Looking back, I originally bought Carphone Warehouse purely on the decision to split the company and realise the value in its diverse parts hence it being in my Value side. Anyway having previously sold out of Carphone Warehouse (as Charles Dunstone reduced his stake), I have since decided that Talk Talk would be next (mainly after starting this blog and seeing the remnants of previous strategies!).
Putting the 2 sales back together, the original investment in Carphone Warehouse has given me a capital gain of 44% after charges, and then a further 1.8% from dividends. So 45.8% in total.
My thinking was also that I would use the funds to replace it with Vodaphone (for a more foucssed telecoms holding) but haven't yet run the numbers to my satisfaction.
As it stands Vodaphone is a company that, on current forecasts, has gone ex. growth. The dividend is a decent 5% plus but being greedy I would also like to see it generate growth (to grow the dividend) due to the industry that it is in: mobile networks, smart phones etc.
Further Housekeeping: Invesco Perpetual?
In terms of further housekeeping, my holding in Invesco Perpetual's High Income Fund (Accumulation units) is also under scrutiny, as I become disillusioned with its lacklustre performance and some of the more publicised decisions (albeit brave decisions) of its highly rated manager, Neil Woodford.
His timing on BP (sell), banks (sell), and pharmaceuticals (buy), appears to have been nigh on perfect but I have not recognised the benefit in the funds value. It fell significantly during the credit crunch (despite selling banks before the crunch), and has since recovered only slowly.
How would the fund have performed if it had been caught by Banks (and then BP) like the majority of investors?
It could be that my expectations are too high but with such a focussed fund and with holdings of 3, 4, and 5% or more per company (never mind sector), I am disappointed not to have seen more protection through the tough times and better performance as markets have recovered.
Similarly his recent decision to significantly reduce his holdings in water utilities (due to over regulation and capital spend restricting returns), is a brave one but then to invest in Zimbabwe seems bizarre and very risky (citywire.co.uk: Woodford snaps up 29% stake in Zimbabwe investment fund).
Finally, having bought to diversify my own portfolio (as well as on Neil Woodford's reputation), I have occasionally found holdings that mirror my own, so it is questionable if it is giving me the diversification I want particularly if I go on to buy Vodaphone, Glaxo or Astrazeneca. Perhaps bonds, or a bond fund would be more appropriate.
Growth Portfolio: New Purchase - Tesco.
Aside from tidying things up in one portfolio, I have also taken the plunge on Tesco @ 394.65p, (as discussed in a previous post Supermarket Sweep: Tesco; Morrisons; or Sainsburys?) and added them to my Growth portfolio.
As a company, Tesco has shown a dedication to growing the dividend by a near 10% per annum and has too much going for it not to generate further growth in revenues and profits.
This investment will also double my holding in UK supermarkets as I also hold Morrisons.
Again, my thoughts are that supermarkets are also an industry able to increase revenues during times of inflation as much of their product is essential.
My thinking is also to buy the shares as opposed to the Tesco Bank bond issue although, I may yet take that up as well for my Value and Income portfolio.
As ever, I am always a little nervous after an investment as it would be nice to catch the bottom of a dip, pat myself on the back, and just watch the share price rise from hereon in.
It doesn't always work like that though.
But, having bought after the unenthusiastically received results (giving management a little wake-up call), at least I can content myself knowing that I have benefitted from a dip and that I am in it for the long term.
At least that is the plan!
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