UK Value Investor

Summary: Morrisons is a supermarket and along with the other major UK supermarkets, it’s had a tough few years competing against the German discounters Aldi and Lidl.Revenues, earnings and dividends fell, but are now starting to recover and grow.Morrisons’ dividend yield is low, suggesting high future dividend growth, but I think the market is probably overoptimistic.10-Year growth rate: Below averageMorrisons is not a high growth…

In this post I look at the FTSE 100’s current CAPE (cyclically adjusted PE) valuation and then use that to make a short-term forecast for 2018 and a long-term forecast for 2027. Is the FTSE 100 expensive? The large-cap index has repeated hit all-time highs during 2017, and at a current price of 7,550 it sits only a few points below its highest ever closing…

Unilever is one of those defensive income stocks investors love to love. In fact, investors love Unilever shares so much they’ve pushed the price up from £25 in 2015 to a recent high of £45. Does this mean Unilever is an "expensive defensive"? High quality, but overpriced? Unilever: A defensive growth stock in a world of frightening volatility Investors love Unilever because it’s pretty much…

After six long years I've finally decided to sell BAE Systems.In terms of raw numbers, the results look like this:Purchase price: 308p on 21st June 2011Sale price: 643.5p on 8th May 2017Holding period: 5 years 10 monthsCapital gain: 106.7%Dividend income: 34.9%Annualised return: 18.0%In this post I’ll cover why I bought it, what happened during those six years and why I’ve decided to sell now.Overview: Buying…

IG Group is a world leader in online foreign exchange (forex) trading, spread betting and CFDs (contracts for difference) and it’s a stock I’ve owned for about two years.I bought into the company at 603p in 2014 and since then the shares have risen by almost 60% to 940p today. That’s a healthy gain by any reasonable standard, but despite this increase I still think…

Hi Merlotman, your plan sounds like a good starting point. I like your idea of having two screens, one for buying and a more relaxed one for selling. I guess most screen-based investors will tend to have an implicit 'sell screen' (I know I do) but having an actual sell screen might be better because it should create more disciplined selling. At least in theory!

I think the key point is to remember that share prices are just someone else's opinion of what a company is worth. And since most people aren't forced buyers or sellers, it's an opinion you are usually free to ignore.

Hi Roland, here's my take on cyclicals: As a general rule I try to have at least a third of my portfolio in defensive sector stocks as another way to reduce risk. At the moment this is proving very difficult because defensive dividend-paying stocks are mostly still flavour of the month it seems, with valuations that are too high for me. I currently have about…

A solid list of diversification factors, although personally I don't really think about size as a diversification tool. I do try to control sector and geographic diversity though, and also just the number and position sizes of holdings. My diversification rules are: 1) Number and size of positions: I aim for 30 stocks, with no more than about 6% in any one company. 2) Sectors:…

Hi Gus, well the markets all certainly "caught a cold" at the same time in recent weeks. However, this doesn't bother me because lower prices simply mean more attractive prices and higher expected future returns (assuming it's a price correction and not a collapse of long-term future economic prospects, which IMO is far less likely and a different kettle of fish altogether).