12 for 2012

At the end of last year, I posted 6 (not 12) http://is.gd/rJjgBR share selections. My share selections were: AFF, BLSA (short), DNO, DPH, MRW, OPTS.

How did they do? Not well! I called BLSA correctly, which I said was a bankruptcy candidate. It did, indeed, fail. Its stores were taken over by JD Sports.

I’ll ignore my BLSA, and just concentrate on my long picks, the performance of which in percentage terms over 6 months is as follows: AFF -20.8, DNO 3.4, DPH -4.3, MRW -17.9, OPTS -8.3. That’s an average of -9.6%, compared with the ASX (All-Share) of +1.3%. Distinctly unimpressive!

I hold all the shares listed above, except for BLSA and AFF. Let’s look at each of the companies in turn:

AFF – Afferro Mining – I ditched out of, as I was nervous of resources, and perhaps more significantly, I felt they had “too many” resources. That might seem like an odd complaint, but remember, it’s a question of having the capital resources to exploit them. AFF is a long way from production, although it does have money from which to continue its operations. Last I heard, cash is greater than its market cap. I’m torn on this one. Maybe it’s a great miner in the early stages, which has a long way to go to being a proper producer. A scarier scenario is that a lot of dilution will occur along the way to being a full-scale producer. I am concerned that the bulls are too focussed on what fantastic resources AFF has, and not focussed enough on what will really be required to exploit them. I don’t know. AFF will either turn out to be a fantastic investment over the long term, or it wont. I don’t know which, though.

DNO – Domino Printing Sciences – nothing much to report here. Performance has been about in line with the ASX. Its half-year revenues for 6 m/e 30-Apr-2012 were down 3% against comparables, and it reported the following highlights:

  • Difficult trading conditions globally delaying customers’ investment decisions
  • Growth in Laser, TTO and digital label press sales
  • After market sales represent 60 per cent of total revenues
  • Double digit growth in USA
  • Completed two acquisitions in June
  • Interim dividend increased by 10 per cent to 7.24 pence

So, some good, some bad. Currently trading at a PER of 14.7, it’s still a solid company as ever, just no fireworks is all.

DPH – Dechra Pharma – they sell vet medicines.  The company had a rights issue earlier this year, so the share price performance is likely to have beaten, rather than lagged, the ASX if you properly adjust for the rights. I’m too lazy to do that, though. As it happened, I didn’t take up the rights, and was happy to sell them on, as I’m not keen on too many acquisitions. DPH is currently on a PER of 13.3, an analyst forecasts look good. Should be OK as a share.

MRW – Morrison – the supermarkets. Down 17.9% over 6 months. Who would have thought that?  Of course, we all know the reason – the Tesco effect. Supermarkets are in the doghouse at the moment, and at quite cheap levels. MRW is on a PER of 10.1. analysts are expecting double-digit growth out of MRW, and I’d say that MRW offers very good value at current levels. I think all the supermarkets offer great value at the moment, and rather than say that MRW is “the best”, I think an investor could choose whatever supermarket they liked best. I own MRW and TSCO – Morrisons because I already owned it, and TSCO because I picked it up after the Jan announcement. I don’t own SBRY, I’ve got enough supermarkets just now, but if youlike SBRY, then I see nothing wrong with it. 

OPTS – Optos  – they make eye scanners – again, nothing major to report. They have a Piotroski score of 8, for those interested. They trade on a PER of 12.7. In their interim report issued in May, they reported “Increased Underlying Revenues and Profits whilst Investing Significantly in Future Growth”. They reported like-for-like revenues up 11%, with overall revenues up 49%. Their new “Daytona” has a strong orders, manufacturing is ramping up, and they are receiving excellent customer feedback. Very positive developments, I think. It’s easy to get discouraged by the share price action, thinking that one has selected a dog, but upon reading the latest RNS again, I’m actually quite excited about this company.

I hope your portfolio is doing better than mine.  

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About mcturra2000

Computer programmer living in Scotland.
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One Response to 12 for 2012

  1. Pingback: Market Musings 5/7/2012 « Philip O'Sullivan's Market Musings

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