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We’ve reached the end of a fairly volatile quarter, so I thought I’d review where the shares I’ve written about in my Newsletters have got to. On the whole I’m quite pleased.
Overall portfolio performances have been helped by a rocketing Caledonian Trust which has doubled in recent months as Mr Market starts to recognise the value hidden in its balance sheet – it took four and half years for him to get there!
In the tables below I present the returns after taking the hit on broker costs, stamp duty and bid/offer spread.
You can read the Newsletters I wrote at the time of purchase to gain an idea of the logic behind the decision.
(Some of you have joined us recently so, in case you are not familiar with them, I briefly describe the criteria for my portfolios following the portfolio performance tables.)
The 2013 NCAV portfolio
| Company | Purchase date | Purchase price | Divs to 31 March 2018 | Price 31 March 2018 | Return to 31 March 2018 |
| French Con. | 25.7.13 | £0.3047 | zero | Sold July 2015 £0.4378 | 44% |
| Caledonian T | 25.7.13 | £0.70 | zero | £2.30 | 229% |
| Fletcher King | 6.8.13 | £0.30 | 14.25p | Sold June 2016 for 46p | 101% |
| Northamber | 22.8.13 | £0.287 | 1.6p | Sold Oct 2016 £0.303 | 11% |
| Titon | 5.9.13 | £0.379 | 6.5p | Sold May 2016 £1.06 | 197% |
| Mallett | 12.11.13 | £0.7682 | 12.7p | Sold Nov 2014 £0.60 | -5% |
| AVERAGE | 96% |
The 2014 NCAV portfolio
| Company | Purchase date | Purchase price | Divs to 31 March 2018 | Price 31 March 2018 | Return to 31 March 2018 |
| Holders Tech | 10.10.14 & 3.11.14 | £0.47 | 1p | Sold March 2017 £0.33 | -28% |
| Airea | 4.11.14 | £0.1195 | 0.9p | Sold Sept 2016 £0.309 | 166% |
| Northamber | 17.11.14 | £0.4265 | 0.7p | Sold Oct 2016 £0.303 | -27% |
| Caledonian T | 30.12.14 | £1.39 | zero | £2.30 | 65% |
| AVERAGE | 44% |
The 2015 NCAV portfolio
| Company | Purchase date | Purchase price | Divs to 31 March 2018 | Price 31 March 2018 | Return to 31 March 2018 |
| PV Crystalox | 15.1.15 | £0.122 | zero | Sold Dec 2016 £0.237 | 94% |
| Arden Partners | 1.9.15 | £0.422 | zero | £0.52 | 23% |
| Northamber | 4.9.15 | £0.443 | 0.4p | Sold Dec 2016 £0.303 | -31% |
| AVERAGE | 29% |
The Buffett-style portfolio
This type of share is rarer than the others, and so I will combine all years. Unfortunately I have only one company so far – I’m working on it though.
| Company | Purchase date | Purchase price | Divs to 31 March 2018 | Price 31 March 2018 | Return to 31 March 2018 |
| Dewhurst | 9.4.14 | £3.18 | 45p | £6.00 | 103% |
| AVERAGE | 103% |
(I bought some more of Dewhurst in June 2014 at £3.11, December 2014 at £3.75 and November 2017 at £5.46).
Modified price earnings ratio portfolio 2015/16
| Company | Purchase date | Purchase price | Divs to 31 March 2018 | Price 31 March 2018 | Return to 31 March 2018 |
| Haynes | 11.2.15 | £1.159 | 22.5p | £2.30 | 118% |
| AGA | 11.3.15 | £1.002 | zero | Taken over Jun 2015 £1.456 | 45% |
| Hogg Robinson | 10.4.15 | £0.4709 | 2.37p | Sold Jun 2016 £0.656 | 44% |
| MS International | 3.7.15 | £1.86 | 19.25p | £1.80 | 7% |
| BHP Billiton | 24.9.15 | £10.43 | 127p | £14.07 | 57% |
| TClarke | 5.11.15 | £0.7916 | 6.3p | £0.8106 | 10% |
| Premier Farnell | 8.4.16 | £1.222 | 3.6p | Taken over 20.6.16 £1.632 | 36% |
| AVERAGE | 45% |
The AGA holding was doubled 30 April at a price of £0.9466.
Modified price earnings ratio portfolio 2017
| Company | Purchase date | Purchase price | Divs to 31 March 2018 | Price 31 March 2018 | Return to 31 March 2018 |
| Braemar | 28.6.17 | £2.848 | 10p | £2.52 | -8% |
| BHP | 2.8.17 | £13.69 | 72.4p | £14.07 | 8% |
| Caffyns | 10.8.17 | £5.012 | 7.5p | £4.00 | -19% |
| Connect | 27.9.17 | £1.046 | 6.7p | £0.563 | -40% |
| MS Intern | 14.11.17 | £1.84 | 1.75p | £1.80 | -1% |
| AVERAGE | -12% |
The return reversal portfolio
| Purchase date | Purchase price | Divs to 31 March 2018 | Price 31 March 2018 | Return to 31 March 2018 | |
| Havelock Europa | 20.5.15 | £0.14609 | zero | Sold Dec 2016 £0.0915 | -37% |
| AVERAGE | -37% |
The 2017/18 NCAV portfolio
| Purchase date | Purchase price | Divs to 31 March 2018 | Price 31 March 2018 | Return to 31 March 2018 | |
| Caledonian T | 7.11.17 | £1.23 | zero | £2.30 | 87% |
| AVERAGE | 87% |
Brief description of criteria for the portfolios
Shares are allocated to portfolios designed around ideas flowing from research conducted over many years when my PhD students and I asked the question “what works in investment?”
These investigations were often inspired by the ideas of great investors such as Benjamin Graham.
More detail on these ideas is presented in earlier posts (if you put key words into the search box those Newsletters will appear).
Net current asset value, NCAV, criteria
- Current asset values are taken from the balance sheet (e.g. inventory, receivables and cash). From this total are deducted all the liabilities. Long term asset values are usually ignored (counted as zero). Usually, further deductions are made to reduce inventory and receivable values to give a conservative bias.
- Companies passing the quantitative test are also assessed qualitatively for business prospects, managerial ability/integrity and business stability.
Modified price earnings ratio criteria
- A cyclically-adjusted price to earnings ratio (CAPE) significantly below average. That is, a current share price divided by the earnings per share calculated as an average of eps over the last seven to ten years.
- A high Piotroski score. These nine factors indicate whether a company is strengthening its financial position and income flow.
- Finally, and crucially, the same qualitative criteria as for NCAV investing.
Buffett-style criteria
- A strong economic franchise,
- Managers of integrity and talent,
- Excellent accounting numbers, and
- A reasonable price.
(There is much more on this in my books The Financial Times Guide to Value Investing or The Great Investors or Warren Buffett’s letters)
Return reversal
- Rank all shares based on their returns over the past five years. Select only the worst 20% of performers – “the losers”.
- Examine each loser share using Piotroski criteria. Select only those with a high score.
- Ensure that the company has a market capitalisation below its net tangible asset value
Use the same qualitative screening criteria as for NCAV investing…………..
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