolio.
Over a 5-year period, the ASX (All-Share Index) has returned on average 1.2%pa. My portfolio averaged around 3.8%pa. So, that's a measly 2.6%pa outperformance, and I'm not happy with it at all. The performance is on a compound basis and excludes dividends, and includes all dealing, duties and other costs. The dividend yield was around 3.6%, about the same as the market
The following data is based as at 29 March 2024, so the figures will be slightly out-of-date.
The biggest gain in my portfolio was large-cap 3i (LON:III), up 69% this year. A large percentage of their portfolio (around 70% IIRC) is in a company called Action, which is a European retailer. It has around 2500 stores, and analysts estimate there's scope to double in size. L4L sales had increased somewhere in the region of 8%. Action's performance has really propelled III. III is the biggest position in my portfolio, although not really by design. This made it my biggest gainer in both relative and absolute terms.
I've had many shares deliver in the 30-40% range, So it's difficult to pick my next two biggest portfolio contributors. Computacenter (LON:CCC), Cranswick (LON:CWK) and @RMWH all fell in that range, and they were part of my tiny compounder portfolio that I suggested last year https://www.stockopedia.com/co....
Diploma (LON:DPLM), interestingly, returned 36%, despite being considered quite expensive.
Of the big gainers, the following companies pass my FCFY (FCF yield) hurdle rate: Boeing Co (NYQ:BA), Computacenter (LON:CCC), Howden Joinery (LON:HWDN), Morgan Sindall (LON:MGNS), Renew Holdings (LON:RNWH). So I would still expect them to deliver a reasonable return even though they have already posted sizeable gains. MGNS has a stock rank of 99, a PE of 9.6, a P/FCF of 6.1, and EV/EBITDA of 4.6. Its FCFY is a 16.4%. Forward growth looks a little weak It has net cash. The valuation metrics are solid. Assuming no disaster, the share price should be well supported by valuations.
My FCY hurdle rate is 1+rate of inflation. This is an idea I copied from Terry Smith. It…
