Magic Hat: PAY in, WIN out

The MHP (Magic Hat Portfolio) on Stockopedia (http://www.stockopedia.com/fantasy-funds/magic-hat-463/) is an experiment by me to see if a human can improve on a mechanical Greeblatt Magic Formula screen. I am trying to weed out “mistakes” that I feel the screening commits: unseasoned companies, scams, foreign companies (particularly Chinese), fishy accounting, and statistical quirks. Apart from that, I am agnostic as to the sector the company operates in, although I will try to avoid heavy concentration in any one sector. I will mostly apply “Strategic Ignorance”, by which I mean that I wont try to be clever in my stockpicking. My picking will be mostly mechanical. A summary of most of my Magic Hat articles can be found on the web page http://www.markcarter.me.uk/money/greenblatt.htm This will allow you to see, at a glance, what shares have been bought and sold in the past, as well as what shares have been rejected from consideration and why.

I was able to adjust the MHP portfolio on Stockopedia today, despite it being a bank holiday. By rights, I don’t think that should have been possible.

WIN (Wincanton) is ejected from the portfolio by rotation, having clocked up an 83% gain since its purchase in July 2014. Not bad at all. It still qualifies for Stockopedia’s Greenblatt Screen, but it has a rather poor overall StockRank: 56. I opted to replace it with PAY (Paypoint), which has a SR of 81.

That’s about it, really. Enjoy the rest of your bank holiday. I hear that the weather has been excellent in many parts of the UK. Unfortunately, it’s been rather dour up here in Scotland.

Stay safe.

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#ubuntu1804 and #gnome

I had been running the Artful Aardvark, and decided to upgrade to Bionic Beaver. I downloaded lubuntu, because I wanted a lighter-weight install, and I was ambivalent about Gnome.

After awhile with LXDE, I decided to install Ubuntu’s standard Gnome desktop.

A big dislike I had with Gnome is the “workflow”. If I am working on a development project, I like to have a large half-width vim session open on the left-hand side. On the right-hand side I will Firefox for reference purposes, and umpteen other terminals. These terminals are used for compiling, grepping, running unit tests, and ad hoc testing.

This creates a clutter of terminals, and it’s not easy to navigate to the right one if it is obscured by Firefox.

So my main gripes with Gnome are/were:
* poor support for complex layouts
* resource pig. My PC is fairly quiet. It is a small form-factor PC, with a tendency to be throttled at high CPU intensity. Gnome and Firefox seem the biggest consumer of resources, and I dislike hearing my fan whirling around as it tries to service these apps.

I would say that Gnome, and in particular Ubuntu’s styling, to be the best I have ever seen on any platform. The styling has come a long way from its monkey-excrement brown days. Windows XP/7 default scheme is not to my liking. However, it only takes a few short tweaks to make it look much more serviceable. I tried Windows 8 layout for a short while, and I have seen what Windows 10 looks like. Both are retrograde steps.

I have stopped using Macs in 2010. I bought one in 2007 (Tiger?). The styling, as you’d expect, was excellent. I upgraded the OS for free (Lion?). In some ways, the styling was better, and in some ways it was a little worse. It was gorgeous, but I think that in the final analysis, it was “overproduced”. Its failing was that it was “too” gorgeous, if that makes sense. The Macs typographical choices could have been better. Windows fonts tend to be dull, but serviceable.

To recapitulate, Windows XP/7 tend to be too saccharine out of the box, but they’re easily tamed into something dull, but working. Actually, dull but working is a good thing! Windows 8/10 … well … what were Microsoft thinking?

Gnome, as I have said, has the best aesthetics I have seen. I am glad that, FINALLY, someone gets desktop design. UI design is about a subtle combination of good looks and RESTRAINT.

The icon set of Gnome is appealing and the fonts are pleasant. Linux has traditionally been poor on fonts, and has been something that has bugged me for a long time. The fonts on Ubuntu are faultless.

One UI design that I like to see is the convention that active windows should have a distinctly darker title bar from inactive Windows. Nearly all window managers just don’t get this simple design right. Gnome is also remiss on this score.

Exploring LXDE, I find there’s a couple of things I miss from Gnome. I am exploring using LXTerminal on Gnome. This allows multiple tabs on the same terminal. This allows me to have the multiple subtasks that I need for carrying out development, but I can switch between two major terminal tasks using Win-`.

So I think I will stick with Gnome for awhile, and see how the combination suits me.

Perhaps using something like dwm is a good choice for me, too. I shall think about it.

Really good usability has yet to be cracked for complex tasks. One idea that I had was for multiple layouts. I do not mean virtual desktops. What I mean is the same windows laid out in multiple ways. You would then switch layouts for the subtask in hand.

Finally, a rant about Firefox and web designers. FFS, how can rendering web pages be so resource intensive? What is wrong with everyone? Can we not just keep poxy javascript to a minimum? Web pages should be mostly just text. OK, if you’re Youtube, you get a pass for resource usage and web complexity.

And here’s something that I think is poor design: web banners! Think about it, the top of web pages normally have large banners on them. So the most useful part of the page is covered by pictures that convey very little information. Sure, the page may look good, but I place emphasis on functionality over form.

Now, I’m off stop install an adblocker.

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AIR – down nearly 20%

Aviation services company AIR (Air partner) is getting hammered again today, I see. It is down 19.8% to 83p.

As early as March, it reached a share price of over 150p. The big drop is attributable to the year-end update issued on 3 April:

The Board of Air Partner has identified, during the course of its year-end review process, an issue predominantly relating to its accounting for receivables and deferred income. …

They quantify the amounts involved:

the Board presently understands that the cumulative amount … is approximately £3.3 million

The shares, obviously, dropped when the announcement was made, with a further fall today.

AIR is of particular interest to me, because it is a share that I have never owned, and in fact stood on the sidelines enviously as others made a packet out of this company.

Paul Scott commented about the over on Stockopedia on 3 April:

This seems to be saying that bad debts … were not written off through the P&L. Instead they were offset against a balance sheet creditor

He wavered in his opinion, but said:

Overall, my feeling is that share price drop of around 20% today looks about right. It’s very concerning that the company appears to be admitting today to having falsely accounted for bad debts, and hence boosted cumulative reported profits by £3.3m. … Based on today’s announcement, I don’t see any reason to panic.

It seems that news was expected today to update the market, although I do not see any official mention of it. So maybe that’s just speculation. Given that the time is now 4:17pm, all I can say that if there is news issued today, it will likely be atrocious.

Answers on a postcard.

I note that the company’s P/FCF is 8.5, and that it reports net cash. I am not a holder.

83p

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Magic Hat: SCS in, RM. out

The MHP (Magic Hat Portfolio) on Stockopedia (http://www.stockopedia.com/fantasy-funds/magic-hat-463/) is an experiment by me to see if a human can improve on a mechanical Greeblatt Magic Formula screen. I am trying to weed out “mistakes” that I feel the screening commits: unseasoned companies, scams, foreign companies (particularly Chinese), fishy accounting, and statistical quirks. Apart from that, I am agnostic as to the sector the company operates in, although I will try to avoid heavy concentration in any one sector. I will mostly apply “Strategic Ignorance”, by which I mean that I wont try to be clever in my stockpicking. My picking will be mostly mechanical. A summary of most of my Magic Hat articles can be found on the web page http://www.markcarter.me.uk/money/greenblatt.htm This will allow you to see, at a glance, what shares have been bought and sold in the past, as well as what shares have been rejected from consideration and why.

RM leaves the portfolio by rotation. It has a Stockopedia stock rank of 97, and passes four of their screens. If I held in my real-life portfolio, I would not be in any rush to ditch it.

Furniture company SCS enters the portfolio. It appears on the Greenblatt screen, has a stock rank of 99, price to free cashflow of 3.8, and net cash. Its EV/EBITDA is 1.5, which is extraordinarily low. After the fiasco that was DFS in the portfolio, there’s no way that I would be bold enough to say that this one can’t miss. Still, it looks a good bet. Let’s hope the whole economy doesn’t crash, or some-such.

The MHP has underperformed the FT350 over a 1 week and 1 month period, but has beaten it handsomely over longer timeframes. My personal portfolio seems to have taking a right caning this year, so let’s hope I’m not reduced to eating cold dogfood.

Stay safe out there.

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IAG looks like a buy to me

Prompted by a tweet from @wheeliedealer, I thought I’d add my tuppence worth: IAG (Int’l Consolidated Airlines) looks like a buy. P/FCF is around 6, yield is above 3%, and net debt is less than 3 times PBT. Its EV/EBITDA is 3.9. It also has a Stockopedia StockRank of 97, and a Piotroski score of 9.

It has quality (in terms of debt), value, and momentum.

Despite the fears that the bull market possibly ended at the beginning of the year, there does seem to be some reasonably-valued shares, even in the large-caps.

Of course, everything could hit the fan, the economy decline and the much-feared bear market materialise, but that’s the chance you take.

Let’s revisit this share in a year’s time.

I hold, FWIW, down 3.3% since I bought in Oct 2017.

596p. FTSE 6928

 

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SPRP. Sprue Aegis. Investing is hard

I see that SPRP, “one of Europe’s leading developers and suppliers of home safety products” tanked today, down 26% to 140p. The problems:

the Company is in breach of certain provisions … the breach is not curable and as such BRK is terminating the Distribution Agreement

and

the audited final results … will not now be announced in late March

Delayed publication of results is never a good sign, although under the circumstances, you hardly need me to tell you that.

The company is on a PE of 15.5 or 20.9, depending on which data source you choose to belief. Well, in light of the revelations, I’d say that this is due to a re-rating downwards, and the shares will be lower in a year’s time than they are now despite the clobbering it has just taken. I’ll make a note in my diary, and we’ll see who’s right: me, or Mr Market.

I seem to recall SPRP was a bit of a darling amongst investors much savvier than me. Mostly due to “Not Invented Here” syndrome more than any insight on my part, I never did invest in it.

Trawling through the archives on Stockopedia, I noticed an article dated 29 May 2014 (https://www.stockopedia.com/content/the-best-of-aim-the-worst-of-aim-83673/) that listed SPRP as amongst the best of AIM shares. The price was around 278p.

In Sep 2017, Graham gave the opinion:

it seems like a pretty reasonable holding and a decent-quality smallcap

The price was 210p at the time.
So be warned, stock ranks are for buying on a group basis, and the endorsement of knowledgeable investors is no guarantee. Let me emphasise that I have great respect for Graham’s ability, and I acknowledge him as a better investor than me.

Stay safe out there.

140p

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Delivery drones: surely the dumbest idea ever

The Los Angeles Times reported recently (http://www.latimes.com/business/technology/la-fi-tn-amazon-drone-patent-20180322-story.html):

> Amazon patents delivery drones that can react to people screaming and > flailing

Love it!

> As described in the patent, the machine could release the package it’s > carrying, change its flight path to avoid crashing, ask humans a > question or abort the delivery. Emergency Action Message: abort mission.

> If the drones are cleared to deliver, they can release boxes with > extra padding from the air, or they can land and then offer the > parcels, the patent said. How do you want your goods: one piece or two?

I don’t know who’s taking the biggest piss: LA Times or Amazon.

Delivery drones are so 2017. Or was it 2016? I am too bored to check.

What puzzles me is how supposedly sane and intelligent people can come out with ideas that are so obviously flawed. This is politician-level dumb.

Obvious flaws include: they are likely to have sufficient lift capacity, people will bait them if not use them for target practice, they are difficult to scale quantity-wise, they use up too much energy, there’s not distribution network, there’s no economies of scale to be had, and so on.

I see that Amazon have latched onto the whole “AI” bandwagon thing. I’m surprised they are heralding that in big six-foot letters.

Sometimes I feel like I must be taking crazy pills.

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