This month, I have been agonising about something I am very bad at: selling a loser. Specifically, I have been torn between reason and sentiment, which is ironic because that is what System1, the company concerned, is all about.
As well as soul-searching about System1, I have investigated two companies for the first time and two members of the Share Sleuth portfolio this month. Let’s take the newcomers first...
IntegraFin operates Transact, an investment platform for financial advisers and their clients. By consolidating peoples’ investments in one place, it simplifies record-keeping, reporting and trading.
Welcome to the new Share Watch, which from now on will sit by the side of Share Sleuth in Money Observer so you can better see the connection between the two.
Last month’s column ended with Portmeirion on the brink of expulsion from the Share Sleuth portfolio. I feared the company, which owns popular tableware brands including Portmeirion Botanic Garden, Spode Christmas Tree and Royal Worcester, might be drifting strategically.
Nine years ago, we invested an imaginary £30,000 in shares ranked by a formula, to see whether the formula could beat the market.
On a regular basis we refreshed the portfolio, booting out shares that were no longer highly ranked and replacing them with the newest recommendations.
We expected the returns would justify the cost in terms of dealing fees and stamp duty. They would also justify the effort of ranking the shares and accounting for the imaginary trades.
News that Science has acquired 9% of Frontier Smart Technologies has sealed the former company’s fate as far as the Share Sleuth portfolio is concerned. On 28 May, I liquidated the shareholding.
This month, I have added RM, a company I profiled in the May issue’s Share Watch pages, to the Share Sleuth portfolio. I was cautious about it back then, but digging into its history has emboldened me.
RM supplies schools with equipment and IT, and examination boards with e-marking software. These businesses are not obviously natural bedfellows, which means the company is complex and has to do lots of things well – one reason for my caution.
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.