Category: Sector Analysis

Weekly Commentary: 01/07/19

Disruption in the Courts Early for lunch on the 24th floor of Tower 42 in the City I gazed over the tower blocks of the city. When I started work the City buildings stopped at Liverpool Street Station. The area to the north of the station building was rough land inhabited by a flock of […]

The Future of Retail portfolio

Rule number one in investing is to buy what you know, but how does that work when what you know is changing day by day? Richard grapples with clothing and fashion retailers, who are themselves grappling with the emergence of the Internet. Just about every type of retailing is going through profound change thanks to […]

Weekly Commentary: 24/06/19

Structural Change in the City It always amazes me how debt can lead to innovation. Humans find ingenious solutions. The Bank of England was founded in 1694 because the 9-year war against France was expensive. Usefully that enabled us to continue to increase the debt which brought about the South Sea Bubble and subsequent crash […]

Weekly commentary: 17/06/19

It’s “avoid the warnings” time Last week saw a few profit warnings. Somero, Ted Baker, Quiz, Pendragon warnings were based on revenue disappointments but I suspect cost pressures are building too at the moment. The trend of increasing warnings appears to be a growth trend with Q1 showing the highest number of warnings in this […]

Checking the numbers match the story

One thing we should always check is that a company’s long-term performance matches the story it tells us. Churchill China says it is “adding value” to tableware, a horrible bit of jargon that is easily corroborated in SharePad. I received a nasty shock last time I reviewed one of my long-standing investments. Familiarity, I said, […]

Weekly Commentary: 10/06/19

Companies with Culture The noise around Woodford’s humiliation last week was deafening. And it was a bad week for Hargreaves Lansdown (-14%). I don’t recall such a lot of noise around a fund manager since the demise of New Star in 2008 having paid a special dividend to shareholders and gearing up into a bear […]

Weekly Commentary: 03/06/19

The “End of Global Trade” Week Last week the talk moved from politics to trade wars. Consensus seems to be that the trade war between the US and China is set to continue for a while. With the UK political situation causing uncertainty which slows management decision making processes there is reason to worry that […]

Screening For My Next Long-Term Winner: Plus500

Before I start looking at Plus500 (LSE: PLUS), I have some good news…. …you can now employ my SharePad screening criteria with just a few clicks! The process involves SharePad’s amazing Filter library. This facility gives you complete access to numerous pre-defined filters that have been used within various SharePad articles. Just follow these instructions […]

Two good companies, but which is better?

Richard takes a first look at Softcat, and he likes what he sees, even in comparison to rival Computacenter, another fine business. Both companies make good money distributing IT, but in Softcat he may have spotted a company with a growth culture. I wrote favourably about Computacenter in October, so I have two good reasons […]

Dark days for regulated utility shares

Since they were privatised in the mid 1980s and early 1990s, the shares of regulated utility companies have found a place in many private investors’ portfolios. Their main attraction has been an ability to offer a higher income than government bonds with plenty of dividend growth on top. This made them ideal income stocks. With […]

The elusive hire firms you can buy and hold

Last week I introduced the listed plant and tool hire companies and mentioned in passing the industry has a bit of a boom bust reputation. Perhaps I didn’t egg the pudding enough, though. Ashtead’s market capitalisation is nearly £10bn, more than ten times what it was nearly two decades ago. In one sense it’s an outstanding growth […]

Homing in on hire firms

Homing in on hire firms When business is sluggish at construction sites and factories, tools and equipment are returned and hire companies make less profit. The hire industry has a boom-bust reputation built on top of the boom-bust reputations of some of the industries it serves. It may seem like an ambitious project to seek […]

Sector Watch: Beverages

Companies which make and sell branded drinks have long been popular with investors. One of the main reasons for this is that as businesses they are very easy to understand. They sell products which millions of people consume daily and are very familiar with. Let’s take a quick tour around the UK quoted beverages sector […]

Sector Watch: FTSE 100 and AIM 100 Miners

Mining companies are very difficult to analyse. Their profits and cash flows are very closely related to trends in commodity prices and sentiment towards the economy in general which means that they tend to be very volatile. Unsurprisingly, share prices move and up and down a lot too. From an investor viewpoint, the inherent volatility […]

A great year for modified magic formula investing

A year ago I started a trial of three model portfolios based on Joel Greenblatt’s magic formula approach (click here to read more about this). I wanted to see how this strategy would work in the real world and with all investing costs taken into account as many studies of investment strategies ignore costs. The portfolios are […]