BeeBop does UK

[BeeBop]

Percy had suggested I start a thread on the UK market.


The UK has most of my sharemarket time at the moment. We do not have to consider tax implications as we live in the M.E, however, we have invested in the UK market for many many years, a good portion from when we were in our home country (NZ). I work via growing a portfolio and then "banking" some profits over a certain level back into my NZ property mortgages at favourable exchange rates (mostly).


Tips and ideas come from three main sources: iii dot co dot uk and its front page, Investor's Chronicle (podcasts, free reading and sometimes I buy their weekly e-magazine for coffee time reading), fool dot co dot uk plus many other links (FT dot come, Questor and some dubious sources. All buying and selling are through TD Waterhouse international (think they are being or have been bought by interactive investor). I only buy and sell once or maybe twice per quarter (to manage fees).


I use UK dot advfn dot com to get a lot of my first screen data and see the bulletin boards (iPad app is the best way for me as the site is not user friendly). For subsequent screens, as always, I go to the company financials.


Currently I have one disaster (BON) and one high flyer (TRI) plus around eight other holds. My historical straight-lined return p.a. is 18%. Current holding return for this calendar year is zero as BON.L has successfully and gradually eaten my gains. However, as I am not wanting to realise this loss and I think there will be a recovery, I am going to stubbornly hold on (paying a 4% yield on my purchase price and around an 8% yield on current value), if you want to take a risk on 50+ women’s retail, it may be worth looking at (80p now).


My requirements are for (generally): a low debt level, must pay a dividend of at least 2% (targeting 5%), a "regular" company (i.e. One that fits my metrics and I can get my brain around), price to sales less than 1.0, and a depressed PE ratio. Of course the usual quick and current ratio screens apply. If these metrics fit, I then apply the old CCVI and look for a level of above 15 (I like 25). CCVI = ((eps + dps)/ $sp)+((eps-dps)/$NTA or $BV).


Rather that go through historical reasons for buying etc, I shall merely put down my most recent purchase and the shares I am currently considering.


MANX.L : this is MANX Telecom and is domiciled in the Isle of Mann. It is held by a few high performing equity funds (James UK Equity Income Fund) and I like the Isle of Mann! First look on 3/11/16. PE = 13 and DY5.2%, CCVI = 17 (on the low side) and P:S up at 3.0 (too high for my liking) ROCE 10.3%. BUT they are new, were down from high when I bought, conservative with some really really good future plans. I dumped in my profits from UDG healthcare (ran from GBP4.60 up to GBP6.95 then sold as I had a bit too much overall in healthcare to turn this into a longer-term hold). I only bought a small value parcel (GBP4K) as it is on the AIM so my buy and sell fees are so much less and this cost me GBP16 to buy).


A day prior to purchasing MANX.L, I did buy into KIE which was a much larger holding as it met most of my metrics (CCVI =30, low debt and higher ROCE), I also liked their plans (was rewarded walking around Canary Wharf on holiday at Xmas to see their name emblazoned on some “works”).


I don’t have any more spare funds to invest until the end of February so I am researching: PhotoMe, a potential re-entry into AMS (a medical wound care company that I was in a couple of years ago 75p up to 1.35 and sold), ALU (but debt is too high but it has done a recent run), and packaging company MNDI.


So this is merely my activity and it keeps me busy: I have time on my hands to wait for recoveries but I am also taking a bit of a cautious approach (balancing a tad) as I want to be able to buy a house to live in in the UK if all goes belly-up here (means I don’t need to sell NZ property and shares).

[noodles]

Paul Scott's value blog is a great resource for small caps
http://www.stockopedia.com/contributors/paul-scott/

[percy]

BeeBop.
Thank you for starting this thread.
The links you and Noodles have given should be very interesting.

[BeeBop]

Percy, my pleasure.
I would also suggest having a quick look at The Naked Trader. He has a blog/website and shows his trades. Of course, he follows the "fashion" of small cap stocks which is not quite my approach, however, his works for him and would be worth checking in on.
I now need some "fresh" cash - have to wait a while (and watch all of the identified opportunities pass me by).

[BeeBop]

Following the disappointing financial update from Unilever today (UK time), I think I will be putting them on my consideration list....will just have to check and see that they are not in my dividend paying ETF (IUKD.L). It could be a good time to start looking into them.

[BeeBop]

My recent purchase of Manx Telecom is going nowhere, but at least not going down. However, Monks Investment Trust (MNKS.L) is going gangbusters! Currently I am doing homework into Staffline STAF.L, the metrics look great but I am not finding a lot out about their forward strategy so I am spending a bit more time in reviewing them. Also, I am going to reduce the amount of free cash I put into the market as I am becoming more cautious.

[BeeBop]

BeeBop has purchased again. Luckily timing was good as I had USD equivalent and bought my GBP the day before the Trump Dump. Purchased three lots: EMR.L (AIM HR outsourcing company) as they have global exposure, good income and across several recruitment areas. I had been intending to buy STAF.L but I didn't like their website (go figure!) and they seemed very UK focused. Got some LLOY.L as it is still low and although I am a wee bit cautious about banks, this one looks fairly sound and should have some recovery available in the share price. Finally I got some Jupiter India units as I have nothing in emerging markets at the moment. Overall the UK portfolio is good and I probably need to decide if I am going to continue to sit on my BON.L shares where I have made a hearty loss (or, do I continue to hold as maybe maybe maybe)..... Now I have a total of 20 shares/fund holdings across the US, UK and NZ.

[Valuegrowth]

Any potential upside for following two?

EasyJet plc(LON:EZJ)
Greggs PLC (LON:GRG)

I found interesting link on the latter.

http://breakingfinancenews.com/inves...-00gbx/215192/

[BeeBop]

Any potential upside for following two?

EasyJet plc(LON:EZJ)
Greggs PLC (LON:GRG)

I found interesting link on the latter.

http://breakingfinancenews.com/inves...-00gbx/215192/

For me Greggs seems like a sound long-term hold. Most of its metrics are ok by me but I think their price is a bit high compared to their sales and I suspect their cost base is a tad high. Thought about getting into them in 2013 when I sold a lot of high gainers - bah humbug, I didn't! I think they will be a long term hold rather than a short-term gain. Plenty of competition in the area now e.g. EAT (not sure what the ticker is for that one).

As for EZJ, I was burnt a tiny bit on American Airlines AAL.US so other than having shares in AIR.NZ, I stay away. That said, their metrics without digging are good (but airlines seem to always be low PE etc), and if you took a good look into their future plans possibly they could be in for some better times (although lots of low cost competition now).

A punt worth homeworking could be Sainsbury's...it you are looking for a well run main board stock - I have been in and out of it three times and would go in again if I had the free cash but I need to wait until my next quarter.

A good website for a quick screen is: http://uk.advfn.com/p.php?pid=financials&symbol=L%5EEZJ

If I had a huge portfolio, I would consider holding GRG (because I like them) but wouldn't hold EZJ (because I am nervous of airlines metrics and market pressures) - I don't mind missing big rises but I hate getting in on big falls.

[Valuegrowth]

Thanks BeeBop for your useful information. Royal Mail PLC (RMG), Anglo American plc (AAL) and McCarthy & Stone PLC (MCS) also may have some opportunity. In an over valued market only great bargains can have some opportunity.