SIF Folio: Is momentum failing at Bloomsbury Publishing?

Tuesday, Aug 06 2019 by
17
SIF Folio Is momentum failing at Bloomsbury Publishing

From time to time, I sell a stock because it no longer qualifies for my screen and then -- a few months later -- it’s back in my screen results. This is one of those times. The company is Bloomsbury Publishing, which exited the SIF folio at the start of May.

Bloomsbury is best known as the publisher of the Harry Potter books, but it also publishes a wide range of other fiction and non-fiction.

I don’t have any rule against re-buying stocks and I believe that Bloomsbury could fit within the SIF fund. So today I’ll be taking a fresh look at this stock’s value, quality and momentum credentials.

Bloomsbury Publishing (LON:BMY)

When I sold Bloomsbury in May, the stock failed my screen on two counts:

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May 2019

Fast forward to today and the stock delivers a clean sweep:

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For investors used to following a more subjective process, my decision to buy and sell stocks on this basis may seem rather arbitrary. I feel that too sometimes, but that’s the point here.

My Stock in Focus (SIF) fantasy fund is run as a rules-based portfolio. I’m only allowed to exert a small amount of subjective judgment on stock picks. My rules are intended to select stocks offering a balanced mix of value, quality and momentum. You can see them here, if you create a copy of my screen for your own use.

I’ve been doing this since April 2016 and so far I’ve stayed ahead of the market:

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The gap has narrowed recently, but at the time of writing SIF was still ahead of the FTSE All-Share by 18% on a three-year view. I invest a portion of my own real-money portfolio in all of the SIF picks, so I have a strong incentive to make the system work.

Getting back to Bloomsbury, the Harry Potter publisher’s share price has been almost eerily flat in recent months, despite recent results that were ahead of expectations.

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If I had my discretionary investing hat on, I would say this was quite possibly a sign that the shares are fully priced. But I don’t generally allow myself that kind of guesswork, unless…

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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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Bloomsbury Publishing Plc is a global publisher. The Company is involved in the publication of books and other related services. The Company operates through four publishing divisions: Adult, Children's & Educational, Academic & Professional, and Information. These divisions derive their revenue from book publishing, sale of publishing and distribution rights, management and other publishing services. It specializes in the humanities and social sciences, and publishes over 1,000 books and digital services each year. The Company's digital products include Berg Fashion Library, Bloomsbury Collections, Bloomsbury Fashion Central, Churchill Archive and Drama Online. The Company's subsidiaries include A & C Black Limited, Bloomsbury Publishing Inc, Bloomsbury Information Limited, Bloomsbury Professional Limited, Bloomsbury Australia PTY Limited, The Continuum International Publishing Group Limited and Osprey Publishing Limited, among others. more »

LSE Price
232p
Change
0.4%
Mkt Cap (£m)
174
P/E (fwd)
13.8
Yield (fwd)
3.7



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


2 Comments on this Article show/hide all

Glen Keedy 6th Aug 1 of 2
6

Roland said "P/B: The price/book ratio of 1.2 looks potentially cheap, but I’m not convinced that it’s very meaningful."

If they sold more books they could get that P/B ratio right down.

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Munday 9th Aug 2 of 2

I think I would wait for a breakout 240 before buying.

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About Roland Head

Roland Head

I'm a private investor, analyst and writer on stock markets, with a particular fondness for free cash flow, dividends and value. My main interests are UK and US stocks. I also have an interest in (profitable) commodity stocks.  I have passed the CFA Level 1 exam and 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 and quantitative 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 very large and now defunct Canadian telecoms firm.  more »

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