September 2018 Portfolio Update

29th Sep '18 by Damian Cannon

17 comments 5242 reads

Well this proved to be an unexpectedly busy month; perhaps my most active of the year. This could just be a reaction to an indolent August but it seems to me that a number of interesting opportunities popped up in the month and I couldn't resist taking a few of them on-board. In addition a few of my holdings disappointed and, for various reasons, I felt inclined to cull them rather than hold on in hope of a recovery. In fact the word "hope" is something that came up in a tweet a few weeks ago - the gist being that if I find myself holding a share where I "hope" that something positive will happen then that's a sell signal!

Purchases

Portmeirion Group Bought 1180p - September 18

I've been running through my rules-based watch-list recently to see which new shares rank highly and how my existing portfolio of shares measure up. This is always a slightly tricky exercise since I like to give my investments time to perform, which means holding them through a few reporting cycles, but on any particular date they may not look so attractive. Anyway Portmeirion has popped up in this list a few times but I've always vacillated between this company and Churchill China - and ended up buying neither. This time I decided to be decisive, with ex-dividend dates approaching for both shares, and used both Stockopedia and SharePad to directly compare their financial performance and current forecasts. In the event I could find nothing to choose between them and only plumped for Portmeirion because its historical performance looks to be slightly more stable. With very recent results looking solid I'm quietly optimistic that Portmeirion will keep chugging along.

B.P. Marsh Bought 299p - September 18

I first came across this unusual investment trust earlier this year when Graham Neary covered it in the SCVR. I liked the sound of its alternate approach, which involves providing venture capital to financial services businesses, and long-term history from 1990 before entirely forgetting about the company. Fortunately my memory was jogged earlier this week when a trading update emerged with a lot of detail on how £17m has just been raised and how their portfolio is becoming more geographically diverse. In addition the founder (Brian Marsh) has reduced his holding to a more reasonable 44% and this suggests to me that…

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monions

2nd Oct '18

Damian,

Thanks for the update. I always like reading your succinct take on the month's events. Not many comments this month, but keep them coming, they are appreciated.

Damian Cannon

Thanks for the kind words monions. It's always good to know whether these monthly reports are appreciated. I especially look forward to comments, positive and negative, since there's no way that I'm right in all of my conclusions!

Damian

doug2500

I also like reading your updates (and website) and we share a few holdings.

You've never struck me as a particularly active investor but you've been busy this month. (not intended as criticism, just observation)

I'm trying to keep in mind Buffet's card theory where you only have so many trades in a lifetime. I won't stick to any firm number but it helps temper my enthusiasm about a new opportunity until I'm really sure. I also remember reading a book about only swinging for fat pitches (American obviously) but I can't remember what it was. Time will tell whether this is right for me, or if it will mean missed opportunities.

Recently I have topped up Somero Enterprises Inc (LON:SOM) and XP Power (LON:XPP) so we're obviously somewhat aligned.

mrgrowthvalue

3rd Oct '18

Great update Damian. Thanks and please 'em coming! I too own K3 Capital , Impax and Somero. I used to own Taptica but their aquisitive nature put me off so sold earlier this year. Other names on my radar include Liontrust, Warpaint and Premier Asset Management.

tony akram

Hi Damian

Good article thank you for sharing .

I also hold K3Capital and Softcat but I looked at ADEPT and at present has £30 million debt (market cap is £99m also NTAV is -£34 million ( has £36m and £14 m in intangibles and goodwill respectively ) just wondered your thoughts on this as this is what put me off initially but I am open to be persuaded otherwise.

No I'm pretty indolent when it comes to investing - what with having a full-time job and that being my nature. September was definitely an outlier for activity.

OTOH with my use of checklists to throw up companies which look like good investments I'm not really investing like Buffet. My belief is that the checklists are helping me to select quality companies which are performing well but it's impossible to know if they'll continue doing well. So I buy starter positions in promising candidates and then I'll scale up if they do well (like Impax) and get rid of them if they don't (i.e. Clipper Logistics).

I'll do my best. Taptica isn't exactly my favourite holding, being so opaque, but with the metrics being so good I chose to put the numbers ahead of my gut!

Liontrust and PAM look interesting although I have more than enough finance exposure. Warpaint is one that I'd heard of but dismissed as having too short a track record; however the numbers do seem pretty good so I might take a longer look.

matylda

Thanks Damian - Enjoy reading your update, much appreciate the time and effort it takes to share your knowledge.

No problem Tony. With AdEPT you're right that the debt level is definitely worth keeping an eye on. However the board are explicit about how much debt they're willing to take on to finance acquisitions and I don't believe that they're buying growth just because they can (i.e. they haven't issued any shares for years). I also see the excellent level of FCF as a great antidote to debt since they could reduce leverage very quickly if required - in contrast to companies taking on debt because they don't produce any cash.

That's about it. If you haven't watched some of these videos they are a good introduction: https://www.piworld.co.uk/category/company-videos-a-to-z/adept-adt/

Damian

Hi Damian

Thank you very much appreciated will take a look.

Tony

MichaelFBS

12th Oct '18

Hi Damian

I have only just come across your columns and the great, fascinating and interesting. Do you know if Stockopedia has a method for a subscriber to be notified when someone they follow posts a new column/blog? i.e. in the same that I get an email each morning about the publication of the SCVR?

Thanks.

Michael.

Hi Michael,

I'm glad that you're enjoying my articles. This month's will be an "interesting" one for sure!

Anyway if you click on someone else's name you are able to "follow" them and apparently you'll be notified when they post articles. I've never used this but I'm going to follow a few people today and see if the system works.

Cheers, Damian

HumourMe

Anyway if you click on someone else's name you are able to "follow" them and apparently you'll be notified when they post articles. I've never used this but I'm going to follow a few people today and see if the system works.

Doesn't work for me. Nice idea though!

Rusty2

No I don't think that works, I follow a few people but never get notified when they post. Maybe there is something in the settings?

jonno

Hi Damian

Just wanted to add my tuppence worth and thank you for sharing you views and portfolio with the Stockopedia community. My portfolio has several stocks in common with yours and I have recently added to a few during the market turmoil, which has abated today, but may of course continue on Monday. As Winston Churchill is alleged to have said "never let a good crisis go to waste.

No problem jonno. I've also been shifting some funds around and have topped up Burford Capital (LON:BUR), XP Power (LON:XPP), Somero Enterprises Inc (LON:SOM) and B.P. Marsh & Partners (LON:BPM). To my mind these are all looking good value at current prices.

Damian

13th Oct '18

Morning Damian

I looked at topping up on B.P. Marsh & Partners (LON:BPM),but it is my largest holding, together with Bioventix (LON:BVXP). Instead I bought back into AdEPT Technology (LON:ADT) and added to Strix (LON:KETL) and CLS Holdings (LON:CLI). The latter is a conservatively run pan European property company trading at an unwarranted discount in my view, to an estimated year end NAV of 310p. The founder still retains around 50% of the shares. It pays a dividend of around 3%. I bought after being alerted to the company in articles by Vegpatch.

All the best

September 2018 Portfolio Update

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Damian Cannon

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