On the last day of August I added more shares in Trifast to the Share Sleuth Portfolio. Trifast manufactures fasteners: nuts, bolts, washers, rivets and screws. The decision was the result of a happy – I hope – coincidence.
Motorpoint (MOTR) High performance, low margins
Independent motor dealer Motorpoint performed very well in the year to March 2018. Revenue increased 21 per cent and profit increased 34 per cent compared to the previous year, when it experienced a mini-slump after the Brexit referendum. Even that year, Motorpoint, which had only just floated on the stock market, was an impressive performer. Return on capital in the year to March 2017 was 13 per cent. In 2018 it was 18 per cent.
It was a hot day on 23 July when I more than doubled the Share Sleuth portfolio’s holding in Solid State (SOLI) taking it from 1,070 shares, or 3 per cent of the portfolio’s total value, to 2,400 shares (6 per cent). I know it was hot that day, because every day in July was hot, but I don’t think my decision was influenced by the furnace inside my office. I followed the same measured process I have followed for every other trade in the portfolio for years now.
This month I have no trade to report, because I am happy with the portfolio’s shape, and, as you will notice if you read the Share Watch column (see page 76), my quest to find new investments that might be better than those I have already picked has drawn a blank.
It’s the Nifty Thrifty portfolio’s eighth anniversary and I’m afraid the news this time is no better than the news last June. The portfolio has edged up in value by 3 per cent over the intervening year, to just over £56,500, but the benchmark FTSE 350 index-tracking fund has increased in value by 6 per cent to just under £60,000. It looks as though the index-tracking fund, an almost effortless investment that required just one decision in June 2010, will be the first to double its original £30,000 stake.
Each month Richard Beddard trawls through annual corporate results for his Watchlist and the Share Sleuth portfolio of companies that satisfy key valuation metrics such as earnings yield and return on capital – and profiles the most interesting candidates.
Judges Scientific (JDG): set to profit despite stop-go
In comparison to 2016, the year to December 2017 was a good year for Judges Scientific. The scientific instrument manufacturer increased revenue 25 per cent and profit by more than 50 per cent.
Probably the most influential book I have ever read about investing was One Up on Wall Street, first published in 1988. The author was Peter Lynch, who achieved fame and fortune managing the Fidelity Magellan fund in the 1980s. Lynch worked for one of America’s pre-eminent fund management companies. He was a pro through and through, but he was also an enthusiast, a stockpicker who loved nothing more than to figure out companies.
There are challenges ahead, but Richard Beddard thinks Judges Scientific should prosper over the long term.
Why I have decided against adding to the holding in building materials manufacturer Alumasc, despite its profitability.
Richard Beddard thinks customers of his favourite share may have gorged themselves and as a result profits could stall.