Since things are getting exciting on the market front, I thought I’d join in with some of my own amateur ramblings.
Well, it’s the beginning of the month, so it’s time to take a look at my personal portfolio and sort the wheat from the chaff, the lions from the donkeys, the iPhone 11 Pros from the Nokia 3.1. Not that I know much about phones, of course. My own mobile is the dumbest there is: a nice cheap Tesco one costing me about two quid. I’m on PAYG on account of the fact that I rarely use mobiles.
I try to keep my portfolio transactions to a minimum these days. I probably won’t be consistent in reporting them, but I felt I had something to say today, so I might well as include them.
So, investment company 3i (III) gets the boot today. It’s got a Stockopedia StockRank (TM) of 64, and doesn’t pass any screens. However, it on a PE of 7.6, and yields 3.4%. The debt situation looks OK, to. So I don’t think this is a bad company, not by a long-shot. It seems a perfectly fine company. If you hold it, and are happy with it, then I think it’s a perfectly fine choice.
I chose NXR (Norcros) because it ticks a lot more boxes for me. It has a StockRank of 94, and it is one of their Screen of Screens picks. It has a PE of 7.9, and yields 3.4%. It also has a P/FCF of 6.3, which further piqued my interest. It makes taps, tiles, adhesives and other bathroom and kitchen accessories. A nice boring company!
It was part of my Stockopedia stockpick challenge, so I thought it was only fitting to put my money where my mouth was. A own a couple of other picks in the challenge, so I might end up owning them all by the year end at this rate.
III has been a nice little performer for me, allowing me to bank a profit of 58% (excluding divvies, including transaction charges) since I held it from Feb 2017. I have nothing to complain about the returns I generated there. Others may find it lacklustre, and have undoubtedly done much better, but I’m not trying to shoot the lights out here, I’m more modest than that.
If you’ve read my other posts from December you will have noted that I’m 50/50 on the way things will pan out for the markets. After an absolutely cracking December, I thought we’d be due for a pullback in January. Markets are “about average” in the UK, so there’s no telling which way things will go for the year. Perhaps there is a pot of money that had been sitting on the sidelines, and foreign investors have been waiting to pile in. The whole Brexit thing might have given them the green light. This is pure speculation on my part. We shall see.
Although I don’t see UK markets as a “screaming buy”, there does seem quite a lot of sensible stuff out there at reasonable prices. This should give some cautious optimism for the year ahead.
Paul Scott, over on Stockopedia, says he sees good value in small caps. Perhaps we are due for a revival in small cap value, what with the striping markdowns that we have seen over the last year or so. Paul Scott writes the SCVR (Small Cap Value Report). One of his most popular articles is one he wrote at the end of 2019. He details the ups and downs of his investing career. It is a fascinating read. He also has a Fantasy Fund, which has outperformed the Footsie immensely. Viewing the fund may be tricky, as it depends on various settings that Stockopedia has. Although the performance is good, it’s not for the faint of heart. There have been some colossal drawdowns, and even Paul himself has been phased by its volatile nature.
I’m not keen on the US markets, though. On a CAPE of 30 (according to StarCapital), it seems certainly “high enough” to me.
Emerging Europe looks fairly attractive to me. I’ve owned BEE (Baring Emerging Europe) since October 2016. It’s up 39% since purchase. Maybe not especially great, but I could imagine worse.
I still like Russia very much. Obviously, I’ve held JRS (JPMorgan Russian Securities) since December 2015. I’m up 119% on that so far. Pretty good, although its performance has been one of fits and starts. I bought during the kerfuffle between Russia and Turkey. The shares did continue to go down for a couple of weeks after I bought, but I am more than happy with the result so far. You can never time the exact bottom.
Keeping with the theme of investment trusts and global markets ..
ELTA (Electra Private Equity) crossed my radar a couple of days ago. They are in the process of winding down the trust. So, I’m expecting the share price to go to 0p in the space of 2 to 3 years, but with scads of special dividends in the process. It trades at substantial discount. So, maybe we’re looking at a return of 40% over 2-3 years. Definitely an acceptable return, in my books. But I think the news is even better than that. The directors seem confident that they will realise assets in excess of NAV, so I think shareholders could do well out of this.
OK, that wasn’t about global markets, but here’s one that is …
According to Ceicdata, the Hong Kong markets are on a PE of 11.4, no doubt because of all the upset over there. This makes me bullish, even though the market has been cheaper over the last decade. I’ve also kept my eye on Singapore, which is a developed market, and on a PE of about 14 with a CAPE of 13.9. I’ve seen it cheaper over the last few years, but it still looks reasonable value.
So a combination of shares weighted towards Hong Kong and Singapore is interesting to me. I did some cursory scouting around, and the heaviest weightings to these countries seems to be SOI (Schroder Oriental Income). It has 20% in Singapore, and 12% in Hong Kong. It pays a nice divvie, too. In the end, I wasn’t convinced enough to go for it, but I don’t think the trust will do badly.
Well, that’s about all I can think to say for now.Have a happy and prosperous new year.
Stay safe out there.