Small Cap Value Report (5 Sep 2016) - CAMB, VTU, SDY, KOOV, BLV, CARR, REDS

Monday, Sep 05 2016 by

Good morning!

This morning's report comes to you from an alley on a side street in Corfu old town!

I'm flying back to the UK on Weds. So there will be a normal report today & tomorrow, but Weds will be late I'm afraid, as I don't get back home until about 3pm. I'll still do a report, but it will be late afternoon/early evening on Weds. Sorry about that.

My experiences of fund management

EDIT: Clarification - Fundamental Asset Management

I seem to have accidentally caused some confusion, for which I apologise. Fundamental Asset Management has asked me to clarify that the only part of their business I was involved in was a minor portfolio service called the Small Cap Value Portfolio.

So the SCVP had nothing to do with FAM's core business of IHT portfolio management, which is of course continuing completely as normal! (and is an excellent, well-run, strongly performing service).

One reader apparently misunderstood, and thought that FAM was shutting down, which obviously it isn't! This has caused a few red faces, for which I profusely apologise.

Over the last 3 years, I helped to run a portfolio management service, called the Small Cap Value Portfolio, through an excellent FCA-regulated firm called Fundamental Asset Management (who are specialists in IHT planning portfolios). Working with FAM has been terrific - they're really genuine, decent people, and have a wealth of experience in AIM stocks.

I've not mentioned it here before, as it could have been seen as a conflict of interest (i.e. being seen to drum up new clients by mentioning it here), so Stockopedia asked me not to refer to it here in the past. I did however declare all positions held, within my usual disclosures here, as if I held them personally (which I did in nearly all stocks anyway).

However, seeing as we're winding down the very small SCVP service (due to failing to reach critical mass to make it cost-effective), I thought it would be worth a mention, to pass on some snippets on what I've learned from 3 year's work, helping to (as part of a regulated team) manage other peoples' money.

NB. This has no effect on FAM's main activities, as noted above.

Firstly, it's incredibly stressful! If you lose your own money on a share that goes wrong, it's annoying, but you learn the lessons (if there are any - sometimes it's things you could never…

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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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Cambria Automobiles plc is a motor dealer, which is engaged in the sale and servicing of motor vehicles. The Company is engaged in the provision of car vehicle sales, vehicle servicing and related services. It is a retailer of new and used cars, commercial vehicles and motorbikes. It operates on a dealership-by-dealership basis. It operates from approximately 30 sites with a total of over 50 dealer franchises. It operates dealerships across England, from the North West through the Midlands, down to Kent in the Southeast and across Exeter in the South West, trading under local brand names, such as Dees, Doves, Grange, Invicta, Motorparks and Pure Triumph. Its brand portfolio comprises Abarth, Alfa Romeo, Aston Martin, Dacia, Ford, Fiat, Honda, Jaguar, Jeep, Land Rover, Mazda, Nissan, Renault, Seat, Triumph, Vauxhall and Volvo. It also provides ancillary services. It offers finance and insurance for the execution of the transaction along with service plans to maintain the vehicle. more »

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Vertu Motors plc is an automotive retailer in the United Kingdom. The principal activity of the Company is the sale of new cars, motorcycles, and commercial vehicles and used vehicles, together with related aftersales services. The Company is engaged in the provision of management services to all subsidiary statutory entities. The Company operates a chain of franchised motor dealerships offering sale, servicing, parts and bodyshop facilities for new and used car and commercial vehicles. The Company also operates various franchise dealerships, such as Volvo, Volkswagen, Land Rover, Audi, Mercedes-Benz and Jaguar, and operates Honda dealerships in the United Kingdom. The Company operates approximately 125 franchised and over three non-franchised operations across England and Scotland. The Company's subsidiaries include Bristol Street First Investments Limited, Bristol Street Fourth Investments Limited, Vertu Motors (VMC) Limited and Grantham Motor Company Limited. more »

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Koovs plc is a supplier of branded fashion garments and accessories for sale by a third party through Website principally in Republic of India. The Company offers dresses, tops, jumpsuits and playsuits, skirts, trousers and leggings, cardigans and pullovers, lingerie and sleepwear, and swim and beachwear, among others, for women. It offers shirts, t-shirts and polo shirts, vests, jeans, jog pants, shorts, hoodies and sweatshirts, coats and jackets, and innerwear and socks, among others, for men. In addition, the Company offers bags and wallets, accessories, sunglasses, jewelry and watches. The Company offers its products of various brands, including Knockaround, KOOVS, Kultprit, Pataaka, Pepe Jeans, Shuffle, Sole Threads, Vans, Voi Jeans, Modello Domani and Mr Button, among others. The Company's subsidiary is Koovs Marketing Consulting Private Ltd. more »

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66 Comments on this Article show/hide all

tads 5th Sep '16 1 of 66

Just wait till Dyson starts making cars. He's already bought the battery technology for it.

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FREng 5th Sep '16 2 of 66

From the comparison charts, it seems Cambria Automobiles (LON:CAMB) has outperformed Vertu Motors (LON:VTU) - is there a sector index that would be useful to compare, or a sector ETF?

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harry34 5th Sep '16 3 of 66

Hi Paul,

I own a Nissan Leaf, and I am not convinced that the servicing costs will be that much lower in the long-term. The extra weight of the electric engine mean that the tyres and brake-pads wear out quicker than conventional cars. But I have no idea what the margins are for that sort of repair. But we end up getting the car serviced as regularly as we used to with petrol/diesel ones.

Does any reader know of a listed company that installs the electric charging points at home? That is a huge growth market!

I am invested in Vertu Motors (LON:VTU) also. But my pick of the sector remains Caffyns (LON:CFYN).

Enjoy the remainder of your holiday!

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biloseli 5th Sep '16 4 of 66

Paul, I think it says something very good about you that you feel worse about losing someone else's money than losing your own. I think this probably makes you better-suited to fund management than many in the industry. Perhaps it's a little like power: those most fitted to wield it are often those least likely to want it.

Lee Freeman-Shor's book "The Art of Execution" has a lot of interesting things to say about running winners. I was particularly struck that his analysis of his best-performing fund managers showed their win/loss ratios were the worst of all the groups he looked at: their majority of their picks were losers. What made them successful was their ability to run winners and cut losers: to "materially adapt" as Freeman-Shor puts it. It's a fascinating book and I recommend it to any investor. I originally learned about it on SCVR, so many thanks to whomever first recommended it here.

I'm sorry to say I sold out of Boohoo.Com (LON:BOO) in Jan 2015, following my rules at the time. My experience with BooHoo actually persuaded me to change my rule on profit warnings.

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Ramridge 5th Sep '16 5 of 66

A headline some 2 months ago
"Tesla took delivery of large quantities of battery cells from Samsung"

I have a vision of Tesla cars unexpectedly blowing up .

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MrContrarian 5th Sep '16 6 of 66

In reply to post #149247

Electric car brake pads will last longer due to regenerative braking.
The longevity of the battery pack is the biggest concern. Although rated mileages are very high experience with laptops is not encouraging.

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About Paul Scott

Paul Scott

I trained as an accountant with a Top 5 firm, but that was so boring that I spent too much time in the 1990s being a disco bunny, and busting moves on the dancefloor, and chilling out with mates back at either my house or theirs, and having a lot of fun!Then spent 8 years as FD for a ladieswear retail chain called "Pilot", leaving on great terms in 2002 - having been a key player in growing the business 10 fold. If the truth be told, I partied pretty hard at the weekends too, so bank reconciliations on Monday mornings were more luck than judgement!! But they were always correct.I got bored with that and decided to become a professional small caps investor in 2002. I made millions, but got too cocky, and lost the lot in 2008, due to excessive gearing. A miserable, wilderness period occurred from 2008-2012.Since then, the sun has begun to shine again! I am now utterly briliant again, and immerse myself in small caps, and am a walking encyclopedia on the subject. I love writing a daily report for on most weekday mornings, constantly researching daily results & trading updates for small caps. Cheese! more »


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