This month, I’ve made two trades. The first was perhaps the easiest I have ever made; and the second – well, it should have been easy but a virus intervened.
Owing to high valuations across the board and because, despite frantic efforts, I have dug up no new companies to invest in, there were only two high-scoring additions to the Share Sleuth portfolio open to me this month, both existing members that are underrepresented (See Share Watch for an explanation of how I score shares). They were Victrex, which accounted for just 2.2% of the portfolio, and Anpario, which is a slightly smaller holding.
In October last year, I noted that PZ Cussons was at a crunch point. The company owns illustrious consumer brands such as Imperial Leather soap, but revenue and profit had declined significantly over the previous five years. PZ Cussons had halted its acquisitive strategy and started selling its less profitable businesses, some of them acquired only recently.
A sudden re-rating of shares in Judges Scientific means Christmas came early for the Share Sleuth portfolio, but also left me with a thorny problem.
This month Share Sleuth is spoilt for potential trades. Victrex, one of the most highly rated shares in Share Watch, is under-represented at 2.5% of the portfolio’s total value, whereas the share price of Judges Scientific has risen so much that the portfolio’s holding has grown to 8.5% of its total value, so it is over-represented.
This month, I have liquidated the Share Sleuth portfolio’s small holding of 434 shares in Colefax, raising £1,747 after a £10 deduction in lieu of broker fees. The share price, quoted by a broker, was 405p.
If you have read my contribution to Money Observer’s 40 tips for better investing, you will know I do not dwell on performance. However, it is not just Money Observer that is celebrating an anniversary this month. On 9 September, the Share Sleuth portfolio was 10 years old.
The last decade has not obviously been a propitious time to invest. The Share Sleuth portfolio was born towards the end of an 18-month-long contraction in the economy, the longest UK recession since quarterly figures on economic growth were first published in 1955.
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.
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.
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.