SIF portfolio: Sirius Real Estate returns & 3 new foreign stocks

Tuesday, May 08 2018 by
12
SIF portfolio Sirius Real Estate returns amp 3 new foreign stocks

When following a rules-based investing strategy like the one I use for the SIF portfolio, the line between trading and investing can get blurred. In his recent interview with Ben Hobson (recommended reading), US trader Mark Minervini suggested that “an investor is someone who holds for long term capital gains; one year or more rather than weeks or months”.

By that definition, I guess the SIF portfolio’s minimum holding period of nine months means that it’s leaning towards being trading, rather than investment. Certainly this week’s choice of stock might suggest to many investors that I’m a trader!

Sirius is back!

Back in November, I sold the portfolio’s virtual holding in German commercial property firm Sirius Real Estate for a total return of 29%.

This company operates business parks in Germany, providing flexible workspace. It was a successful holding for the SIF portfolio. But forecasts for lower earnings in 2018 meant that it no longer satisfied my screening requirement for 1-year forecast earnings growth of at least 5%, so the shares were sold.

The passing of time means that 1-year forecast earnings are now weighted towards 2018/19, a year in which the company’s earnings are expected to rise by 25%, according to consensus forecasts:

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A strong set of H1 2017/18 results means that this stock now passes all of my screening rules.

5af165f16b64fS1a.png

Indeed, Sirius Real Estate is currently the only stock in my screening results that I’m able to add to the portfolio, once existing holdings and sector duplicates are excluded.

Is it still worth buying?

Sirius still scores highly across the board, with a StockRank of 89 and Super Stock status.

5af16603b04ffS2.png

You can read my original write-up of Sirius Real Estate from March 2017 here. I’m not going to recap all of this, as not much has changed. The only thing that is different is the maturity of the group’s portfolio.

Over the last year, the firm has sold some of its more mature assets and bought a number of new sites, often with low occupancy. Management expect to create value for shareholders by updating and remarketing these, as they have done successfully in the past.

This process is expected to have a short-term hit on earnings, but…

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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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Sirius Real Estate Limited (Sirius) is a real estate holding company. The Company is engaged in the investment in and operation and development of commercial property to provide workspace in Germany. The Company has a portfolio of approximately 40 business parks across Germany. The Company offers a range of products, including Smartspace and FlexiLager. The Company invests in mixed-use commercial real estate assets in Germany, which can be sub-divided into workspaces, offering a range of managed properties. Its SmartSpace has approximately 79,320 square meters of the total lettable space. Its SmartSpace includes office, storage and workbox. The Company's properties include Sirius Business Park Wuppertal, Sirius Business Park Solingen, Sirius Business Park Rostock, Sirius Business Park Mainz, Sirius Business Park Pfungstadt, Sirius Business Park Offenbach Carl Legien Strasse, Sirius Business Park Offenbach, Sirius Business Park Nuremberg and Sirius Business Park Markgroningen. more »

LSE Price
66p
Change
-1.5%
Mkt Cap (£m)
654.3
P/E (fwd)
15.1
Yield (fwd)
4.0

Tianneng Power International Limited is a Hong Kong-based investment holding company principally engaged in the manufacture and sales of lead-acid batteries and battery-related accessories. The main products of the Company include lead-acid motive battery products, such as electrical bicycle batteries, electrical tricycle batteries and pure electric car batteries. Its products also include recycled lead products, lithium battery products, as well as new energy storage battery products for wind and solar power generation systems. The Company operates its businesses in China. more »

HKG Price
HK$11.56
Change
-1.5%
Mkt Cap (£m)
1,243
P/E (fwd)
7.1
Yield (fwd)
4.2

Mytilineos Holdings SA is a Greece-based industrial group, which operates in a number of sectors. It operates in the sectors of Metallurgy; Engineering, Procurement, and Construction (EPC); Energy, and Defense. Its main operating business segments are: Metallurgy, Constructions and Energy. The Company operates in the Metallurgy and Mining sector through its subsidiaries Aluminium SA (Alumina-Aluminium) and Sometra SA (Zinc-Lead). The Company operates as an EPC constructor through its subsidiary METKA. Furthermore, the Company operates as an independent energy producer through a portfolio of approximately one Gigawatt (GW) of installed capacity from thermal plants and over 1,000 Megawatt (MW) of Renewable Energy Sources (RES) in different stages of development. more »

ATH Price
€9.26
Change
-0.8%
Mkt Cap (£m)
1,160
P/E (fwd)
7.3
Yield (fwd)
4.1



  Is Sirius Real Estate fundamentally strong or weak? Find out More »


6 Comments on this Article show/hide all

oaktree 8th May 1 of 6

Hi

Have started buying the SIF portfolio and SIF international portfolio. But for the international will limit it to Asian and UK quoted as thats what I have paid screens on.

Looking forward to the next article.

PS trying to keep some cash as believe its been along time since a bear market which is only a matter of time away. Currently at 20%. Be good to have an article on just how much cash one should have. My feeling is the same analysis can go into that cash balance level as the SIF stock picks. So surely over time there is a cash % level thats right to have x years after a bear market has ended? I sleep well knowing I have both camps covered.

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ddinksdadd 9th May 2 of 6
1

Hi Roland,

i would be interested to hear how you are getting on buying the stocks from the international screen, and how easy or hard is it for a UK based investor to participate practically?

Regards

Jim

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Roland Head 9th May 3 of 6
1

In reply to ddinksdadd, post #2

Hi Jim,

The international version of the SIF portfolio is strictly a virtual portfolio, which I'm developing as an experiment. I don't own any of the stocks unless disclosed otherwise (at present only one or two of the UK stocks).

I don't have much experience of investing internationally. My impression is that for mid/large caps it's easy enough to invest in EU and US stocks. I know some brokers also cover the main Asian markets. The big spread betting firms also provide a good choice of markets - at least IG does.

Regards,

Roland

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Roland Head 9th May 4 of 6
1

In reply to oaktree, post #1

Hi Oaktree,

Thanks for your comment. I should emphasise that my articles represent my opinion only and are not advice to buy and sell stocks. Although I own most of the stocks in the UK SIF portfolio, the international version is a virtual portfolio only.

As for cash, I agree that it can be difficult to find a balance between decent opportunities today and the potential for better opportunities in the future. I don't think there's a single right answer. In my view, the correct amount of cash depends on an investors' personal strategy.

In my experience, some trial and error is required to find the right balance between cash and stocks.

Regards,

Roland

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Roland Head 9th May 5 of 6
1

In reply to oaktree, post #1

Hi oaktree,

One other thought on cash balances. In the case of the SIF portfolio, where stocks are bought/sold according to a fixed schedule and screening rules, there's no need to build up a cash balance. The aim is to stay invested without trying to time the market.

Although the portfolio does have some spare cash at the moment (https://www.stockopedia.com/fantasy-funds/stock-in-focus-portfolio-6449/), this is the result of capital gains over the last two years. I've actually increased the Fantasy Fund's allocation to each new stock from £50k to £55k this year, to try and reduce the cash balance.

Cheers,

Roland

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oaktree 9th May 6 of 6

In reply to Roland Head, post #5

Thanks Roland. I used to be of the mindset that one should be fully invested as over the long term thats the only way to make money ie the market over time goes up. But things are so volatile I do like a bit of cash especially now we are 9 years after a bear market. Jim Slater opened by eyes to this when he wrote about it in the Zulu principle.

Thanks for all your posts.

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 Are Sirius Real Estate's fundamentals sound as an investment? Find out More »



About Roland Head

Roland Head

Private investor & writer on stock markets with a particular fondness for free cash flow, dividends and value, plus an interest in resource stocks. In earlier life, I worked as an engineer in telecoms and IT. The quantitative, rule-based mindset required for this type of work is probably reflected in my investment style.  Another factor that affects my investment choices is my experience working for a large telecoms company at the turn of the century, when tech stocks were booming. Watching this bubble inflate and then implode from the inside was very educational. more »

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