Author: Richard Beddard

Nichols: As sweet as grape, blackberry and raspberry again

If ever there was a company that demonstrated complexity can be bad for business, it’s Nichols. When diversified, profitability crumbles. When it sticks to marketing soft drinks it prospers. Guess what it is doing now?  The one thing you will not read much about in this article is Vimto. Vimto is a soft drink and […]

Homing in on quality

Richard tightens up his “Minimum Quality” filter so that SharePad is doing more of the heavy lifting. In a not-very-scientific test, 18 out of 21 good-quality businesses were identified by it. Last month I shared a list of all the companies that passed my semi-automated sifting of the entire stockmarket over the course of the […]

Show me the MONY

Richard unearths five good-quality businesses that have recently published annual reports. Top of the list are InterContinental Hotels (IHG), and MoneySupermarket (MONY)… Joyfully, I am away on holiday but my holiday is mistimed in one respect. The post-Christmas lull in annual report publishing has come to an end. A large number of companies with financial […]

My SharePad system

Having used the 5 Strikes system for nine months, Richard has decided it is a keeper. Commenting on the latest investment candidates to achieve less than 3 strikes, he explains what he was thinking while he was separating the wheat from the chaff. Happy New Year! At the turn of every year, I review my […]

Six new stock ideas

Six shares have passed the first stage of Richard’s 5 Strikes process. Many of them are destined for the “too hard pile”, perhaps the most underrated element in an investor’s toolkit. Here is an update on the latest companies to have published annual reports and passed the 5 Strikes system*. Since the last update four […]

15 new stock ideas

It has been a month since Richard revealed the latest shares to pass his 5 Strikes system. The good news, some have passed with flying colours. 5 Strikes* is my main method of discovering new long-term investments, and since we share my discoveries here regularly, some readers will be familiar with it by now. If […]

Hey big spender

The Capex to operating cash flow ratio can tell us a lot about a firm’s priorities. Richard explores the ratios of a number of capital-intensive businesses. For many years I have held shares in Goodwin, a family owned mini-conglomerate of engineering businesses. This gaggle of businesses is capital intensive, which means Goodwin has to invest […]

All the zeros

Since Richard started scoring companies in SharePad last April, twelve companies have scored zero strikes, the best possible score. In this article, he decides which of them to research next. Five-strikes-wise, there is not much to report on. I have awarded four shares that have reported in the last two weeks with less than three […]

Is SDI cheap?

Shares in SDI have plummeted. Richard examines the price differential between the company, a manufacturer of scientific equipment, and Judges Scientific, a firm it is often compared to. In the last two weeks, my 5 strikes system* has only surfaced two new investment ideas: SDI and Goodwin. These businesses have good financial track records, but […]

Four companies with (almost) unblemished financial histories

Richard picks holes in the financial histories of four companies and finds little to trouble him. Remarkably Cake Box, a company that published an annual report riddled with errors two years ago, is one of them. As fishing expeditions go, my daily trips in the last two weeks have been particularly unfruitful. Few companies have […]

Freaky Franchises

Richard finds 11 franchisors listed in London and pits them against each other in a championship to find the best one. In round one, a wildcard goes out to the number two seed. One of the first things I noticed when I started scoring companies in SharePad this spring was that franchises were scoring well. […]

Born in the UK

Although Arm will list in the USA, there should be nothing to stop us buying shares in Britain’s top tech company after it floats. This idea leads Richard to a potentially rich seam of investments he has not previously explored: UK firms listed in the USA. Judging by the headlines, news that Arm is to […]

Roll your own alternative performance measures

Richard looks at the good and the ugly in Hollywood Bowl’s alternative performance measures and concludes that the company has put a positive gloss on adjusted profit. In Getting to grips with Alternative Performance Measures (APMs), I explained that exceptional items are costs or gains that obscure the underlying performance of a business. This does […]

Getting to grips with Alternative Performance Measures

Companies publish alternative performance measures (APMs) that remove one-off costs and gains from profit to give us a better understanding of how they have performed. Like all financial statistics, though, APMs can be abused. Investors should always check how they are calculated. Since making profit is the reason for being in business, many Alternative Performance […]

My partner is an AI

Richard deploys ChatGPT, an artificial intelligence program, to help him understand two software platforms we can invest in that incorporate artificial intelligence. His conclusion: this is not a dystopia, it is the start of a partnership. Unless you have been living under a rock, you have surely heard of ChatGPT. It is an artificial intelligence […]

Refining ROCE

Technically, Sharepad’s ROCE calculation is ROACE or Return on Average Capital Employed. It is a good refinement of perhaps the most revealing performance statistic for a business. Sometimes readers ask me why my figure for a certain financial statistic is different from SharePad’s, or the figure quoted by the company. Usually, it is because the […]

Ploughing through an economic blizzard

Digging deep into stock market sensation Halma’s history, Richard gains clues about the kind of businesses long-term investors should think about owning in an economic blizzard. I have never owned shares in Halma, in fact, I have never considered owning them even though the business has performed extraordinarily well. Halma: Proof that roll-ups can grow […]

Risky business

Richard writes an obituary for RM, his investment, rather than RM the business. It surprised him when it updated its risk report mid-term last week, despite what he had already learned. Perhaps it is because I do not scrutinise interim (half-year) results very often, or perhaps it is because I generally avoid heavily indebted companies, […]

The promise and the peril: Learning Technologies

Richard takes a first look at Learning Technologies, a company aggressively buying businesses that make employee training and development content and software. Learning Technologies’ is a slightly bewildering agglomeration of businesses that helps organisations get the best out of employees. It creates training content for employers and makes software both for the creation of training […]

JDG V SDI: The Battle of Buy and Build

Shortly after Judges Scientific makes its biggest-ever acquisition, Richard sets out to discover whether the pasture is greener over at SDI, a smaller listed business that does much the same thing: buys and builds companies that make scientific instruments. If I were to use one measure to compare highly acquisitive businesses it would be Return […]

Portmeirion Group PLC: Portmeirion goes back to the future (LSE:PMP)

Richard re-examines one of his worst trades and considers whether changes at Portmeirion, the manufacturer of tableware and other home accessories, are enough to make him reconsider. Half a failed trade Portmeirion is one of the more severe of many blots on my trading history. I added Portmeirion to the model portfolio I run for […]

Morgan Advanced Materials | Follow the fd (LSE : MGAM)

Prompted by the notion that executives sometimes vote with their feet, Richard takes a first look at Morgan Advanced Materials. It recently poached Victrex’s chief financial officer. A by-product of attending the Victrex Annual General Meeting earlier this year was the opportunity to ask its chief financial officer why he was leaving for the arguably […]

Luceco PLC| Climbing the wall of worry (LSE : LUCE)

Richard finds answers to his questions about Luceco, a manufacturer of electrical products that power our homes. Knowledge, he finds, can be as powerful as electricity… This time last year one of my screens picked up Luceco, a company that makes electrical products like sockets. I wrote down my hopes and fears in SharePad and […]

Oxford Metrics | Profiting from the augmented age (LSE:OMG)

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Oxford Metrics has an illustrious past, and judging by management’s targets it expects to augment it in future. Richard investigates the past, and ponders the future… I discovered Oxford Metrics while paging through SharePad’s list of the whole market (LSE shares, excluding Investment Trusts) skimming the summary pages of companies that had recently published annual […]

Rediscovering the father of value investing | Benjamin Graham

Reading by the fire

Richard warms the cockles of his heart in front of a digital fire, while reading his favourite investment book… Christmas is approaching, and I must confess to a new and slightly eccentric guilty pleasure. In addition to mince pies and Irish Coffee, I have taken to working (from home of course) in front of an […]

Bytes: Which is the best IT reseller?

Recent flotation Bytes Technology has joined bigger rivals Softcat and Computacenter on the stock market. Richard wants to know what it does differently. In my last article I introduced Marks Electrical, a company that had recently floated that might be an exception that proves the rule that Initial Public Offerings (IPOs) make terrible investments. The […]

Marks Electrical plc | I liked the service so much, I nearly bought the company

marks electrical plc

Richard was so impressed by his first look at newly listed Marks Electrical, he was tempted to buy something from the online retailer of cookers and other domestic appliances. As for the investment, he was tempted too… I do not know whether it is a glitch or a feature, but a quirk of SharePad has […]

DFS plc | Will the investment last as long as the sofa?

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Richard likes a business that is in control of its own destiny. He takes a look at DFS plc, the sofa seller that unexpectedly featured in his list of vertically integrated businesses. Of all the names that came up in my trawl for vertically integrated businesses, sofa seller DFS was perhaps the most surprising. To […]

Winners in an uncertain world | Vertical integration

In the chaotic business conditions we are experiencing, self-reliance has been a source of competitive advantage. Since we do not ever know what the future will hold, Richard goes in search of companies that have an element of vertical integration. I hope it is not smugness, but I have felt a sense of satisfaction when […]

Four live pivots: Next, Goodwin, Bloomsbury Publishing and Victrex

Richard goes hunting in his own portfolio for companies incubating better businesses. They may be undervalued as a result. As promised, this week I am following up my last article on past pivots that worked with an article about live pivots that look like they are working. I used the word pivot to describe a […]

Betting on change

In the first of two articles, Richard celebrates perhaps the sweetest investment of them all: The humdrum business that incubates a better one. Though my stock-in-trade is businesses reliably executing established and successful strategies, my biggest winners have often been businesses that pivoted. They incubated better businesses from within the business they already operated. In […]

History of Games Workshop shares | When turnarounds become transformations

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Inspired by Maynard’s article on Hornby’s turnaround, Richard examines the history of Games Workshop to imagine what challenges lie ahead if Hornby is to emulate the success of this outwardly similar hobby business. The idea for this article came from Maynard’s article about Hornby. To my mind he convincingly described a turnaround that is already […]

3 questions about Oxford Instruments plc | Deep dive into financials

oxford instruments

Richard goes deep into Oxford Instruments’ annual reports and SharePad for answers to three questions to establish whether it is a good “pick and shovel play”. In my last article I explained how I used custom tables to find Oxford Instruments, a highly profitable business that seemed to have lost its way and then found […]

Financials, filters and FOMO | Using SharePad to find opportunities

Filters are one of the most powerful tools in SharePad, but Richard has been experimenting with another way to discover investment ideas and increase his “market intimacy”. Traders, of course, have price charts to guide them. Many investors focus on financials, and use filters to find new shares with attractive financial characteristics. Being a buy-and-hold […]

Investing in Team17 shares: A team worth joining?

Richard is thinking about joining computer games developer and publisher Team17 as a shareholder. It would be a bold decision, but he would rather invest in Team17 shares than the closest alternative, Frontier Developments. The first thing that attracted me to Team17 was the financials. The second thing was the chief executive. That is because […]

Roll up! Get yer easy returns here…

Bunzl, a company I investigated last year, is a classic roll up A distributor of everyday items consumed by businesses and organisations, it routinely acquires much smaller distributors, improves their efficiency and creates economies of scale. This reduces customer’s procurement costs, and improves the profitability of the mothership. To grow, the company has repeated this […]

Nichols: More than Vimto

Having prospected for investments in the soft drinks industry, I think Nichols is perhaps the most intriguing of quite an interesting group. It has been enormously profitable and a steady grower, unlike the other candidate, Fever-Tree, which has experienced both extraordinary profit and extraordinary growth. Fever-Tree makes me nervous. Explosive growers rarely keep growing rapidly […]

Floored

James Halstead makes vinyl flooring, the kind we see in hospital corridors, GP surgeries, clinics, schools, offices, laboratories, prisons, factories, shops, trains and boats around the world. James Halstead’s biggest brand is Polyflor. The company’s social media accounts are a good way to get a feel for the product and you can take the Commercial […]

What does not kill a business can make it stronger

This article was not supposed to be about paper maker James Cropper. I set out to write about Animalcare, a veterinary pharmaceutical company, but I quickly became disillusioned, wretched even. You probably will hear about Animalcare one day, because it is an interesting business, but it is also complicated and its complicatedness was epitomised by […]

This time is different for Design Group

If you watch Design Group’s annual results presentation, you may detect a bashful smile on chief executive Paul Fineman’s face. Paul Fineman, chief executive of Design Group. Source: Design Group Full Year Results 2020 (video). Despite unexpected tariffs on products imported into the USA from China and the onset of the pandemic, Design Group was […]

A safety first stock

I found James Latham a couple of months ago when I was trawling for cheap shares with strong balance sheets. The shares are still cheap, James Latham’s Price Earnings (PE) ratio is 13, and the balance sheet should remain strong… Centuries trading timber James Latham has a long and storied history. It manufactured plywood for […]

Preparing for the worst, capitalising on the best

Listening to Porvair’s long-standing chief executive Ben Stocks talk about the challenges ahead, it is clear the company is bracing itself. Phrases like “preparing for the worst, hoping for the best”, and “the overall balance is negative”, come readily to him. This is a company I have long admired, but I have never had the […]

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