Quindell Portfolio: Trading Statement. Just Too Cheap!

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15th Jan '13 by johnrosier

2 comments 6011 reads

Quindell Portfolio (14p and 6.4% of JIC) has issued a trading statement for the year ended 31st December 2012. It is extremely positive with it saying that results will be above the upper end of market expectations with eps at 1.29p per share. Operating cash flow is ahead of expectations with year end cash at £47m compared to forecasts of £41.5m. Management say the new financial year has started strongly.

The shares have been weak during December and January. Hopefully this statement will stop the rot. On consensus forecasts the shares are now valued at less than 6x 2013 earnings. This seems far too cheap to me.

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About the Author

Johnrosier

Premium Member

I manage my subscription website www.JohnsInvestmentChronicle.com in which I show my portfolio and all transactions. I blog within an hour of trading, with an explanation, and send an alert email to all my subscribers. I do not pretend to have all the answers but I hope my portfolio, and the trades, provides food for thought as well as helping those who are new to managing their own portfolios.I think what I do is unique. There are plenty of tipsters out there who will remind you of the good ones and quietly forget the duffers; I do not have that luxury as the portfolio is there for all to see. I have to confront my mistakes and deal with them. A tipster also does not show how a tip fits into the context of an overall portfolio. My portfolio of up to 30 holdings has different holding sizes based on my conviction behind the stock and its risk. I set up www.JohnsInvestmentChronicle.com in January 2012. Prior to that :In September 1984, I left university with a degree in Zoology and started work in the City of London. Over the next twenty five years most of my time was spent managing UK equity portfolios with Fleming Investment Management and Henderson Global Investors, for company and local authority pension schemes as well as the reserve fund for a well known charity. During 2009 I left full time employment and decided to take time out to consider the next stage of my career. In the meantime I have been putting my years of experience to good use investing the family savings. I have thoroughly enjoyed the freedom of investing from home and despite some tricky periods during 2011 it has been a rewarding experience. more »

2 comments

Mark Simpson

15th Jan '13

Hi John,

Have you read this thread on TMF?

http://boards.fool.co.uk/quindell-paulypilot-12709345.aspx?sort=whole#12710269

They do seem cheap on EPS forecasts but surely 6.4% of portfolio seems a bit high weighting for a company with such high risk characteristics? (rapid growth by acquisition, poor cash conversion, excessive placings, management history, alleged poor staff behavior)

johnrosier

15th Jan '13

Hi Paul,

I last traded in this stock in July when I added to the existing holding, taking the total to just under 3% of the portfolio. I have been happy to run it as I quite like the underlying strategy, although with hindsight I should have let a third of the holding go in November. You make valid points that are clearly shared by others in the market hence the "mistrust" that is reflected in the share price. I would like to see management bed down last years acquisitions and start generating cash. I think at 14/15p the risk is to the upside but take your point about the size of the holding and will look to take some profits in the next few months.

I was never a shareholder in TIG but clearly there are lot of scarred memories. From what I can see the market, still enamoured by "tech" stocks put it on a ludicrous rating from which it could only collapse!

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Quindell Portfolio: Trading statement. Just too cheap!

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Johnrosier

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