The UK market ended the month pretty much where it started, after a period of volatility. It’s a similar story for my rules-based SIF portfolio, despite a couple of big movers over the last fortnight.
In this month-end review, I’ll review the portfolio’s performance in May and look at two stocks that I may need to sell. I’ll also include a snapshot of the whole portfolio as it stood at market close on 1 June.
SIF trades in May
May was a fairly quiet month for trading in the portfolio, but I did make two changes – one buy and one sell.
Buy: I added Asia-focused FTSE 100 bank Standard Chartered (LON:STAN) to the portfolio on 10 May. The bank’s performance has been better than expected recently. I think this could continue. You can read my buy report here.
Sell: Floorcovering distributor Headlam (LON:HEAD) triggered my 25% stop-loss rule in May. This meant I had little choice but to sell. However, Headlam hasn’t issued a profit warning and still appears to be trading reasonably well, based on May’s AGM update. Perhaps this is a classic contrarian buying opportunity. Time will tell.
I closed SIF’s Headlam position for a loss of 29%, including the benefit of two recent dividends. You can read my sale report here.
Portfolio stocks under review
I didn’t add any shares to SIF in August 2021. This means that nine months later, I don’t have any new shares to review at the end of their minimum holding period.
As a result, I have just two stocks to review this month. Both have appeared in previous month-end reviews, but in this case much has changed since April. I think they’re worth revisiting.
- Drax (LON:DRX) - rumours that UK electricity generators could be hit by a windfall tax later this year have triggered a nasty sell off for this wood burner. Does Drax still pass my screening tests to remain in SIF?
- Airtel Africa (LON:AAF) - this African mobile operator issued a strong set of full-year results in May and has launched its mobile banking service in Nigeria.
I’ll look at each of these stocks in more detail shortly, to assess whether they pass the tests necessary to stay in the portfolio. First, here’s a quick review of the portfolio’s performance in May.
