Voyager RNS Log WC 20/05/2018 As ever, although I may get keen about a stock, what I put into print here is purely me sharing my rambling thought process and NOT INVESTMENT ADVICE to either buy or sell a particular stock. The key for the colouring of text within these notes: Text in normal black: just my thoughts. Text in blue italics: direct lifts or copy & paste from the RNS issues by the business. Text in green: loosely, the investment principles that I feel comfortable with. Red is a disclaimer in that what I write is NOT investment advice. Well, that’s the Royal wedding out of the way and I suspect that although it cost the country a fair bit to stage it probably brought in its own way, brought much more income to the UK. In reality, I can’t claim to be a royalist although I do appreciate the work that they do particularly in charitable areas. Still, I guess that many folks had a good day out in the sunshine enjoying a peaceful day and that can’t be bad. This week I have been doing a bit of an audit looking at the top 10 current holding ranked by value in the Voyager; it’s just a bit of an exercise really as I sometimes think that I should really slim down from the current 24 holdings to say 10 to 15 but that’s maybe work in progress. As for the top 10, the average return over the last 18-24 month period has very substantially exceeded the fairly challenging benchmarks I use (see earlier article about my approach to benchmarking my portfolio NOTE: it’s not benchmarking as in tracking but simply me saying “if you can’t beat great guys such as Terry Smith, Giles Hargreave, Gervais Williams then maybe it’s time to let them manage your investment). Indeed, it has truthfully been a very profitable period yet such fertile times don’t come around year after year and that’s the reason why I believe that it’s best to assess one's performance over at least a five year period. How long will these fertile times last? Well, I suspect that most investors found the going to be tougher during the last quarter of 2017/18 compared to earlier in that FY but, that’s investing. Of course, I have “RNS Managed” the portfolio by continually adding to the winners and jettisoning any positions that carried a risk to my capital e.g. on lesser news/profits warning, 95% of the time I simply kill the risk and sell. My reasoning for any decisions or actions that I carry out are all briefly discussed within the Voyager RNS Log. Many of those decisions arise from my “RNS fag-packet calculations” giving me an instant early view of short term to medium term prospects for a particular holding based on my assessment of the latest news: as an examples see last week’s RNS log for PMP and a week or so earlier the fag-packet on OTB. I intend to supplement this log in future by including the fag-packet as a regular feature; I may also produce a short dedicated article to introduce the fag-packet. Anyway, on to this week's Voyager: Monday 21/05/2018: No RNSs of significance to the Voyager Tuesday 22/05/2018: No RNSs of significance to the Voyager Wednesday 23/05/2018: Restaurant Group: RTN: Mkt Cap £630m: Trading Update RNS. Current trading Our strategic initiatives are driving improved performance in our Leisure business in a market in which like-for-like sales remain challenging. Like-for-like sales for the 20 weeks ended 20 May 2018 declined 4.3% and total sales declined 3.1%. Trading in the period was heavily impacted by the adverse weather and on an underlying basis, excluding the impact of snow, like-for-like sales were down 3.1%. In the first seven weeks of the second quarter like-for-like sales declined 1.8% as we began to lap the significant price investments made last year in order to re-establish our value credentials in our Leisure business. Our Pubs and Concessions businesses continue to outperform the market. Property During the first 20 weeks we have opened nine new units. The pipeline of new openings within our Pubs business has been further strengthened with the acquisition of four pubs from Ribble Valley Inns. Including these we now expect to open around 10 pubs this year. Strong progress has been made in our Concessions business with expansion into new travel hubs. We now expect to open at least 12 new concession sites this year. We have successfully exited a further five closed sites in 2018 bringing the number of sites exited to 26 out of 41 closed sites. Outlook We are comfortable with the performance in the first 20 weeks of the current financial year and expect to see further benefit from our strategic initiatives as the year progresses. We expect to deliver results for the full year in-line with current market expectations. My View: In terms of a recovery stock and the market reservation that things may not be gradually improving i.e if the decline were getting worse, there were no unpleasant shocks in the trading update. Also, reassuringly the comment “we expect to deliver results for the full year in-line with current market expectations”. The market certainly seemed to be quite taken by the results and the shares rose a few %. Personally, I feel the recovery will continue for some time yet and whilst it does, I will enjoy the 5%+ dividends which are well covered by free cash flow. In my view apart from utility stocks or pseudo utilities, FCF dividend cover is the measure investors should use for a sustainable dividend security. Conventional dividend cover of EPS/DPS can be a touch risky especially if the company is having to reinvest stacks of capital back into the business over a period of time. Note: I did a brief write up on RTN in the Voyager for week commencing 15/04/2018. Wednesday 23/05/2018: Medica Group: MGP: Mkt Cap £148m: AGM Statement RNS: Medica's Chairman, Roy Davis, will provide the following update at the AGM: 2018 has started well. Medica is performing in-line with the Board's expectations and recruitment of radiologists has continued to be strong. The anticipated full year 2018 results remain in line with the Board's expectations. My View: Well what does that mean? Let’s have a look at expectations as far as the brokers are concerned: So, what I like about the statement is that firstly it tackles the worry some folk may have had about recruitment of radiologists; excellent, no problem there. Secondly, it reassures that with almost 5 months of the FY passed, the board anticipates results being within their expectations (we have to, of course, assume that the board's expectations are aligned to market expectations; why not just say in line with market expectations: always a bit frustrating). All in all, comfortable enough in my opinion for this stock that was hit overly hard in mid-January: see write up in last weeks voyager regarding my recent attraction and purchase of MGP. The market reacted well to the results initially up 5% but there still seems to be a touch of late in the day selling as possibly one large holder gradually exits their position.
Thursday 24/05/2018: No RNSs of significance to the Voyager Friday 25/05/2018: No RNSs of significance to the Voyager Whats on the horizon over the next week or into early June? I suspect we will hear trading updates from AMO, BOO, BOY & GAW. We also have finals from my favourite housebuilder, Telford, on 30/05/2018. Then the following day, 31/05/2018, finals from AIR whose results were delayed following the discovery of a touch of creative accounting; previously covered in this log. Have a great weekend and for sports lovers, there is plenty to entertain with Real Madrid v Liverpool, the various playoff finals and just to dampen the spirit, the test match. As ever, happy investing & hope to catch you next week.
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