Category: Weekly Commentary

The last “forever” stock For Jeremy’s last weekly note he reviews his value investing mistakes and aims to find the stock that in 10 years’ time will ensure he is remembered fondly. Read more

Lessons In the spirit of reflection in a year of uncertainty and extremes, Jeremy analyses some past weekly notes and takes another look at one he wants to dig his heels in on and say “I am sure I am right”. Read more

The Relative Value Trade With a huge injection of liquidity last week the valuation differential between large US tech stocks and UK small companies is becoming extreme. Jeremy takes a look at the relative merits of LoopUp vs Zoom and Beeks Financial Cloud vs RobinHood. Read more

Clearing up the debris The pace of structural change is faster, perhaps, than ever before and there are an increasing number of quoted companies dedicated to managing this change. A new entrant into the insolvency funding market, RBG Holdings, could well be set to benefit despite a number of red flags. Read more

Flight to Quality As the bubble spreads from large tech to healthcare and motor companies in anticipation of a flight to quality Jeremy takes a look at Judges Scientific and SDI Group. Read more

Inflation The growth bubble continues, but eyeing inflationary storm clouds gathering over the horizon Jeremy takes a look at Melrose Industries as a potential hedge against inflationary threats. Read more

Director Dealing As markets tread water after extreme volatility Jeremy finds that directors have a 77% win rate on their purchasing during the volatility. A trawl of those still underwater may indicate some treasures that are overlooked. Read more

High Conviction from here on With the seamless transition from bear market to bubble Jeremy suspects that now is a time to make sure we have conviction in our holdings. Tatton Asset management is his highest conviction holding. Read more

On-line valuations The silly valuation of the latest US IPO causes Jeremy to ponder some of the UK online valuations and finds the spreadbetters to be under appreciated by UK markets Read more

The Recovery Trade In this strong market the pain trade is to buy. There are reasons this could be right and Jeremy suggests the carpet retailers recovery potential hasn’t yet been reflected. Read more

Dash to Trash After 14 years of growth out-performance, value is now set to perform in a recovery. Jeremy takes a look at the value available in the high street banks and wonders if the value will out. Read more

Investing in Intangibles Intangibles take greater precedence today. Both accountants and governments struggle with this while markets are quick to find answers through royalty companies. Trident looks potentially interesting while Duke Royalty may have a good concept but may have strayed into private equity land. Read more

Investing in Acquirors Jeremy worries about software valuations and is concerned that returns at Ideagen and Tracsis could turn out to be far less than markets appraise them to be. Read more

The 50-year view As equity markets squeeze up Jeremy suggests equities may have further to go on the back of credit markets. A screen of resilient dividend payers finds 3 strong fund managers to be some of the best performers in the current money printing environment. City of London Investment Group is the recovery situation […]

The Small Cap Opportunity With markets squeezing up, pushed by central banks money printing we are at a moment of opportunity for overlooked small cap stocks. Jeremy takes a look at Eddie Stobart Logistics and FBD Holding as two complex and therefore potentially overlooked situations. Read more

To the Future With markets trending sideways Jeremy sees inflation ahead and takes at look at the food manufacturers which could be beneficiaries. Devro’s sausage casings could benefit in due course while Greencore could be a recovery stock. Read more

Depression in a Wall of Money The market is caught between an oncoming depression and a wall of money inflating valuations. In this environment the bar bell approach is more appropriate than ever. Jeremy looks at Genus, Aquis Exchange and Urban Exposure as companies at differing ends of the bar bell. Read more

With Recovery comes Refinance It is easy to stress over whether we are in a bear rally or the start of a bull market. But we know that companies have stressed balance sheets from disruption. Rather than chase individual opportunities it may be simpler to own the quoted brokers. This could be their time. Read more

After Value comes Recovery In a world full of value Jeremy takes a look at what a recovery may look like and picks a couple of cyclical recovery stocks with strong balance sheets that should benefit strongly in recovery. Mission Group and Zotefoams. Read more

Value time With no earnings visibility it is easy to forget there are green shoots over the horizon. This is a time to seek value. A SharePad screen reveals 11 situations, of which 6 look worthy of further research. Read more

Irrational or True? We are now in a market of fear and there are signs of inefficiency and irrational behaviour, which is a time of opportunity. Jeremy highlights Plus 500 with conviction. Read more

Timing is everything With the current crisis Jeremy dusts off the recovery stocks folder. Airlines that survive will have huge upside on the back of a lower oil price. The opportunity may be in the likely refinancing issues, and Primary bid is a useful tool to enables retail investors to participate. Jeremy registers his interest […]

Purging Excess Bear markets cleanse excess. Jeremy takes a look at the growth narratives and accounting adjustments that have been adopted and suspects the bear market may continue until these are cleansed. Read more

Correction or Bear Market? The question of whether the sudden market correction is a temporary contagion of fear, or the beginning of a bear market is key now.  Fearing the bear, Jeremy finds a lot of attractions in Andrew Sykes. Read more

Barbell Portfolio The tax advantages of technology companies and private equity combined with quantitative easing are shrinking stock markets. Until this changes the shrinkage will continue. In this environment a Barbell portfolio is likely to outperform. Jeremy suggests Alpha FX and Non Standard Finance as two companies at polar opposites of the valuation spectrum. Read […]

Dinosaurs don’t gallop Jim Slater coined the term “elephants don’t gallop” and in this technology enabled era it may be better termed “dinosaurs don’t gallop”. In a hunt for tech enabled small companies Jeremy finds himself enamoured with Plus 500. Read more

Employee Culture With quality as the watchword a review of staff feedback can tell us much about the culture of a company. A review of all companies on AIM underlines conviction in some highly rated companies while underlining that Applegreen, the petrol forecourt operator is more about financial leverage than staff welfare. Read more

Mind the Gap It’s been a good few months. The FTSE small cap is up 14% since October, while the FTSE 100 is up around 7%. Suddenly the buy ideas start to disappear with prices adjusting upwards as the arrival of dawn reminds us the party is nearing a close. Which is often a useful […]

Culture in Payments There were no spare seats when I arrived at Panmure Gordon’s offices last week for the Non-Standard Finance investor day titled “Culture driven Performance”. The presentation was riddled with keywords such as “Integrity”, “Clarity”, “Respect”, “Trust”, “Empathy” etc. I particularly liked John Van Kuffeler’s description of the loan correspondence he has from […]

Culture Luck plays a part in investing but there is also a theory that you make your luck. Both K3Capital and Dart Group are cyclical businesses which performed strongly in the second half of last year. It could be that they got lucky with the cycle going in their favour or Thomas Cook going bust, […]

The Roaring 20’s Nothing quite starts a new decade as reassuringly as Greggs Vegan Steak Bake causing late night queuing in Newcastle. With Pizza Hut’s vegan pepperoni pizza, Costa’s vegan ham and cheese toastie, KFC’s vegan chicken burger and M&S’ vegan chicken Kiev and Macdonald’s veggie dippers this could be a good decade to be […]

Change Alley Suggesting that Scrooge’s drive and self-discipline was something we should aspire to didn’t go down well with my millennial children. I rationalised the barrage of criticism as the product of low rates, plentiful debt and cheap money making the concept of being economical unpopular. Scrooge’s world was one of narrow dark alleyways -similar […]

Lessons for 2020 It has been rather enjoyable as the year draws to a close. The Boris Bounce was a pleasant experience for investors. Excitingly for some it was a rally in the value stocks. Top of the leader board was the FTSE Small cap rising 5.6% closely followed by those high yield stocks while […]

The Golden Era of Small Caps The fear was palpable last Thursday as I sat in a broking office. The millennials queuing at the voting booths put the fear of God into those traders worrying about a labour government. The traders’ buy to let property portfolios that they had constructed in the image of the […]

The Volatility Reduction Trade The gating of M&G’s property fund caused the press to become excitable last week. The Questor column in The Telegraph advised investors they were “crazy” to have money in open ended property funds as Aberdeen Property fund redemptions accelerated. Brexit crisis and retail gloom also featured as news wires sensed a […]

Shrinking Markets The liquidation of Nautilus Minerals caught my eye last week. This was a company which was to be one of the first underwater miners aiming to recover gold, silver and copper from deep water off the coast of Papua New Guinea. Such escapades are not new. In the 1680’s the government “found” some […]

Superstocks I have been living with value stock affliction for some time. It can be irritating particularly when the wind is blowing the wrong way. In the past it has led to text messages from colleagues saying “What price did you get into G4M – oh dear you don’t have any” – just after they […]

What Goes Around…. It is clear the technology growth bubble is now starting to unwind but the difficult question is where to go to next? I have wondered about the mining sector in previous weeks and last week I used some SharePad screens to find cheap, well capitalised, quality companies. In truth I have been […]

The Cult of Equities Each week that passes my excitement is building. Value is coming back. I have felt like a fish out of water as what appear to me to be millennials tell me I am crazy not buying the latest hot stock on a PE of 45X. And these millennials are buying their […]

Profiting from Folly and Disaster Old fashioned companies such as TP ICAP have started putting strong trading statement out which is strange times indeed. This is an old-fashioned voice broker of financial products. The staff are renowned for loud and boisterous traditional city behaviour which resulted in a £15m settlement with the regulator for their […]

Sticking to our guns Investing can be lonely. Buying stocks in a downturn can be hard – we don’t know if we are catching a falling knife. Traders tell us we should operate with a stop loss policy so we sell when a stock has gone down, say 20%, but for a long-term investor this […]

A New Era Dawns Often it is easy to be so pre-occupied with the present that we miss the elephant quietly sauntering past the boardroom windows. The focus on Woodford Investment Management closing its doors over the week end was deafening. It will no doubt continue on BBC Panorama at 8.30 tonight when it airs […]

Forex There are reasons to be gloomy just now. As I walked past Westminster last week the protester carrying an anti-Brexit placard looked forlorn as the extinction rebellion protesters drowned out his signage. Over in Hong Kong the protests are about something else altogether. While in Japan typhoons are disrupting the rugby. It is getting […]

Special Situations At times like this it is easy to make mistakes. I confess to being bored of my stocks. They haven’t done anything exciting for a while. The most exciting thing last week was Gervais Williams of Miton tipping Randall & Quilter in the Telegraph causing a 9% rise on the day. Volumes are […]

Liquidity Crunch Across the table in the rather tired looking meeting room, the grey haired but immaculately presented fund manager bit his bottom lip as he prepared to disclose something – telling me he was uncomfortable about what he was about to utter. This was probably the important part of the meeting. He is a […]

Navigating Change Conservatively Sometimes it can be useful to stand back and take stock so we don’t get those market eyes that can’t see the wood for the trees. It seems with the abandoning of the WeWork IPO the bubble may be drawing to a close. We have had such bubbles before. In the 1680’s […]

Inefficient Markets I find myself increasingly bullish. Or maybe I have recently had a holiday and by the end of the week all bullishness will have gone.  Seemingly macro fears have led to risk aversion. The FTSE 100 is 7.7% down from its peak in May 18, while the FTSE Small Cap index is 18% […]

Business Models I found myself wondering whether models become outdated over time. In this age of diversity, governance reporting, and gender indexes I question whether our parliament using whips may be a little outdated. When I was at university, business models were those of manufacturers, distributors and retailers. We didn’t have “Bricks and Clicks”, “Freemium […]

It’s a bi-polar world Printing money hoping that will engineer inflation has in the past resulted in inflation, but it hasn’t worked. As central banks increase their balance sheets the hope was that banks use the reserves to create money to increase their lending, but that only happens when banks wish to lend and borrowers […]

The Great British Corporate Sale One of the things the City of London excels at is selling its own to overseas acquirors. Back in the day Messrs Wasserstein and Perella sold themselves to Dresdner Bank to create Dresdner Kleinwort Wasserstein which didn’t seem to end very well. Warburg sold themselves to Dillon Read until the […]

Agricultural Investing The nerves were tested last week. Back in Q4 last year the 17% fall in the FTSE 100 was one of those typical draw-downs that happen towards the top of a bull market. It is necessary to have sucked in all the “buy the dip” money before the market can reset finally when […]

The Narrative of Growth I suspect I am not alone in being trained as a value investor in the 1980’s. That was an era when straws were made of plastic, burgers were made of meat and bonds paid an income. No longer. Today in an era when bonds don’t pay income the trophies go to […]

In need of boredom Equity investors need to be an optimistic bunch – since equity markets outperform over the long run. Academics Dimson Marsh and Staunton titled their study of 20th century market returns “Triumph of the Optimists”. But sometimes it’s hard. Like last Wednesday when Intu reported a decline in NAV/share to 252p and […]

Testing times I find this one of the most uncomfortable investing era’s I can recall. The outperformance of growth stocks continues while markets grind higher over a sultry summer. I have always had a secret hankering after the ugly duckling that turns into a swan and so have a natural bias to value. Which has […]

The Greening of Fund Management It is still useful to contemplate the state of the world over a good lunch as I did last week enjoying a long and slow sunny afternoon with a fund manager friend. We reflected that undoubtedly the investors buying into Beyond Meat, the $10.7bn plant burger company would be the […]

Where are the Customers’ Yachts? The book “Where are the Customers’ Yachts?” by Fred Schwed was written 75 years ago but as we watch the continuing headlines over Woodford it seems as relevant today as then. It has some very useful investing lessons for us. Three of my favourite lines in the book are as […]

The Bubble has burst Sometimes we spend so long waiting for something to happen we don’t realise it has started. But I think it has already started. No one rings a bell at market changing points. There are the 1987 and 1929 crashes that are obvious but the top of the technology bubble in 200 […]

Time to own value? Unicorns The Unicorns stable door has been left wide open. Beyond Meat, a US loss making protein meat brand, listed in New York in early May rising 163% on its first day of trading valuing it at 27X last year’s revenues. This followed the loss-making Pinterest rising 28% on its first […]