I thoroughly recommend using Stockopedia’s portfolio tools. You could, say, have a portfolio for stocks that you own, where you keep a track of their stock ranks, for example. I also have another portfolio for stocks that I am interested in. If I see a company that is of high quality, I’ll probably put it in that portfolio. I can then review it monthly, where I might look at the yield, ROCE, and soforth, and maybe decide that something is worth buying. It’s a very handy way of keeping track of potentially interesting shares.
One such share, for example, is HLMA (Halma), a company that has a good track record, and high returns on capital. Its yield is rather low at the moment, as it is rather toppy in terms of valuation. The shares look like they’ve been coming off the boil recently, so you never know, it may come down to a much better valuation level, and I’ll take the plunge. If the stock’s quality rank is in the 90’s, which HLMA is, I take that as a further good sign.
One of the dogs that I am tracking out of interest’s sake is WAND (WANDisco), that does stuff like “big data” and software repos. A director of the company disabused me of the notion that “it was just another Github”. Yeah, OK, but it hasn’t helped investors.
I wrote about the company in late-April, saying that I didn’t like the share. The share price was 252p then, and 107p now. Ouch! At least I can call some of them right! Sometimes it’s not difficult, though. It has a Stockopedia Stock Rank of 5; rather a strong warning. Its RS6m (6-month relative stength) is -46%. Shares that perform that badly require special caution.
WAND qualifies for two of Stockopedia’s shorting screens, and the bankruptcy risk arrow is in the extreme distress end. Oh dear! Even the most lackadasical glance at the cash flows reveals a big problem. It has cash outflows from operating activities of £13.6m, and it invested £9.5m last year. As revenues increase, so do the losses. The ending cash balance was £2.5m.
It seems pretty clear to me that investors will need to stomp up more capital if they want to keep the game going. As one poster on ADVFN writes
Stay short, they’ll soon run out of money and in this current economic climate will either have to be extremely heavily discounted, or they’ll just go bust!! The gift that keeps on giving! From hero to zero!
Sounds about right to me.