SIF December review: Ahead of the market, but facing big losses (COST, SXS, MOTR)

Thursday, Jan 03 2019 by
26
SIF December review Ahead of the market but facing big losses COST SXS MOTR

Happy New Year! I hope you all enjoyed a good break over the festive period. Let’s hope that 2019 will be kinder to our portfolios than 2018.

December capped a bad year for the SIF fund, but happily my rules-based portfolio still managed to finish ahead of the FTSE All-Share index by a modest 1.3%:

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My view remains that a number of decent stocks have been oversold as investors have taken fright at a multitude of potential risks. These include the prospect of a chaotic no-deal Brexit, US-China trade war, and rising interest rates.

It remains to be seen whether these fears are fully justified. But the forward-looking nature of markets could mean that stock market sentiment improves while newspaper headlines remain full of doom.

Getting back to business

I’m not going to make any more predictions, but I will continue with my strategy of buying stocks which qualify for my Stock in Focus (SIF) Screen, and selling those which don’t.

As a reminder for new readers, my SIF fund is a virtual fund I run through Stockopedia’s Fantasy Funds system. In order to have skin in the game and make this more interesting, I also invest a portion of my own personal portfolio in all of the stocks I add to the SIF fund.

At the end of each month, I review stocks that have been in the folio for at least nine months to see if they still pass my screening rules. If they don’t, they’re sold.

This slightly belated review is for December 2018 and will include three stocks:

  • Used car supermarket Motorpoint (LON:MOTR)

  • Engineering and construction group Costain (LON:COST)

  • FTSE 250 instrumentation and control specialist Spectris (LON:SXS)

Motorpoint is the fund’s oldest holding, having been purchased in December 2017. Costain and Spectris were purchased in March 2018 and have delivered some of my biggest losses to date:

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(As at 2 January 2019)

Let’s take a closer look.

Motorpoint (LON:MOTR)

Original coverage 06/12/2017

My respect for this car supermarket business has increased during the time that I’ve owned the shares. It appears to be able to generate a very high return on capital employed (ROCE) without excessive use of debt.

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Disclaimer:  

As per our Terms of Use, Stockopedia is a financial news & data site, discussion forum and content aggregator. Our site should be used for educational & informational purposes only. We do not provide investment advice, recommendations or views as to whether an investment or strategy is suited to the investment needs of a specific individual. You should make your own decisions and seek independent professional advice before doing so. Remember: Shares can go down as well as up. Past performance is not a guide to future performance & investors may not get back the amount invested. ?>


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Motorpoint Group plc is an independent vehicle retailer in the United Kingdom. The Company's principal business is the sale of vehicles, of which are approximately two years old and which have covered over 15,000 miles. The Company sells vehicles from brands representing vehicle sales in the United Kingdom, with models from Ford, Vauxhall, Volkswagen, Nissan, Hyundai, Audi and BMW. The Company operates from over 10 retail sites across the United Kingdom. The Company has a national contact-center dealing with online enquiries. In addition to sales of vehicles, the Company operates Auction4Cars.com, a business to business online auction platform for vehicles. The Company also offers ancillary products to customers, including customer finance packages, vehicle guarantees, insurance products and vehicle protection treatments. more »

LSE Price
230p
Change
0.4%
Mkt Cap (£m)
217.6
P/E (fwd)
11.7
Yield (fwd)
3.4

Costain Group PLC is a technology-based engineering solutions provider. The Company offers consulting, project delivery, and operations and maintenance services. The Company operates through two segments: Natural Resources and Infrastructure plus Alcaidesa in Spain. The Infrastructure segment operates in the highways, rail and nuclear markets. The Natural Resources segment includes the Company's activities in water, power, and oil & gas markets. The Company offers a range of services, including advisory and concept development, specialist design, program management, project delivery, technology integration, and asset optimization and support. The Company offers services across whole life cycle of its customers assets in energy, water and transportation business areas focused on the United Kingdom market. more »

LSE Price
300p
Change
 
Mkt Cap (£m)
323.7
P/E (fwd)
7.3
Yield (fwd)
5.6

Spectris plc is a supplier of productivity-enhancing instruments and controls. It operates through four segments: Materials Analysis, Test and Measurement, In-Line Instrumentation and Industrial Controls. Materials Analysis segment provides products and services that determine structure, composition, quantity and quality of particles and materials, during research and product development processes. The Test and Measurement segment supplies test, measurement and analysis equipment, software and services for product design optimization, manufacturing control, microseismic monitoring and environmental noise monitoring. The In-line Instrumentation segment provides process analytical measurement, asset monitoring and online controls, as well as associated consumables and services for primary processing and the converting industries. Industrial Controls segment provides products and solutions that measure, monitor, control and connect during the production process. more »

LSE Price
2797p
Change
0.5%
Mkt Cap (£m)
3,227
P/E (fwd)
15.4
Yield (fwd)
2.4



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


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About Roland Head

Roland Head

I'm a private investor and writer on stock markets, with a particular fondness for free cash flow, dividends and value. I also have an interest in (profitable) commodity stocks.  I hold the CFA UK Investment Management Certificate (IMC). One of my investment interests is developing rules-based strategies such as my Stock in Focus portfolio. This reflects a significant part of my personal portfolio and is the subject of my weekly column here at Stockopedia. In earlier life, I worked as an engineer in telecoms and IT. The rules-based approach required for this kind of work undoubtedly influenced my investing style. I also learned a lot from seeing the tech bubble deflate in 2000-1, when I was working for a large and now defunct Canadian firm.  more »

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