BLNX followup

Six months ago, I wrote (http://is.gd/hWropz) that whilst BLNX was a Magic Formula stock, it should be avoided: ” despite the PE of 7, this one’s going down. Avoid.”

Six months is, perhaps, too short a time to determine if any theory is good, but I’m pleased to see that it at looks like I was on the right lines. Its shares are only up 1.7% over size months, as opposed to 10.8% for the Footsie.

Paul Scott, on Stockopedia, saw both positive and negatives, but seemed heavily weighted torwards negatives. Edmund Shing was bullish. I respect both posters highly.

For my money, though, I thought there were a number of red flags. It’s an AIM company, all the directors had foreign-sounding names, returns on capital were low, lots of stock was issued with little value creation for shareholders, and the company seemed uncessarily awash with cash. Also, supposedly great growth companies should not trading on single-digit PE ratios. It is ground for suspicion.

I notice that TTM figures reported on Stockopedia now show BLNX in loss. So that cheap PE turned out to be illusory.

I see that on April 16 BLNX completed its acquisition of All Media Network. The market reacted very positively. I remain unconvinced. Not all acquisitions add value. Most probably do not.

My opinion: you may make money on this stock, you may not. In my mind, though, it’s uninvestable.

Posted in Uncategorized | Leave a comment

Bash script for selecting tmux session

Problem

You want to list and select from several available tmux sessions

Solution

If necessary, install iselect:

sudo apt-get install iselect

Create an executable script called tsel:

#!/usr/bin/env bash

CHOICE=`tmux ls | iselect -a`
[[ ${#CHOICE} == 0 ]] && exit 0 # Just exit if nothing selected

SESS=${CHOICE/:*/}
tmux att -t "$SESS"

Obviously, the script must be stored somewhere on your $PATH.

Discussion

iselect is a tool that has many uses. It takes in a list of items, and displays them in a console as a menu. The user can then select one of those items, which is printed out. In the script above, CHOICE is set to the user’s selection of tmux sessions.

The script just exits if the length of the choice is 0. This can happen if the user types q to quit iselect.

tmux ls has output in the form of the session name, followed by a colon, followed by other information. The script needs just the session name, and needs to discard all of the other output. This is achieved using bash’s pattern-matching facilities:

SESS=${CHOICE/:*/}

At this stage, the script has the session name in its pure form. This session name is passed to tmux’s attach command.

Posted in Computers | Tagged , , , , | Leave a comment

Magic Hat portfolio: RM stays in

My Magic Hat fantasy fund is on Stockopedia:
http://www.stockopedia.com/fantasy-funds/magic-hat-463/
It is trailing the FTSE 350 over 1, 3 and 5 years, which is something I clearly didn’t want to happen.

The best performer so far is DTG (Dart Group), which has received considerable publicity on Stockopedia. INDV (Indivior) is another stock that is doing very well, despite the known clouds hanging over it. It’s StockRank is 99, and it scores highly on all the dimensions of value, quality and momentum. It also passes the screen of screens, including the Greenblatt Magic Formula screen. It is on an EV/EBITDA of 4.47, which is very low. What has turned everyone off this stock is the prospect of declining revenues. Despite the clear negatives on fundamentals, the stock has actually performed very well.

There are more than enough detractors in the portfolio. NPT is down 32%, and HNT is down 23%. Unfortunately, they were picked up by the fund before their steep declines in share prices. SHOS (Sears Hometown) was a foray into the world of net-nets. It’s something that you don’t see very often. Unfortunately, the shares are down 40% since purchasing, which is a clear disappointment.

RM was due to be kicked out of the portfolio this month, but seeings at it still qualifies for the Greenblatt screen, I’ll make no changes to the portfolio. The shares are down 6% since purchase, which is disappointing, but no disaster. It’s on a PE of 9.5 and an EV/EBITDA of 3.6. Earnings are expected to increase. So it looks in good shape, fingers crossed.

I wish you all well.

Posted in Uncategorized | Leave a comment

Searching for spinoffs

There was a fair amount of interest for my recent post about spinoffs.

An excellent resource for recent and upcoming spinoffs is StockSpinoffs: http://www.stockspinoffs.com/recent-spinoffs/

The recent ones look a little out-date, but it is still a site that is maintained actively.

You can search Edgar, the US Securities and Exchange Commission, for 10-12B(/A) forms:
http://www.sec.gov/cgi-bin/srch-edgar?text=form-type+%3D+10-12b+OR+form-type%3D10-12b%2Fa&first=2015&last=2015 (equivalently: http://is.gd/WaqOgb)

Form 10-12B is a registration statement that companies must file when they issue new stock in a spinoff. Sometimes information is missing, like the date of the spinoff. Forms 10-12B/A are ammendments to forms, which may fill in some of the blanks.

One last tip: you may want to copy the RSS Feed link into whatever software you use for reading feeds. That way, you can stay up-tp-date with the latest developments.

All resources listed in this article are free.

Posted in Uncategorized | Leave a comment

Portfolio review

With another tax year under our belt, it’s time to pause for reflection, assess what we’ve learnt about investing, and hopefully boast about how our smarts led us to bag some big winners.

Unfortunately, I have nothing to boast about this year. My portfolio was down 6.2% during the (tax) year, compared to a positive return of 2.8% for the ASX (FTSE All-Share). I therefore lagged the the index by around 9%, a truly pitiful performance. I haven’t underperformed that bad since the 90’s.

What went badly?

  • Story stocks – specifically, an investment in PLE (Plethora), pharma company aimed at tackling premature ejaculation. I was convinced it was onto something big (no pun intended!), and in late stage development. Alas, so far it has turned out to be a typical AIM serial disappointer. The only saving grace is that it was only a small part of my portfolio, and I am hoping it will still come good. Try not to read too many double entendres into that. I should have followed Lynch’s advice: wait until a company turns a profit before investing
  • Catching falling knives. “It can’t possibly get any cheaper” has been the siren call that has lured me onto the rocks. Buying into miners was the main culprit. Buying companies that are of only mediocre cheapness was not a good idea. I bought NPT (Netplay) and SAL (SpaceandPeople) before their big fall.

I think, if you’re going to buy value stocks, you really need to buy them in deep discount territory. Buying them when they’re “merely OK” does not seem a particularly good strategy.

I am underwater in miner KAZ (KAZ Minerals), having bought in at 303p in June 2014. Price declines followed, and I bought again in January 2015 at 180p. The price has recovered to 220p at the time of writing. So buying cheap might work, or it might not.

LMI (Lonmin) has been another disappointing buy on my part. I’m down 31% on that one. It’s now on a PBV of 0.37, and I’m holding on because I think it represents good value. It’s loss-making, and the PBV is the lowest it’s been for a decade. The pain is possibly not yet over. GLEN (Glencore) has a big stake in LMI, which it plans to distribute to its shareholders later this year. There is therefore a major overhang on this stock, and I expect a major dumping of the shares when the distribution is made. I plan to buy more if things work out as I expect.

It’s painful, terribly painful, to watch your hard-earned disappear down the bowl. I am not an advocate of “chasing” stocks, and I generally discourage “averaging down”. There’s no point compounding one mistake with another. However, I think sometimes you can make an exception, and I’m willing to take a gamble that my logic is correct on this share. No guarantees, of course, but sometimes you can only do what you feel is right.

That’s the bad news. Now what about the good news?

I think momentum worked well for me. Buying quality growth shares at reasonable prices also worked well. That seems to be a category that has worked consistently well for me. Perhaps that’s something I should concentrate more on.

My shares in restaurant chain PRZ (Prezzo) were taken over, at a price that I feel were somewhat underbid. I had a great run from PRZ, and I think that shareholders can do well if they can find shares of similar quality.

Spinoffs. Encouraged by re-reading Greenblatt’s book, “You can be a stock market genius”, I decided that it was time to actually try my hand at it. It is too early to draw any firm conclusions, but my preliminary finding so far is: they’re awesome. I had been put off by the fact that most of the companies are US quoted. I decided to put my discomfort aside, and invest in a few that I thought were promising. So far, I haven’t regretted it.

I am happy with the performance of all my spinoffs so far, and it’s certainly looking like one area that a value investor can specialise in where there’s not much competition. I won’t go into any detail about what to look for (pfft, as if I really knew, anyway), that is more amply covered in Greenblatt’s book. Based on what I’ve seen, Greenblatt’s book deserves to be counted as one of the most important books on investing ever written, perhaps second only to Ben Graham’s Intelligent Investor.

General thing to look for include a disparity in size between the parent and the spinoff, growth at a reasonable price, or good value. There are other things, too.

My best performers in the spinoff area are the ones that look like you shouldn’t touch with a bargepole. I’ll mention pharma company IRV (Indivior). It manufactures drug for the treatment of addictions, and the big worry is its drugs coming off patent. It’s up 32% since I bought it in January.

Another great performer is CRC (California Resources), an independent oil and gas explorer. Now, the share price has hardly been smooth, and in fact had been in steep decline after about a month of it spinning off. By luck, rather than judgement, I didn’t buy at the outset. In January, I figured it was cheap, so I decided to buy some. It’s up 63% since then. Pretty good considering that “everybody knows” that oil is dead.

All my spinoffs are in profit – a stark contrast to the rest of my portfolio.

Again, it’s too early to draw any conclusions. The markets are a little crazy right now, so it’s difficult to know how long the good times will keep on rolling. But I’m hoping that I can hold the spinoffs for around 3 years without losing patience, or underperforming the market.

There’s one thing I would like to emphasise about spinoffs: it does, perhaps, requires a certain tolerance of ambiguity. Value investors tend to be intellectually rigorous, adopt a wait-and-see approach approach, and like everything to be nailed down. With spinoffs, I don’t think all facts are known. You can get some idea of revenues, assets, and soforth, from press releases, and from company filings themselves. Don’t be afraid to “wing it” a little. They’ll often be things you don’t like; debt levels for instance. I think it’s an area which requires that you’re able to “take a view” rather than demand perfection.

So if you take away only one thing from this post, it’s this: spinoffs are well worth a look, and you should read Greenblatt’s book.

Posted in Spinoff | Tagged , | Leave a comment

Car safety: aquaplaning

Aqualplaning occurs when rain causes a loss of traction between the tyres and the road whilst driving.

What to do: take your foot off the accelerator. You will then be able to regain control, and continue on your journey again.

Do NOT:

  • panic
  • try to counter steer
  • brake

Hope that helps.

Posted in Uncategorized | Leave a comment

Mr. Rusty in Milton Keynes

I was talking in the office earlier about Mr. Rusty and some of his amazing adventures. I’ve known Russell since university, and I thought I’d share some pics of him, as promised, from the 80’s. We had left university, I was working as a trainee accountant, and he was living in Milton Keynes. Some say Milton Keynes is the city of the future, and others say it was a poxy hole. Who’s right? You decide!

Here’s the man himself:

1990-30

and with his brother:

1990-32

Here’s me in his garden, which is not the most embarassing picture of me:

1990-31

But this is:

1990-29

Do you like the way he has decorated his place?

That is actually a trick question. As far as I’m aware, he’s never decorated the place. That picture was left over from the previous owner. And he’s never knowingly spent any money on paint. The adjoining room is in the lounge, with a very old TV in it. I think I got my lifetime limit of radiation from watching that TV for only a couple of hours.

The lounge, though, is not nearly as bad as his kitchen, which is truly a site to behold:

1990-33

I can assure you that in reality the kitchen was in much worse condition than the picture seems to imply. His current kitchen is actually even worse. He offered to make me a coffee, but as I recall, I had to go to the nearest shop to actually buy it. The upside was that in those days his mugs still had handles on them.

After having had a tour of his house, we decided to go to some shopping mall so that I could have a ride on his scrambling bike:

1990-34

Russell kindly took a picture of me on my bike. I felt I was flying through the air, although the picture above looks less dramatic than that. This is the last picture he took:

1990-35

You can’t see it, but I had grazed my arm before taking that picture. I had actually come off the bike, and there was a big friction burn near my elbow. When I took a shower that night, I nearly fainted from the pain of washing the wound. Quite a big scab formed, which I kept for a few years as a souvenir.

All of the events in this blog are real, although they have been recounted in a funny way. I intend to send this link to Russell, who I ‘m still in contact with. Although this blog teases him, I hope he takes it in the good spirit it was intended.

A few years ago I had a chance encounter with Matthew Bowman, and we swapped a few Mr. Rusty stories. We joked about how one could write a book simply by writing down whatever it was Russell did with his life.

Russell. I love you, man. Seriously. You are my mate!

Posted in Uncategorized | Leave a comment