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 […]
KAINOS
THE SETTING Kainos (Greek for fresh, innovative) was launched in 1986 when the old British IT champion ICL recognised the quality of computer science graduates from Queen’s University Belfast. ICL had a new project involving electricity network analysis and Queen’s had just set up one of the first university incubator companies, Qubis, which was keen […]
What PZ Cussons’ cashflow tells us about its strategy
Having found PZ Cussons through his Keep It Simple, Stupid filter, Richard examines the company through its cash flow statement. To his delight, he finds a company promising to keep things simple too. Two weeks ago I augmented my Keep it Simple, Stupid filter to keep things even simpler. The filter is designed to rule […]
Weekly Commentary: 30/09/19
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 […]
Screening For My Next Long-Term Winner: Medica
Dynamic growth shares are among the market’s most exciting investments. Find a business that has expanded rapidly and offers the prospect of further earnings growth — but also has an overlooked share price — and you could be on to a winner. Let’s use SharePad to pinpoint a possible example. Filter criteria These days many […]
Weekly Commentary: 23/09/19
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 […]
Filtering out the big spenders
Richard invents a new filter that promises to weed out big acquirers in a drive for simplicity he hopes will make investigating his next company easier. Complications tend to keep investors awake at night and wakeful nights are not conducive to long-term investment. You join me today on a quest for simplicity. Keeping it simple […]
Weekly Commentary: 16/09/19
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% […]
Weekly Commentary: 09/09/19
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 […]
The future of holidays portfolio
Richard returns from his holiday and wonders whether he can put the experience to use by investing in holiday companies. First step: Create a portfolio of holiday companies. It is early September, so I am going to take a wild guess and assume you have been on holiday. Hopefully it was a good one. Mine […]
Weekly Commentary: 02/09/19
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 […]
Why shorting is good for investors
Although I am much more of a trader myself as I rely on trading profits to pay my bills, I do think investors have much to be gained learning from the art of short selling stocks. There are several reasons that will be explained in this article, but first it is important to understand what […]
Screening For My Next Long-Term Winner: Hammerson
Buying a share at a discount to its book (or net asset) value ought to be the safest way of investing. Indeed, what could go wrong if you can effectively buy assets worth £1 per share for, say, 50p? The reality — sadly — is not always that simple. Let me show you what I […]
Weekly Commentary: 27/08/19
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 […]
Hidden potential in new division
Richard analyses Bloomsbury Publishing’s segmental report to work out where the profit is coming from. The Harry Potter effect is still evident, but the company is conjuring up another source of profit without recourse to magic. My last article ended on something of a cliffhanger because I had found something out, but I did not […]
Weekly Commentary: 19/08/19
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 […]
Weekly Commentary: 12/08/19
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 […]
Finding the best companies to analyse
A wise man once advised investors to stick to their circle of competence. Richard uses SharePad to keep his eye on the prize, and it leads him to Bloomsbury Publishing… My base filter in SharePad currently returns a total of 596 shares listed in London. It does not do anything clever. It just excludes the […]
Weekly Commentary: 05/08/19
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 […]
Screening For My Next Long-Term Winner: AG Barr
Quality companies undergoing temporary problems can often become attractive investment opportunities. On that basis, perhaps AG Barr is worth closer inspection. The soft-drinks manufacturer famous for Irn-Bru recently warned that profits would be lower than expected… and the share price plunged accordingly: However, AG Barr does boast a quality track record. During the last 40 […]
Weekly Commentary: 29/07/19
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 Four Stages of a Stock
Technical analysis is either loved or hated. Many people like to claim it as ‘voodoo’ and trying to predict the future, but the fact is that technical analysis is useful simply because everyone looks at the same charts and sees the same patterns. It becomes a self-fulfilling prophecy. Those who do not bother to learn […]
The art of the sale
In response to a reader’s request for a sell filter, Richard goes looking for trouble in his portfolio by setting some “curiosity triggers”…. One of the better bits of advice passed between investors is to sell shares when the reasons you bought them no longer hold true. Most of us will have all sorts of […]
Weekly Commentary: 22/07/19
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 […]
Weekly Commentary: 15/07/19
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 […]
Weekly Commentary: 08/07/19
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 […]
Screening For My Next Long-Term Winner: Imperial Brands
Imagine this. You find a blue-chip company that offers: * 21 years of consecutive dividend increases, with the last ten years showing 10% per annum growth; * Management guidance of further 10% annual dividend growth “over the medium term”, and; * A share price with a 10% dividend yield. Too good to be true? Well, […]
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 […]
Screening For My Next Long-Term Winner: JD Sports Fashion
Today I am revisiting the share screen that pinpointed Games Workshop back in January. The shares of the quirky wargaming retailer have soared more than 60% since that review… …and I wonder whether the same screen can unearth another promising opportunity. To recap, the exact criteria I am re-using are: 1) Annualised earnings per share […]
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 […]
Scapa has had a rocky three weeks. Its market capitalisation is down by 50%. Is it a buy?
THE SETTING After nine years of impressive revivification under CEO Heejae Chae, the specialist tapes maker Scapa has just delivered three tingling episodes in three weeks. It could have stabilised now but it’s worth well under half its starting price. Knock one came on the day of its annual results, 21 May. The results were […]
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 […]
Screening For My Next Long-Term Winner: Jupiter Fund Management
Today I have revisited a share screen that applies two ratios favoured by ‘quality’ investors — operating margin and return on equity (ROE). The exact criteria I re-used were: 1) An operating margin (latest and 10-year average) of 20% or more, and; 2) An ROE (latest and 10-year average) of 20% or more. Any business […]
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 […]
Hidden treasure on your doorstep
Finding local businesses listed on the stock market is easy with the help of SharePad and Google Maps. Richard maps the market to find out what’s good in the ‘hood. When I wrote about Portmeirion last time, I promised to review a second “old favourite” in this article. In the meantime, though, I have been […]
Weekly commentary: 28/05/19
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 […]
Screening For My Next Long-Term Winner: Domino’s Pizza
This in-depth article covers one of the most impressive UK growth stocks of the last 20 years — Domino’s Pizza. Domino’s appeared on my radar after I revisited one of my previous SharePad screens. The screen in question searches for companies with dependable dividends and reasonable yields. The exact criteria are: 1) 10 or more […]
Portmeirion: When confidence crumbles
SharePad is not just about discovering new shares, it can help us see shares we are familiar with in a new light. Richard uses it to re-evaluate old favourite Portmeirion and his confidence begins to crumble even before events take a nasty turn… This week, and in a fortnight’s time, we will look at two […]
Screening For My Next Long-Term Winner: Abcam
Today I have returned to the share screen I employed to pinpoint Victrex the other week. To quickly recap, this screen applies two ratios favoured by ‘quality’ investors — operating margin and return on equity (ROE). The exact criteria I re-used were: 1) An operating margin (latest and 10-year average) of 20% or more, and; […]
Bodycote: A stalwart in cyclical clothing
Richard investigates a company that not only walks the walk, it talks the talk. I am not going to lie, even if it means shattering the illusion investors are cool rational calculating machines. I experienced a prolonged period of joy when I started investigating Bodycote. Snared by my Fundsmith filter, the company not only walks […]
Screening For My Next Long-Term Winner: Victrex
This week I am tracking down a potential long-term winner by employing two ratios favoured by ‘quality’ investors. The first measure is operating margin, which represents the percentage of sales converted into profit. In theory, a company exhibiting a high operating margin may enjoy pricing power over customers — which in turn may indicate a […]
RM: Will profit endure?
Richard considers whether the supplier of educational resources and software services can sustain profitability and reignite growth. There’s a good chance, he thinks, which makes RM an intriguing proposition at its current valuation. In my last article, we took a tour through SharePad and RM’s annual report to check its profit was real. RM is […]
Screening For My Next Long-Term Winner: Renishaw
I am convinced the very best shares to own are often led by executives who truly act in the interests of ordinary shareholders. In particular, bosses who: * do not dilute investors by issuing shares willy-nilly; * create dependable returns through a rising dividend, and; * own a lot of shares themselves… …should deliver better […]
RM: Is profit real?
Richard investigates RM, one of the stock market’s great survivors, starting with just one question. It takes him on a twisty trail… Before we get into the numbers, some reasons why RM, a supplier of 50,000 educational products and IT to schools and nurseries and on-screen marking services to exam boards, is worthy of investigation: […]
Screening For My Next Long-Term Winner: Craneware
Years ago I read Super Stocks, an investment book that claimed to reveal “powerful new ideas” to uncover “opportunities for spectacular profits”. I sadly can’t recall identifying any “opportunities for spectacular profits”… …but the book’s “powerful new ideas” did make some sense — not least the concept of identifying companies that undertook significant research and […]
Moneysupermaaaaaaahhhhhhket
The veteran price comparison company is changing, and maybe for the better. Richard investigates one of the companies that easily met the criteria of his Fundsmith filter. I avoid Price Comparison Websites. The notion we should all be like hamsters in a wheel, swapping insurance policies and energy suppliers every year for cheaper alternatives is […]
Screening For My Next Long-Term Winner: Accesso Technology
This article has not turned out as I had expected. I was hoping to study a quality growth business that had seen its share price slump to attractive levels… …but instead I have ended up untangling some very awkward accounts and guessing whether management changes are signalling problems ahead. Sit back and brace yourself. The […]
Fishing like Fundsmith
Richard builds a Fundsmith filter, taking it from concept to conclusion. The aim: To reduce the “junk” in our watchlists so we are fishing in a better-stocked pool of shares. My editor wonders whether my obsession with Fundsmith Equity Fund is a ‘fatal attraction’ but he has permitted one more article. It would be remiss […]
Screening For My Next Long-Term Winner: Hargreaves Lansdown
Quality companies often produce exceptional returns for ordinary investors. Just ask Terry Smith or Nick Train. These ace fund managers have delivered wonderful gains by investing in first-class businesses such as Diageo, Reckitt Benckiser and London Stock Exchange. Let’s use SharePad to find a quality company to study for ourselves. Immense figures imply an incredibly […]
Performance measurement for pros
Investors tend to judge their portfolios by how much they go up or down in value, typically compared to a benchmark index like the FTSE All-Share, over perhaps a year. Taking a leaf out of Fundsmith Equity’s playbook, Richard thinks he has found a better way. In my last article, I questioned Fundsmith Equity, a […]
Screening For My Next Long-Term Winner: Apple
Being able to analyse international shares — at no extra cost! — is a wonderful feature of SharePad. And finding overseas shares within SharePad is easy, too. Simply click on Other Lists within the main toolbar… …and take your pick from the various US and European indices available. I have chosen the top 500 US […]
Putting performance into perspective
Richard reads Fundsmith Equity Fund’s annual letter to fundholders and suggests a modest improvement that could change your perception of financial history. He also responds to reader’s queries about On The Beach, the company he profiled two weeks ago. If you are a fundholder in Fundsmith Equity Fund, then congratulations. You’ve just received fund manager […]
Screening For My Next Long-Term Winner: Games Workshop
Could now be the time to return to dynamic growth shares? Wonder-stocks such as Fever-Tree, Boohoo.com and Keywords Studios are all well below their highs of 2018… …and I wonder whether the widespread selling has created a super-growth bargain somewhere in the market! Let’s employ SharePad to find out. I bought the shares at £8 […]
Starting with the big picture
Richard starts his analysis of fast growing online beach holiday retailer On The Beach with new SharePad views designed to give him the big picture at a glance. Before I start dreaming about holidays, some humble pie. A few weeks ago I ridiculed the idea of using more than three SharePad windows by suggesting they […]
Magic Formula stocks for 2019 & 2018 performance
Back in 2016 we began testing and tracking three model portfolios based on Joel Greenblatt’s magic formula approach (click here to read more about this) and last year we added a forth model (click here to read this article). Regular readers will know how these portfolios are put together. Here’s a quick recap for the […]
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 […]
Assessing whether profit is real
On the face of it Ricardo is a great company, but in recent years its earnings have deviated a long way from the cold hard cash that has flowed into the company. That may be changing. Though I don’t normally pay much attention to share prices, a 40% slump in the price of Ricardo values […]
How I build and manage my share portfolio
The key thing to stress at the beginning and, as many of you will already be well aware, there are many ways to become a good investor. There are many different techniques, many different styles and strategies from fundamental analysis, technical analysis to even astrology and Biorhythms. It sounds like a cliché but the best […]
Screening For My Next Long-Term Winner: Somero Enterprises
How did your portfolio fare during 2018? If you managed to side-step the market falls, very well done. For the rest of us — including me — I guess we can only cross our fingers and hope the FTSE performs a lot better during 2019! Still, with share prices in the doldrums and many investors […]
A SharePad for every occasion
Richard takes a break from company analysis and reveals a new layout for news, and reflects on some of the other tweeks he has used this year to make SharePad even easier to use. Season’s greetings! As the New Year approaches even my enthusiasm for digging into financials wanes and I indulge myself – and not […]
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 […]
A Special SharePad Investigation: Patisserie Valerie
Before I go any further, let me just state that I am not here to say “I told you so”. But whenever I have lost money on a share, I have always found going back to see where I went wrong to be very instructive. In fact, trying to spot the warning signs from any […]
Screening For My Next Long-Term Winner: Mattioli Woods
Many years ago, one of my favourite sources for investment ideas was the Financial Times. However, the FT’s articles did not interest me, and nor did the Lex column. Instead, I studied a small table that was tucked away on those pages that listed every share price. You see, this table named the shares that […]
Searching SharePad for something special
Richard Beddard investigates DotDigital in SharePad. The data indicates it has been very prosperous since it floated on the London Stock Exchange in 2011. A surge in investment suggests it intends to keep things that way. The starting point for many of the ideas I discover in SharePad is a basic four stage process that […]
Screening For My Next Long-Term Winner: Warpaint London
I am always looking for shares that can double, triple, quadruple or more during the years ahead. And one good way of finding such great investments is to study shares that have, well, already doubled, tripled, quadrupled or more. Take Fever-Tree (LSE: FEVR). This tonic-water specialist has rewarded savvy investors handsomely since the firm floated […]
What really makes a great business?
To identify great businesses we must go beyond the numbers and understand what causes them. In this article I revisit 4Imprint, an investment I should have made in 2013, and a business probably still worthy of investment today. Back in May 2013 I wrote excitedly about a company selling promotional products to US companies. 4Imprint’s […]
Screening For My Next Long-Term Winner: Zytronic
Let me start with a confession: 2018 is fast becoming a year to forget for my portfolio. Suffice to say, my shares have suffered a further drubbing… and my annual return is now firmly entrenched in negative territory. I have to admit, those sizzling summer days of soaraway share prices now feel a long time […]
Evaluating a hot tip
Psst, company XYZ is going great guns, it’s shooting for the moon, get in before it is too late!!! In today’s article, Richard uses SharePad to evaluate Clipper Logistics, a tip he received anonymously on the Internet. Tips passed online are sometimes little more than ramps, invitations to boost the tipster’s wealth by buying shares […]
Screening For My Next Long-Term Winner: PayPoint
I don’t know about your shares, but my portfolio was thumped during this month’s market sell-off. The drubbing prompted me to consider whether I should remain invested in my racy growth stocks and contrarian recovery plays — or seek out some alternative opportunities instead. My latest SharePad trawling has therefore centred on dividends — which […]
When dull businesses come good
Stroll into a WH Smith and you might wonder why a shop that sells Sellotape, colouring books and slime (really!) exists today, but the company thrives. Smith’s creeping reinvention is an example to investors seeking to profit from businesses people casually write off because they see no future in them. Perhaps Computacenter is another. The […]
Screening For My Next Long-Term Winner: Character
My SharePad screening for buying opportunities has short-listed Character (LSE: CCT) as a possible longer-term investment. The attraction here is a quite extraordinary story about buybacks. You see, since 2006, this small-cap has bought back shares every year to reduce its overall share count by a huge 60%. What’s more, the purchases have been an […]
Filtering new issues
New issues have a reputation for delivering poor investment returns. In this article we filter SharePad for companies that may be more seasoned than they look. In my last article, I filtered SharePad for the firms that had been listed longest on the London Stock Exchange. Statistically speaking, the longer an investment has been listed […]
Screening For My Next Long-Term Winner: CMC Markets
In this article I continue my hunt for shares that could deliver market-beating returns… …and this time my SharePad system has identified CMC Markets (LSE: CMCX) as a potential longer-term investment. CMC is a high-margin, cash-rich and owner-run business that I believe could sit well within a diversified income portfolio — despite the firm’s earnings […]
The old ones are the good ones
Exciting news: Aston Martin is readying itself to float on the stock market. Investors should think twice though, before buying the shares. Typically, it is the most seasoned firms that make the best investments. This is how you can find them. The Aston Martin story has many of the hallmarks of a big flotation. The […]
Screening for my next long-term winner: Ramsdens
I am always hunting for great shares that could power ahead of the market during the years to come… …and just few days ago, my SharePad set-up pinpointed Ramsdens (LSE: RFX) as a contender for my long-term portfolio. Ramsdens is a small-cap that boasts cash-rich accounts, a seasoned chief exec, respectable prospects, and a rather […]
Building a base filter
To demonstrate how to filter in SharePad, we’ll build a base filter that filters out the shares we are least likely to be interested in. Our criteria will be personal, but the filtering technique can be applied to almost any investment style. Establishing your sweet spot To exclude shares we don’t want, we must decide […]
The perils of filtering stocks
This is the second article in the series “From ideas to investments” in which I look at the process of finding and evaluating investment ideas. Fishing for stocks using filtering, or stock screening, is a quick way to create a shortlist of shares that are likely to perform well – but only if we buy […]
How the stock market actually works
Today’s article is the first in a new series called ‘From ideas to investments’ which takes an in-depth look at how to generate investment ideas from fundamental data and develop those ideas into profitable investments. We’ll be looking at the benefits and pitfalls of stock screening and subsequent steps in developing a unique style incorporating […]
Motorpoint: A car dealer that stands out from the crowd
Financial statistics from SharePad and non-financial data from the company itself all indicate Motorpoint is no ordinary car dealer. If you’ve bought a vehicle from the company, or read its annual reports, you’ll probably know why. My article on Electrocomponents showed how I find most of my investing ideas with the simplest of SharePad filters, […]
Next – A closer look at its online business
For many years Next has been a very profitable retailer of clothes and homewares. Like most of its peers it has had to face up to the changing world of shopping that has led more people to buy stuff over the internet instead of from shops on the high streets or in retail parks. Profits […]
Stock Watch – Portmeirion
Portmeirion Group is based in Stoke on Trent and is a leading maker of homeware products such as tableware, cookware, placemats, candles and fragrances. It trades under some well-known brand names such as Portmeirion, Royal Worcester, Pimpernel, Spode and Wax Lyrical. Around half its products are manufactured at its own site in Stoke on Trent […]
Hunting in a sea of pessimism
Buying shares that are out of favour is a favourite strategy amongst contrarian value investors. However, in recent times it is not one that has worked particularly well. In fact, much more success seems to have been had with momentum strategies. These involve buying shares that are very popular and, in many cases, have been […]
When bad companies become good: IG Design
IG Design, formerly International Greetings, is one of my biggest investment mistakes—even though I made a few quid on it. Since I sold my shares in International Greetings—as it was called then—in April 2014, the company’s share price has risen from 71p to nearly £5.00. Clearly I misjudged the prospects of the business and that […]
Stock Watch: Morrisons – Is a bad business turning itself into a reasonable one?
Ten years ago, Morrisons was doing reasonably well. Under the leadership of Dutchman Marc Bolland it was wooing customers with a very simple and powerful strategy – offering good food at low prices. When he left to run Marks & Spencer, the supermarket industry was beginning to change and the company lost its way. It […]
Avoiding bad shares is just as important as picking good ones
If you’ve been investing in individual shares for a while then you’ve probably gone through the experience of losing some money on one or more of them. It’s a horrible feeling that happens to the best investors. You’d rather it hadn’t happened but the lessons you can learn from it can be invaluable in making […]
Stock Watch: Hill & Smith Holdings
Shares in Hill & Smith Holdings (LSE:HILS) have been a very solid investment in recent years. The company’s strategy of focusing on niche infrastructure markets with significant regulation and health and safety characteristics has seen its businesses grow and become increasingly profitable. Total returns to shareholders have increased by 258% over the last five years. […]
Face-off: Tenpin versus Hollywood Bowl
Tenpin bowling chains are like London buses. You wait around for years and then two of them list almost at the same time. Phil Oakley has already reviewed the UK’s biggest operator, Hollywood Bowl, but there’s more to be learned from the number two. Private equity owners of companies tend to list them on the […]
Stock Watch: Superdry
Superdry wants to create a global lifestyle brand by selling premium, high quality and affordable clothing to people. Its brand may not be as recognisable as leading sportswear brands such as Nike or outdoor brands such as North Face but its distinctive logos with Americana and Japanese graphics are not an uncommon sight. Superdry is […]
First steps to an inheritance tax-exempt portfolio
Investing in AIM-listed shares can help you reduce inheritance tax but you have to be picky. Not all shares qualify, and they must be good investments too. As usual, SharePad can help narrow down the field. What is an IHT-exempt portfolio? People with large estates can reduce the inheritance tax bill when they die by […]
Buying quality on its own is no guarantee of success
There are many different ways to make money from the stock market. Over the last few years, one of the most popular and discussed strategies has been about buying the shares of high quality businesses or quality investing. Warren Buffett has long been a cheerleader for long-term investing in quality companies. In the UK, the […]
Stock Watch: InterContinental Hotels
Disclosure: At the time of writing I own shares in InterContinental Hotels. InterContinental Hotels (IHG) can trace its roots back to the Bass brewing company. Bass, long known for its ales set about turning itself into a leisure conglomerate with pubs, Gala Bingo, Coral bookmakers and hotels. In 2000, the company sold its brewing business […]
A new issue that is already a winner
Looking through the prisms of profitability, debt, cash flow, strategy and valuation, Strix may be an exception to the rule that new issues make bad investments. Finance professor Elroy Dimson and his colleagues made a startling find when they studied the long term returns of UK Initial Public Offerings between 1980 and 2014. The longer […]
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 […]
AGMs – If in doubt, ask
Most companies will answer questions from shareholders and potential shareholders. At Annual General Meetings shareholders have a right to ask questions and get answers. A large proportion of listed companies report full-year results in late winter and spring because their financial year-ends coincide with the end of the calendar year in December. As surely as […]
Stock Watch: Cranswick
Cranswick is a UK-based food producer. It specialises in the production and selling of pork and poultry products. The sales mix of its business is as follows: Fresh Pork (34% of sales) – Cranswick is the third largest pig producer in the UK. Its own herd of outdoor reared pigs provides 18% of its own […]
Should investors avoid low margin companies?
Highly profitable companies can make outstanding long-term investments. Arguably, the best way to measure a company’s profitability is to compare its profits with the amount of money invested to make them. This is known as the return on investment or return on capital employed (ROCE). One person’s definition of a highly profitable business will differ […]
Putting performance in perspective
To get a grip on where a company is going you have to understand where it has come from. Fortunately, that doesn’t mean reading every annual report. Usually, it’s not enough to read the latest annual report. To understand a firm’s business model and strategy, how it makes money, how it plans to make more, […]
