Investor John’s January

Hello again… This is just a few of my musings at the end of the month… as much for my benefit as yours. I can look back and see what I have been doing and it forces me to spot things that I might prefer to forget!

I’m writing this on the 31st of January 2020

None of this is advice or recommendations.

Month Summary

  • Number of Holdings 33
  • Calendar YTD +0.68%
  • Buy Trades 6 (3 Topups & 3 New Holdings)
  • Sell Trades 2
  • Shorts 1

Well that is January over! Maybe just as well as things have been getting a bit unsettled with this Corona virus outbreak which understandably is making investors nervous. The first case was today confirmed in the UK so hard to know at this stage how it will all pan out.

In general I haven’t let it affect my trading or my sentiment towards the market with one exception which is DTG Dart Group… I had included them in my Stockopedia share picking challenge with every intention of buying them in January at some point. This hasn’t worked out because they started the year with a strong rally and I considered them a little overpriced so I held off a bit. Now with this health scare I would hold off again in case people become increasingly reluctant to fly. If the outbreak looks like it becomes controllable or contained I would certainly consider looking at this again but for now they remain on my watchlist.

My month had been going well with a positive YTD up as high as 4% but unfortunately today my (formerly) largest holding Future Plc has been hit by a shorting attack. Hopefully this blows over and momentum continues in their growth. This fall on Future moves Belvoir to my Largest holding. I cant say anything against the shorters because I am currently short on 1 stock myself although it is painful at the time when a short attack takes place. I had to sell out of NMC Health in December last year for this very reason.

Mistakes/Sells…

I couldn’t help myself and bought more Card Factory before their trading update and had to sell the full holding the next day when the update wasn’t great, they announced no more Special Dividends and things didn’t look rosy. My hope was that their offering in ALDI my have been a bit of a boost at some point but anyway I took a loss on this trade, and CARD is now banned from my portfolio! I had been in and out of them over the last number of years and enjoyed a few good dividends.

FCCN French Connection I had bought a tiny holding 0.5% of Portfolio in this clothing retailer at the end of 2018, I think it was around the time that I had recently joined Stockopedia and I maybe had too much faith in some of the commentary on there. It was a bit of fun or a punt (slap on wrist!) that cost me half my original stake. Lesson learnt again.

Added to…

Ten Entertainment – added more here on positive price momentum and to me it still looks like good value compared to Hollywood Bowl. It also meets Jim Slater’s Zulu principles screen.

H&T – Topped up on the 9th on the back of strong update from RFX (another pawnbroker) which I think bodes well for HAT. This has proved to be the case and the price has rallied since their update on the 27th which said that the group expected full year PBT to be at the top end of Market Expectations. I am aware that they still have the FCA investigation ongoing so hoping all is well on that front.

New Buys…

Tatton Asset Management Plc

Tatton Asset Management provides on-platform only discretionary fund management, regulatory, compliance and business consulting services. They also offer mortgage provision, to Directly Authorised financial advisers across the UK.  I already own shares in Simply Biz SBIZ which is similar in some ways.

I have bought in here after careful consideration and studying their Interim results presentation available on their website here. This broadly passes a Slater Zulu screen with growing Assets under management. They have positive momentum and pay a 4% dividend yield. Insiders are confident here with the CEO holding almost 19% of the Company. Directors have been buying again in November a combined total of just over £0.5 million worth.

  • Stockopedia Stock rank is 78 out of 100
  • Forward PE 18.7
  • PEG(f) 1
  • EPS(f) 24.1%
  • Dividend Yield 4%
  • ROCE 40.1%
  • ROE 36.9%
  • Operating Margin 34.91%

Bought at £2.70

Reach Plc

Reach PLC – This is the old Trinity Mirror newspaper company. They are still producing newspapers but also pushing digital content now. The price and extremely low forward PE of 3.6 suggest that the market is pricing it for failure. Can it succeed? Reach could be a bit like Future PLC. Future Plc are taking magazines and publishing them and associated content online. If Reach can do the same I will be happy. Momentum has been positive for the last year now.

  • Stockopedia Stock rank is 96 out of 100
  • Forward PE 3.6
  • PEG(f) n/a
  • EPS(f) -5.1%
  • Dividend Yield 5.07%
  • ROCE 5.3%
  • ROE 6.5%
  • Operating Margin 8.77%

Hopefully it can gradually turn these metrics around.

Bought at £1.38

Codemasters Group Holdings PLC

Sitting pretty much at an all time high Codemasters Group Holdings should need no introduction to most of us. This car primarily Car racing game producer is my attempt to gain some exposure to the growing gaming market. I have looked at other names like Team 17 but went for Codemasters as my pick of the bunch.

With a PE under 20 and PEG of 0.6 they seem better value than the likes of TM17 on a PE of 39.5 and PEG of 5.8 hopefully they will gradually re rate if they can show growth in the months ahead.

They have a new game coming out in May called Fast & Furious Crossroads drawing on the popular Fast & Furious movies and starring Vin Diesel which should prove popular. Another growing revenue channel for them is their mobile versions of some of their games.

  • Stockopedia Stock rank is 71 out of 100
  • Forward PE 18.7
  • PEG(f) 0.6
  • EPS(f) 47.5%
  • Dividend Yield 0%
  • ROCE 36.2%
  • ROE 43.5%
  • Operating Margin 32.73%

Bought at £2.79

My short.

The fact is that I have almost never went short on anything but I had been watching Ted Baker and didn’t think things were going well especially since they didn’t update the market at all on their Christmas trading that to me said that they had nothing exciting to report. Being short since £3.84 has been a profitable venture so far with the price slowly dripping down to £2.23 today. I am a little cautious as I do think they have a good brand that someone might value but letting it run for now.

Thanks for reading and don’t be afraid to comment below with your thoughts! Explore the rest of my website and have a look at my current holdings! I will leave you with a quote from Warren Buffet…

Be fearful when others are greedy and be greedy when others are fearful…

Warren Buffet.

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Investor John

Investing as a Private investor John has shown success over the last 15 years with a straight forward common sense approach to investing - He can help you to learn and will gladly share his knowledge to get you started.

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