A brief update on my dealings within the Tinker portfolio; the last quarterly update was given on 1st November 2016. Firstly a few points regarding the portfolio exercise:
I hold or have held during the period of this folio 80% of the stocks discussed.
When I first but a stock I usually allocate at least a 15% stop loss, could be as much as 20% for a small market cap: I like to give the stock time to breathe as it were.
As the stock appreciated in value, I move to a trailing stop loss which is somewhat tighter at 10-12%.
Four Trades On 15th December 2016:
A rather successful stock, Next Fifteen Communications, had risen nicely but over the last couple of weeks had started to drift back and breached the 12% trailing stop loss. This prompted me to sell just over 75% of the holding for a 36% profit and releasing £12000 to be reinvested in other constituents of the Tinker portfolio.
The reinvestments of £4000 per stock, less fees, were made into each of the following stocks currently held within the portfolio:
Current Tinker Portfolio Performance:
Since the start of the Tinker portfolio on 25th January 2016, it has increased in value from £100,000 to £123,500 i.e an increase of 23.5% compared to the FTSE All Share Total Return (ASX.TR) of 19.0%: who back in January or indeed I after Brexit would have thought that the FTSE ASX.TR would have performed so well?
Decreasing or Increasing Positions:
I really only sell when I see a pre-planned reason to do so as I totally ignore market noise. At least that’s what I tell myself! Remembering that the portfolio exercise rules are that no new stocks may be introduced during a 12 month period starting 27/1/16, the pre-planned strategy for selling is:
The strategy for adding to positions within the portfolio is simply based on really encouraging news released by the company. That could be “profits materially ahead of market expectations” or something happening with the business that is claimed to be transformational.
The next planned update of the portfolio in at the end of January 2017 and for the revisions, I am currently working through my usual cash flow/returns on capital screens.
Just a quick update on trades in November and December within my portfolio:
The following have been sold or position reduced:
BOO: 50% sale of position bought at 27p: maybe just getting a touch lofty and occupying too higher a percentage of the dealing account and subject to CGT.
TRAKM8: their results on 28th November were in my view a bit of a disaster and to add zero joy, a profits warning. In 95% of the cases where I hold a stock that suffers a profits warning, I sell as soon as I can on that morning. Thankfully I only had a tiny initial position of 1000 shares as I felt slightly uncomfortable opex costs being partly capitalised. I sold my holding at 141p for a niggly little loss of £700; apart from “I told myself so”. I also feel that TRAKM8 management could have been shall we say, been a touch more dynamic in keeping the market informed. Once I lose trust in management, that’s it, I am out and unlikely to return. Interestingly I got out early at 141p on the day of the RNS, 28/11/16, the price has kept dropping and at the time of writing sits at 90p to sell.
GVC: I bought these back in January this year as I liked the transformational story that was unfolding. On an initial purchase, I place a 20% stop loss which I then convert to a non-automated 12-15% trailing stop loss as the share appreciated. This one has done quite well but has been falling back recently and breached by 15% trailing stop loss so time to lock in a 33% profit on a medium sized holding.
The following have been purchased or added to in the last couple of weeks:
IG Design: a top up of current position following very good interims on 29th November and a very positive outlook statement. I also get a very good impression of the management of IGR and with the exception of really bad news, intend to hold for some time.
Topps Tiles: I rather liked the final results and the ditching of low margin products and the move to higher margin item including the large sized tiles; my thought was that the market had just not latched onto the change. However, an unfortunate accounting oversight in like for like sales has caused a jitter but not so much a jitter as that to be felt within their finance directorate I would suspect. These things happen, unfortunately, yet no lasting damage done as such in my opinion.
Patisserie Holdings: CAKE: I was impressed with their interims and the organically funded roll-out programme and therefore added to a current position in CAKE. I really like the business and did not take much persuasion to adding stock on 29th November.
D4t4: this one has been shouting at me through my cash flow screens over recent weeks and has really impressive returns on capital: ROCE 21% & CROCI 39%. I dithered a little last week as I needed to find out a touch more about the increase in receivables (4211) v 2121. However, I eventually felt comfortable enough to take an initial position at 140p. Since my purchase, a tip in SCSW has sent the shares up to 170p which bizarrely is more of a hindrance than a help in terms of adding further positions.
ITV: again a share that has come up on my cash flow screens in recent months but was drifting back somewhat. That drift seems to have stabilised and I took an initial position on 6/12/16 at 171p. Very good yield and exceptional returns on capital: ROCE 40% & CROCI 23% plus decent enough trading update on 10/11/16.
Overall the financial year is progressing well and certainly much better than I thought it would be following the shock Brexit vote. I do havea few Brexit beauties that have proved real bargain buys but thats another story.
Incidentally, I always measure portfolio performance in terms of FY as it ties in with CGT and ISA timelines for the addition of cash which pleasingly increase to £20k next April. As ever, all dividends are reinvested in the relevant stock.
Welcome to my Blog Page - I hope you find my whittling on to be of some interest. I am a private investor who is happy to share thoughts on the market and individual stocks. Please remember that I am definitely not offering tips or investment advice.