This month, I have refrained from trading, although I might have added shares in Anpario had I realised the portfolio had enough cash to add a small holding. The company briefly strayed into value territory and now sits right on the cusp by my estimation. Like Porvair, Anpario has been on my watch list for many years.
In what must be the most active start to a year in Share Sleuth’s near 10-year history, I have traded for a third time in 2019, swapping a fraction of the portfolio’s holding in Solid State for a small shareholding in Quartix.
Following on from last month’s trades, I have again removed or reduced my holding in two of the portfolio’s shares in order to increase or add holdings in two others.
A few days into 2019, I removed Finsbury Food and MS International from the Share Sleuth portfolio and recycled the loot into XP Power and Goodwin, two existing constituents I believe are substantially undervalued. It is the first stage in a minor restructuring of the portfolio.
This is the fourth year that I have picked my top six shares, and each year I say the same thing. Although it is customary to provide tips at the beginning of the year, I do not think about investing in one-year increments. I look for companies that should prosper for a decade or more because there is something special about them, and I spread the risk by investing in a larger portfolio.
Computacenter (CCC): smart acquisitions drive revenues
Computacenter will report results for the full year to December in the new year and publish its annual report later in spring, but the signs are that the company will have followed a strong 2017 with a stronger 2018. In the first three quarters of the current year, it has reported revenue 11% higher than the same period a year ago – a figure that does not include the contributions of two acquisitions in September, right at the end of the third quarter.
I experienced one of those “Aha!” moments last Saturday, when I was reading an interview with novelist and author Matt Haig in the money section of The Times. Asked whether he invests in shares, he replied: “No. Too many numbers and indices. It seems a dull hobby and an inexact pseudoscience, like astrology. It’s like gambling without the stigma.”
Alumasc (ALU): winter woes
After five years of profitable growth, Alumasc suffered a reversal of unexpected intensity in the year to June 2018. Revenue fell 6% and adjusted profit fell 25%. Without the contribution of Wade International, a manufacturer of drainage products acquired during the year, revenue and profit would have fallen further, by 11% and 38% respectively.
This article was written in November for the December 2018 print edition of Money Observer. Market data and share prices are likely to have since changed.
Cohort (CHRT): defensive measures
Steady performance in terms of revenue and profit growth in recent years has hidden ructions at Cohort, a group of small businesses that supply technology and expertise to the armed forces, schools, councils and the police force. Flat revenue and modestly improved profit have come at the cost of the closure of one firm, the shrinkage of another and the acquisition of a third.