SIF Folio March Review - Should I Keep Airtel Africa And Vertu Motors?

5th Apr '22 by Roland Head

7 comments 3260 reads

March was a more positive month in the markets, if not the real world. Both the FTSE All-Share index and my SIF portfolio ended the month in the black, although SIF is still down slightly on a year-to-date view.

Mr Market’s more positive stance seems to suggest that the impact of inflation, interest rates, energy costs and sanctions against Russia may be less than feared. I’m not sure I share this view, but my SIF screen continues to find new opportunities and I’m continuing to invest.

In this review I’ll look at the SIF’s performance in March. I’ll also look at shares bought during the month and two possible sales.

SIF trades in March

I was pleased to be able to add four new shares to SIF during the month. This has increased the number of stocks in the portfolio to 17, out of a target maximum of 20.

The new stocks were:

Macfarlane (LON:MACF) - this packaging group scores well for quality and momentum and didn’t look too expensive to me, despite a run up over the last 12 months.
Wilmington (LON:WIL) - after a long period of transition, this training and data provider may be poised to deliver.
South32 (LON:S32) - this mining group has been reporting near-record margins. I fear a cyclical high, but the stats (and StockRanks) appear to argue otherwise.
Photo-me International (LON:PHTM) - this photo booth operator has proved a canny survivor and is now diversifying. Owner-CEO Serge Crasnianski loaded up on cheap stock during the pandemic. I think he was probably right to do so.

You can read my buy reports on each of these stocks by clicking on the links above. All four have now been added to SIF and to my personal holdings.

Portfolio stocks under review

The SIF folio is a model portfolio that I’ve run using a rules-based strategy since April 2016. (Watch out for an annual report later this month.)

All stocks have a default holding period of nine months, after which they’re reviewed to see if they still pass my screening tests. This month there are two stocks that have been in the portfolio nine months or more:

Airtel Africa (LON:AAF) - This African mobile network operator has performed well for SIF, but does it pass my tests for a continued hold?

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M. Stephen J. Hare

5th Apr '22

Thank you for your rationale for holding Airtel Africa. I found it very helpful.

BANNA162

6th Apr '22

I agree on both stocks

ACounsell

Hi Roland, hope you sold Vertu Motors (LON:VTU) before the 9%+ fall in price today. Maybe your decision to sell moved the market!!

robin penfold

7th Apr '22

I suspect the semi- conductor issues will remain for at least the next 6 to 12 months and that selling Vertu motors at this time will prove premature. Asset backing v the SP is exceptional. Given the lack of new vehicles over the last 12 months suggests to me the 2nd hand market could remain strong for much longer than many think, given the shortage of used vehicles that will be available to enter this market. I also think Vertu could be a low-risk takeover target! Given Wednesday's selling a short-term trading opportunity is also on!

ar7268

Thanks for article, partially prompted by your article, I managed to sell Vertu Motors (LON:VTU) just before the slide in SP yesterday. For me, the threats of a 'cost of living' squeeze on consumer spending and inflationary pressures on the company's cost base outweighed the fact that the company looks undervalued. As a result, I reckon SP will face downward pressure this year. One big upside that this doesn't account for is a takeover bid, which has been happening in the sector recently (e.g. Marshall Motor Holdings (LON:MMH)).

Helvellyn

Hi Roland,

while you say that £AAF qualifies for your buying screen you did not mention adding to your holding, is this not something that you do with this PF ? and if not could you give your reasoning ?

Great stuff BTW.

Richard

Roland Head

9th Apr '22

Hi Richard,

Thanks for your comment. As a matter of policy, I don't add to (or reduce) existing holdings in SIF. All holdings are sized equally when purchased, and are sold as a single lot when the time comes.

There are a few reasons why I don't add or reduce. Mainly, these boil down to unwanted complexity and extra trading costs.

Although I probably could develop a rules-based approach to adding/reducing existing holdings, I'm not sure this would be likely to add much value given the portfolio's default holding period is only nine months.

Similarly, costs are already quite high in SIF, due fairly regular trading. I would not like to make changes that would add further to these costs.

I hope this makes sense and helps answer your question.

Regards,

Roland

SIF Folio March review - Should I keep Airtel Africa and Vertu Motors?

SIF trades in March

Portfolio stocks under review

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Roland Head

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