Greggs @ 410.9p, -0.7p (-0.17%)
Balfour Beatty @238.2p, +0.9p (+0.38%)
Well despite markets pausing for breath, and taking a cue from a reader, Fenchurch, I am very interested in a couple of companies at the moment, Greggs and Balfour Beatty.
Both have flitted across my radar in the past and both seem to have be having problems following recent results/statements which, on the face of it at least, stem from the UK's current economic stagnation so, I will be taking a closer look at some stage.
Related posts:
- Greggs @ 460.9p: Sausage roll anyone?
- Watchlist alerts.
Wednesday, 29 May 2013
Thursday, 23 May 2013
FTSE's fragile confidence.
FTSE 100 @ 6707.45, -132.82 (-1.94%)
Well that was a speedbump.
Chinese factory output and US Federal Reserve concerns.
Doesn't take much for the short term profiteers to cash in does it.
Related article links:
http://www.sharecast.com: London open: Fed concerns, poor Chinese data spark sell-off
Well that was a speedbump.
Chinese factory output and US Federal Reserve concerns.
Doesn't take much for the short term profiteers to cash in does it.
Related article links:
http://www.sharecast.com: London open: Fed concerns, poor Chinese data spark sell-off
Wednesday, 22 May 2013
April 2013; "following Woodford" update.
April's update of the "following Woodford" experiment and all 3 options are continuing to push ahead with the 3 picks actually managing to close a little of what has been an expanding gap between the 2 fund options directly manage by Neil Woodford and the 3 picks option.
Both of the actually managed funds are now punching up 20% gains with the 3 picks now notching up 11.24% incl. the receipt of a dividend courtesy of GlaxoSmithKline.
Related post links:
Both of the actually managed funds are now punching up 20% gains with the 3 picks now notching up 11.24% incl. the receipt of a dividend courtesy of GlaxoSmithKline.
| Shares | Price | £Value | %Growth | ||||
| Inv. Perp. High Income | 1110.14 | 6.50 | 7214.94 | 20.25% | |||
| Residue | 0.00 | ||||||
| Dividends | |||||||
| Total | 6000 | 7214.94 | 20.25% | ||||
| Edinburgh Investment Trust | 1182.00 | 5.90 | 6967.89 | 16.13% | |||
| Residue | 0.43 | ||||||
| Dividends | 260.04 | ||||||
| Total | 6000 | 7228.36 | 20.47% | ||||
| 3 Picks | |||||||
| BAT | 61.00 | 35.66 | 2175.26 | 8.76% | |||
| Glaxo | 138.00 | 16.61 | 2291.49 | 14.57% | |||
| Vodafone | 1191.00 | 0.00 | |||||
| BT | 788.00 | 2.76 | 2176.46 | -0.74% | |||
| Residue | 0.00 | ||||||
| Dividends | 31.41 | ||||||
| Total | 6000 | 6674.62 | 11.24% | ||||
| Transactions in the month: | |||||||
| Invesco Perp. High Income | N/A | ||||||
| Edinburgh Inv. Trust | |||||||
| 3 Picks | |||||||
| Glaxo | 11/04/2013 | Div | 30.36 | ||||
 |
| Click to enlarge, close to return. |
Related post links:
Tuesday, 21 May 2013
20 May 2013: Portfolio milestone.
Well thats a pretty momentous milestone hit by my portfolio yesterday as it achieved a magical 100% gain in 3 years, 4 months, and 20 days.
Seems worthy of an interim update as of the 20 May 2013.
There's also still a few ex. dividends in the pipeline that are due to be paid but fair to say even from the depths of the credit crunch, I wasn't expecting to be in this position at this stage particularly when there is still so much pessimism about amidst a hit and miss economic recovery.
Its also fair to say that not many experts would have been of the view that recovery would take so long preferring to look just beyond the next bend to the end of the year or following one.
But, from the 2008-2009 credit crunch we are now in 2013.
Banking has still not recovered (we're told), but somehow continues to pay bonuses reaped from the artificial cash flow that has come from taxpayers coffers, "and" the Bank of England's continued assault on the nations savings.
The same old warnings are still being dished out, apparently there is a cliff to come for interest only mortgage holders with no means to pay off the capital.
Its an old chestnut that one and can still be traced back to the advice given at the time the mortgage was taken out.
Forgive me if I'm wrong, but I find it even more concerning that, it is these very borrowers that have/are benefitting from the Bank of England's policies to the detriment of others more prudent.
The dollar has also settled into a stronger holding position against sterling and currently sits in the low $1.50's to £1.
It was Dec. 2010 when I started writing this blog which coincided with my annual review for the year 2010 at the time and it now seems an age away, but also seems to have passed in the blink of an eye.
So despite setting out to be patient and taking a longer term view, things have motored along very nicely anyway.
If I play around with the rule of 72 eg. 72/ 3.5 (years) suggests an average compounded return of 20.57% per annum for the (near) 3.5 year period.
And the full effect of reinvesting dividends can be seen in the charts below where one might still suggest (as many do), that visually the FTSE100 has traded sideways, but has in fact delivered 24.81% without dividends.
However, my portfolio's 100% gain with dividends reinvested looks significantly better.
Anyway, those observations aside, I'm more than pleased with the progress made so far and look forward to potentially better times when an economic recovery is in full swing.
3 year chart (31 Dec.09 starting base)
Seems worthy of an interim update as of the 20 May 2013.
There's also still a few ex. dividends in the pipeline that are due to be paid but fair to say even from the depths of the credit crunch, I wasn't expecting to be in this position at this stage particularly when there is still so much pessimism about amidst a hit and miss economic recovery.
Its also fair to say that not many experts would have been of the view that recovery would take so long preferring to look just beyond the next bend to the end of the year or following one.
But, from the 2008-2009 credit crunch we are now in 2013.
Banking has still not recovered (we're told), but somehow continues to pay bonuses reaped from the artificial cash flow that has come from taxpayers coffers, "and" the Bank of England's continued assault on the nations savings.
The same old warnings are still being dished out, apparently there is a cliff to come for interest only mortgage holders with no means to pay off the capital.
Its an old chestnut that one and can still be traced back to the advice given at the time the mortgage was taken out.
Forgive me if I'm wrong, but I find it even more concerning that, it is these very borrowers that have/are benefitting from the Bank of England's policies to the detriment of others more prudent.
The dollar has also settled into a stronger holding position against sterling and currently sits in the low $1.50's to £1.
It was Dec. 2010 when I started writing this blog which coincided with my annual review for the year 2010 at the time and it now seems an age away, but also seems to have passed in the blink of an eye.
So despite setting out to be patient and taking a longer term view, things have motored along very nicely anyway.
If I play around with the rule of 72 eg. 72/ 3.5 (years) suggests an average compounded return of 20.57% per annum for the (near) 3.5 year period.
And the full effect of reinvesting dividends can be seen in the charts below where one might still suggest (as many do), that visually the FTSE100 has traded sideways, but has in fact delivered 24.81% without dividends.
However, my portfolio's 100% gain with dividends reinvested looks significantly better.
Anyway, those observations aside, I'm more than pleased with the progress made so far and look forward to potentially better times when an economic recovery is in full swing.
| Merchant Adventurer's Index | ||||||||
| Forecast | 1 month | YTD | 40 mth | |||||
| Price | % holding | Div. yield | % gain | % gain | % gain | |||
| R-R | 1197.00p | 36.14% | 1.81% | 5.93% | 37.03% | 147.57% | ||
| National Grid | 847.50p | 17.03% | 4.84% | 10.78% | 20.55% | 56.15% | ||
| Aviva | 339.40p | 9.10% | 4.81% | 14.58% | -9.01% | 1.98% | ||
| BP | 472.55p | 4.72% | 4.90% | 2.75% | 11.24% | 8.03% | ||
| Apple ** | $442.87 | 4.65% | 2.07% | -0.46% | -12.02% | 63.10% | ||
| William Hill | 450.00p | 4.68% | 2.59% | 29.59% | 57.91% | 144.02% | ||
| IG Group | 586.00p | 4.82% | 3.77% | 9.74% | 30.22% | 65.49% | ||
| General Electric ** | $23.53 | 2.29% | 2.78% | 1.53% | 18.70% | 57.52% | ||
| Centrica | 393.10p | 2.25% | 4.41% | 6.91% | 17.84% | 24.47% | ||
| Microsoft ** | $34.94 | 2.15% | 2.20% | 21.50% | 38.41% | 48.23% | ||
| SSE | 1646.00p | 2.07% | 5.13% | 10.92% | 16.08% | 43.02% | ||
| Vodafone | 197.60p | 1.75% | 5.24% | 5.89% | 27.94% | 22.63% | ||
| BAE Systems | 413.00p | 1.88% | 4.94% | 4.74% | 22.59% | 29.37% | ||
| Morrisons | 289.30p | 1.66% | 4.40% | 4.74% | 10.00% | 14.33% | ||
| Imperial Tobacco | 2334.00p | 1.48% | 4.97% | 1.77% | 1.77% | 1.77% | ||
| BG Group | 1232.00p | 1.64% | 1.45% | 9.12% | 21.68% | 13.02% | ||
| Tesco | 383.10p | 1.40% | 3.96% | 0.41% | 14.02% | -3.97% | ||
| Cash | 0.27% | 0.00% | ||||||
| 100.00% | 3.27% | |||||||
| 1 Month | YTD | 40 mth | ||||||
| Virtual Portfolio gain (incl. Dividends) | ||||||||
| - 1 month gain 1893.55 - | 2004.76 | 5.87% | ||||||
| - YTD gain 1644.62 - | 2004.76 | 21.90% | ||||||
| - 28 month gain 1264.20 - | 2004.76 | |||||||
| - 40 month gain 1000.00 - | 2004.76 | 100.48% | ||||||
| FTSE gain (excl. Dividends) | ||||||||
| - 1 month gain 6430.12 - | 6755.63 | 5.06% | ||||||
| - YTD gain 5897.81 - | 6755.63 | 14.54% | ||||||
| - 28 month gain 5971.01 - | 6755.63 | |||||||
| - 40 month gain 5412.88 - | 6755.63 | 24.81% | ||||||
| Transactions: | ||||||||
| 17/05/2013 | Div | Aviva @ 9p per share | ||||||
| 20/05/2013 | Div | Apple @ 169.89p per share | ||||||
| Notes: | ||||||||
| * US Dividends are adjusted for exchange rate and 15% withholding tax | ||||||||
| ** Sterling : Dollar exchange rate = £1: $1.527 as at 20/05/13 | ||||||||
2 year chart (31 Dec. 10 starting base):
 |
| Click to enlarge, close to return. |
3 year chart (31 Dec.09 starting base)
 |
| Click to enlarge, close to return. |
Monday, 20 May 2013
March 2013: "following Woodford" update.
Right so taking a look at my little "following Woodford" experiment I can see that, although now comfortably positive with a gain of 7.77%, the 3 picks option continues to lag the mainstream commercial options by a 10% margin.
This follows the mixed success of the change from Vodafone to BT which has been at unfavourable terms.
The other main impact to the experiments success has been the increasing influence of Rolls-Royce on the two Neil Woodford managed options. And, Rolls-Royce now sits within the Invesco Perpetual High Income Funds Top 10 holdings at around 4.08%.
The irony is certainly not lost on me when I see that Rolls-Royce forms a significant part of my own portfolio's success.
Anyway, no other transactions this month so little else to report.
| Shares | Price | £Value | %Gain | |||
| Inv. Perp. High Income | 1110.14 | 6.37 | 7068.29 | 17.80% | ||
| Residue | 0.00 | |||||
| Dividends | ||||||
| Total | 6000 | 7068.29 | 17.80% | |||
| Edinburgh Investment Trust | 1182.00 | 5.72 | 6761.04 | 12.68% | ||
| Residue | 0.43 | |||||
| Dividends | 260.04 | |||||
| Total | 6000 | 7021.51 | 17.03% | |||
| 3 Picks | ||||||
| BAT | 61.00 | 35.27 | 2151.47 | 7.57% | ||
| Glaxo | 138.00 | 15.39 | 2123.13 | 6.16% | ||
| Vodafone | 1191.00 | 0.00 | ||||
| BT | 788.00 | 2.78 | 2190.64 | -0.09% | ||
| Residue | 0.00 | |||||
| Dividends | 1.05 | |||||
| Total | 6000 | 6466.29 | 7.77% | |||
| Transactions in the month: | |||||||||
| Invesco Perp. High Income | N/A | ||||||||
| Edinburgh Inv. | |||||||||
| 3 Picks | |||||||||
 |
| Click to enlarge, close to return, |
Related post links:
Note: Unlike my Portfolio updates (Portfolio Updates.) which reflects an actual investment portfolio, "following" Woodford is an experimental strategy and a virtual portfolio.
Thursday, 16 May 2013
Severn Trent and the Utilities "sweet spot".
Severn Trent @ 2062p, -28p (-1.34%)
Pennon @ 697p, +1p (+0.14%)
United Utilities @ 761.5p, -1p (-0.13%)
National Grid @ 835p, -9.5p (-1.12%)
Centrica @ 386.5p, +0.6p (+0.16%)
SSE @ 1593p, +2p (+0.13%)
Well Utilities seem to be in a little sweet spot at the moment if valuations are anything to go by.
Severn Trent being the latest utility to come under an acquisitive eye from an overseas consortium of investment and pension funds.
The recent rise on the initial announcement has put Severn Trent on 23 times next years earnings, and a forward yield of 4.2%, which, to me at least, seems a very hefty price valuation for a utility.
The argument for a pensions fund is the premium attached to a secure regulated earnings stream for years to come, but for a private investor, such as myself it, seems far too expensive and, unless actually taken over, certain of a fall as other cyclical industries come back to the fore in a recovering economy.
The nature of regulated industries is that they are highly geared in debt to squeeze every penny of profit from the perceived secure cash flows so there would be little there to make the business case more attractive for me at these levels either.
But it is interesting to see how different investor requirements justify different valuations and the premiums that they may be willing to pay for suitable investments.
The Severn Trent board have subsequently rejected the potential bid as too low though (http://www.dailymail.co.uk: Severn Trent rejects £5bn takeover bid by consortium including Kuwait).
Of the remaining UK water utilities: Pennon is on a forecast 16.7 times and 4.3% yield, and United Utilities is on a forecast 19 times and 4.6% yield.
Elsewhere, Portfolio holding National Grid is at the top end of a more normal trading valuation for utilities (in my view anyway), at 15.1 times next years earnings, and a yield of 5.1%, as the results were published today with a strong "inline with managed expectations" message and a forward forecast of predictability with much of the company's business, and capital plans, regulated and agreed.
Centrica is on a forecast price to earnings of 13.9 and a forecast yield of 4.6%, whilst SSE is on a forecast 14 times and 5.4% yield.
So despite being in the spotlight and having momentum behind them I would be very wary of overpaying for utilities in the current time given the willingness of others with different criteria and deeper pockets.
As mentioned earlier, my view is that the more secure, but lower earnings prospects of utility companies will see them cycle down as other sectors more geared to economic recovery come back into the spotlight and that would be a better time to invest for an investor with my resources and investment horizons.
But this view aside, the recently announced change in leadership at SSE might be the reason that this company's valuation and yield seems more reasonable than the rest.
However, I still think that the sectors valuations will cycle down and present a better value entry point for the patient investor.
Related article links:
- http://www.dailymail.co.uk: Severn Trent rejects £5bn takeover bid by consortium including Kuwait
- http://www.nationalgrid.com: Investor Relations
Related post links:
- April 2013: Portfolio Update.
Pennon @ 697p, +1p (+0.14%)
United Utilities @ 761.5p, -1p (-0.13%)
National Grid @ 835p, -9.5p (-1.12%)
Centrica @ 386.5p, +0.6p (+0.16%)
SSE @ 1593p, +2p (+0.13%)
Well Utilities seem to be in a little sweet spot at the moment if valuations are anything to go by.
Severn Trent being the latest utility to come under an acquisitive eye from an overseas consortium of investment and pension funds.
The recent rise on the initial announcement has put Severn Trent on 23 times next years earnings, and a forward yield of 4.2%, which, to me at least, seems a very hefty price valuation for a utility.
The argument for a pensions fund is the premium attached to a secure regulated earnings stream for years to come, but for a private investor, such as myself it, seems far too expensive and, unless actually taken over, certain of a fall as other cyclical industries come back to the fore in a recovering economy.
The nature of regulated industries is that they are highly geared in debt to squeeze every penny of profit from the perceived secure cash flows so there would be little there to make the business case more attractive for me at these levels either.
But it is interesting to see how different investor requirements justify different valuations and the premiums that they may be willing to pay for suitable investments.
The Severn Trent board have subsequently rejected the potential bid as too low though (http://www.dailymail.co.uk: Severn Trent rejects £5bn takeover bid by consortium including Kuwait).
Of the remaining UK water utilities: Pennon is on a forecast 16.7 times and 4.3% yield, and United Utilities is on a forecast 19 times and 4.6% yield.
Elsewhere, Portfolio holding National Grid is at the top end of a more normal trading valuation for utilities (in my view anyway), at 15.1 times next years earnings, and a yield of 5.1%, as the results were published today with a strong "inline with managed expectations" message and a forward forecast of predictability with much of the company's business, and capital plans, regulated and agreed.
Centrica is on a forecast price to earnings of 13.9 and a forecast yield of 4.6%, whilst SSE is on a forecast 14 times and 5.4% yield.
So despite being in the spotlight and having momentum behind them I would be very wary of overpaying for utilities in the current time given the willingness of others with different criteria and deeper pockets.
As mentioned earlier, my view is that the more secure, but lower earnings prospects of utility companies will see them cycle down as other sectors more geared to economic recovery come back into the spotlight and that would be a better time to invest for an investor with my resources and investment horizons.
But this view aside, the recently announced change in leadership at SSE might be the reason that this company's valuation and yield seems more reasonable than the rest.
However, I still think that the sectors valuations will cycle down and present a better value entry point for the patient investor.
Related article links:
- http://www.dailymail.co.uk: Severn Trent rejects £5bn takeover bid by consortium including Kuwait
- http://www.nationalgrid.com: Investor Relations
Related post links:
- April 2013: Portfolio Update.
Tuesday, 14 May 2013
Sublimely Ridiculous!
FTSE100 @ 6686.06, +54.3 (+0.82%)
Vodafone @ 193.5p, nc.
BAE @ 398p, +8.5p (+2.18%)
R-R @ 1218p, +34p (+2.87%)
OK so things are starting to look sublimely ridiculous now with a near 21% gain in my portfolio for the year to date.
But, it might not be as pleasing should markets fall back in line with fundamentals and perceived risks.
However, there have been splashes of good news today with the announcement of a further dividend of £2.1bn (Vodafone to get $3.15bn dividend from Verizon Wireless), forthcoming from Vodafone's joint venture Verizon Wireless.
That brings the total payout to its parent companies, since resuming payments in 2011, to $18.5bn.
Not a bad return by any measure!
This particular payment seems to have caught many by surprise given the ongoing speculation over whether or not the two owners can agree a deal on the venture's future ownership.
As it stands Vodafone has yet to declare its intentions for the dividend which wont be known until the company reports its full year results on May 21.
Again, it does put a question mark (in the short term at least), over Neil Woodford's decision to remove Vodafone from his funds.
But, his retention of another investment, BAE seems to be prospering, and the company's recent interim statement seems to be supporting the shares recent run.
Elsewhere, Rolls-Royce is now starting to look ahead of itself as it touches new highs, yet still seems to be rising despite announcing in a trading statement, that a high flying executive, Mark King, has resigned amid ongoing speculation about potential findings in the intermediary scandal.
Related post links:
- http://www.telegraph.co.uk: Vodafone to get $3.15bn dividend from Verizon Wireless
- http://www.telegraph.co.uk: Bribery concerns mount as Rolls-Royce high-flyer quits
Vodafone @ 193.5p, nc.
BAE @ 398p, +8.5p (+2.18%)
R-R @ 1218p, +34p (+2.87%)
OK so things are starting to look sublimely ridiculous now with a near 21% gain in my portfolio for the year to date.
But, it might not be as pleasing should markets fall back in line with fundamentals and perceived risks.
However, there have been splashes of good news today with the announcement of a further dividend of £2.1bn (Vodafone to get $3.15bn dividend from Verizon Wireless), forthcoming from Vodafone's joint venture Verizon Wireless.
That brings the total payout to its parent companies, since resuming payments in 2011, to $18.5bn.
Not a bad return by any measure!
This particular payment seems to have caught many by surprise given the ongoing speculation over whether or not the two owners can agree a deal on the venture's future ownership.
As it stands Vodafone has yet to declare its intentions for the dividend which wont be known until the company reports its full year results on May 21.
Again, it does put a question mark (in the short term at least), over Neil Woodford's decision to remove Vodafone from his funds.
But, his retention of another investment, BAE seems to be prospering, and the company's recent interim statement seems to be supporting the shares recent run.
Elsewhere, Rolls-Royce is now starting to look ahead of itself as it touches new highs, yet still seems to be rising despite announcing in a trading statement, that a high flying executive, Mark King, has resigned amid ongoing speculation about potential findings in the intermediary scandal.
Related post links:
- http://www.telegraph.co.uk: Vodafone to get $3.15bn dividend from Verizon Wireless
- http://www.telegraph.co.uk: Bribery concerns mount as Rolls-Royce high-flyer quits
Sunday, 12 May 2013
April 2013: Portfolio Update.
April has again been a good month for my portfolio courtesy of National Grid, William Hill, and, surprisingly, Microsoft.
Lesser gains came from elsewhere helping to negate the falls in Tesco, BAE, GE, and Apple.
Bizarrely R-R recorded a flat month end to month end performance.
A small, but regular, dividend came in from GE, and the William Hill rights issue was completed with the additional shares now listed and the share price already stabilising above £4.
As ever, keeping it there, and the measure of success for recent acquisitions is the company managing to maintain growth and profitability. Cashflow will be particularly important given the weakening of the balance sheet and additional shares issued.
A 2.57% gain in the month and 15.14% year to date is heady stuff after just 4 months of the year though.
The FTSE itself has recorded 0.29% in the month and 9.03% for the year to date.
The most significant transaction for my portfolio in April has come with the purchase of a position in Imperial Tobacco which for many years has been a taboo industry for me but given that successive Government's have continued to show an addictive reliance on the tax revenues from this industry it is unlikely to be outlawed anytime soon leaving the choice to smoke, or not to smoke down to the consumer.
My preference would have been to purchase the expected extra growth that greater exposure to emerging markets brings to British American Tobacco but instead have settled for the valuation discount in Imperial with its greater exposure to Europe and higher debt levels from acquisitions prior to the credit crunch.
As it is I have bought into this discounted valuation, and 5% yield, coupled with an outside chance of takeover.
Debt levels shouldn't be of any concern given the company's strong industry typical cashflows.
I've also taken another bite at Apple but not yet added this to my portfolio as I'm undecided whether to add additional funds to what has been an unchanged base since I started the portfolio updates.
My portfolio's forward yield, at 3.46%, has dropped quite a bit though, given the cut to Aviva's dividend and the surge in my portfolio's value this year.
The dollar has also given up a little of its gains and at the end of April settled at around $1.55 to the pound.
Chart wise the start to this year continues to be strong and almost straight lined in 2013 despite the FTSE's performance flattening over the last 3 months.
So an interesting start to the year, and even more so given that the FTSE has started to flatten.
Still little signs of a global recovery though, and we haven't heard too much from Europe recently either, but the region still has huge problems and it remains a spinning coin as to whether the Euro "experiment" will survive the current situation without some kind of membership revisit.
The EU itself seems a million miles away from the original common market concept.
It might not have been easy to foresee the credit crunch, and many would have chosen to ignore the signs, particularly as it grew like some great pyramid scheme, but the current EU problems in managing a huge region of diverse multi-speed economies with the full spectrum of strengths, weaknesses, and prospects were all too predictable.
Still, a storming start to the year though!
Earlier posts:
- March 2013: Portfolio Update.
- February 2013: Portfolio update.
- January 2013: Portfolio Update.
- December 2012: Portfolio Update (2012 Year-end).
Lesser gains came from elsewhere helping to negate the falls in Tesco, BAE, GE, and Apple.
Bizarrely R-R recorded a flat month end to month end performance.
A small, but regular, dividend came in from GE, and the William Hill rights issue was completed with the additional shares now listed and the share price already stabilising above £4.
As ever, keeping it there, and the measure of success for recent acquisitions is the company managing to maintain growth and profitability. Cashflow will be particularly important given the weakening of the balance sheet and additional shares issued.
A 2.57% gain in the month and 15.14% year to date is heady stuff after just 4 months of the year though.
The FTSE itself has recorded 0.29% in the month and 9.03% for the year to date.
The most significant transaction for my portfolio in April has come with the purchase of a position in Imperial Tobacco which for many years has been a taboo industry for me but given that successive Government's have continued to show an addictive reliance on the tax revenues from this industry it is unlikely to be outlawed anytime soon leaving the choice to smoke, or not to smoke down to the consumer.
My preference would have been to purchase the expected extra growth that greater exposure to emerging markets brings to British American Tobacco but instead have settled for the valuation discount in Imperial with its greater exposure to Europe and higher debt levels from acquisitions prior to the credit crunch.
As it is I have bought into this discounted valuation, and 5% yield, coupled with an outside chance of takeover.
Debt levels shouldn't be of any concern given the company's strong industry typical cashflows.
I've also taken another bite at Apple but not yet added this to my portfolio as I'm undecided whether to add additional funds to what has been an unchanged base since I started the portfolio updates.
My portfolio's forward yield, at 3.46%, has dropped quite a bit though, given the cut to Aviva's dividend and the surge in my portfolio's value this year.
The dollar has also given up a little of its gains and at the end of April settled at around $1.55 to the pound.
| Merchant Adventurer's Index | ||||||||||||||||||
| Forecast | 1 month | YTD | 28 mth | |||||||||||||||
| Price | % holding | Div. yield | % gain | % gain | % gain | |||||||||||||
| R-R | 1130.00p | 36.12% | 1.92% | 0.00% | 29.36% | 81.38% | ||||||||||||
| National Grid | 819.50p | 17.44% | 5.01% | 7.12% | 16.57% | 48.19% | ||||||||||||
| Aviva | 305.10p | 8.66% | 5.35% | 3.00% | -18.20% | -9.70% | ||||||||||||
| BP | 466.40p | 4.93% | 4.96% | 1.41% | 9.79% | 1.90% | ||||||||||||
| Apple ** | $442.70 | 4.84% | 2.07% | -2.15% | -13.52% | 17.02% | ||||||||||||
| William Hill | 426.00p | 4.69% | 2.73% | 22.68% | 29.33% | 131.30% | ||||||||||||
| IG Group | 538.50p | 4.68% | 4.10% | -0.84% | 19.67% | 12.84% | ||||||||||||
| General Electric ** | $22.27 | 2.26% | 2.94% | -5.50% | 10.48% | 46.61% | ||||||||||||
| Centrica | 371.00p | 2.25% | 4.67% | 0.90% | 11.21% | 11.88% | ||||||||||||
| Microsoft ** | $33.09 | 2.12% | 2.32% | 13.16% | 28.90% | 19.02% | ||||||||||||
| SSE | 1557.00p | 2.08% | 5.42% | 4.92% | 9.80% | 27.10% | ||||||||||||
| Vodafone | 196.20p | 1.84% | 5.28% | 5.14% | 27.03% | 21.76% | ||||||||||||
| BAE Systems | 375.50p | 1.81% | 5.43% | -4.77% | 11.46% | 13.79% | ||||||||||||
| Morrisons | 292.10p | 1.78% | 4.36% | 5.76% | 11.06% | 9.16% | ||||||||||||
| Imperial Tobacco | 2300.00p | 1.54% | 5.05% | 0.29% | 0.29% | 0.29% | ||||||||||||
| BG Group | 1084.50p | 1.53% | 1.65% | -3.94% | 7.11% | -16.32% | ||||||||||||
| Tesco | 366.15p | 1.41% | 4.14% | -4.04% | 8.97% | -8.21% | ||||||||||||
| Cash | 0.01% | 0.00% | ||||||||||||||||
| 100.00% | 3.46% | |||||||||||||||||
| 1 Month | YTD | 28 mth | ||||||||||||||||
| Virtual Portfolio gain (incl. Dividends) | ||||||||||||||||||
| - 1 month gain 1784.42 - | 1893.55 | 2.57% | ||||||||||||||||
| - YTD gain 1644.62 - | 1893.55 | 15.14% | ||||||||||||||||
| - 28 month gain 1264.20 - | 1893.55 | 49.78% | ||||||||||||||||
| - 40 month gain 1000.00 - | 1893.55 | 89.36% | ||||||||||||||||
| FTSE gain (excl. Dividends) | ||||||||||||||||||
| - 1 month gain 6352.95 - | 6430.12 | 0.29% | ||||||||||||||||
| - YTD gain 5897.81 - | 6430.12 | 9.03% | ||||||||||||||||
| - 28 month gain 5971.01 - | 6430.12 | 7.69% | ||||||||||||||||
| - 40 month gain 5412.88 - | 6430.12 | 18.79% | ||||||||||||||||
| Transactions: | ||||||||||||||||||
| 02/04/2013 | Rights | William Hill @ 2.45p per share | ||||||||||||||||
| 26/04/2013 | Buy | Imperial Tobacco @ £22.677185 | ||||||||||||||||
| 29/04/2013 | Div | GE @ 14.46c per share | ||||||||||||||||
| Notes: | ||||||||||||||||||
| * US Dividends are adjusted for exchange rate and 15% withholding tax | ||||||||||||||||||
| ** Sterling : Dollar exchange rate = £1: $1.553 as at 30/04/13 | ||||||||||||||||||
Chart wise the start to this year continues to be strong and almost straight lined in 2013 despite the FTSE's performance flattening over the last 3 months.
 |
| Click to enlarge, close to return. |
So an interesting start to the year, and even more so given that the FTSE has started to flatten.
Still little signs of a global recovery though, and we haven't heard too much from Europe recently either, but the region still has huge problems and it remains a spinning coin as to whether the Euro "experiment" will survive the current situation without some kind of membership revisit.
The EU itself seems a million miles away from the original common market concept.
It might not have been easy to foresee the credit crunch, and many would have chosen to ignore the signs, particularly as it grew like some great pyramid scheme, but the current EU problems in managing a huge region of diverse multi-speed economies with the full spectrum of strengths, weaknesses, and prospects were all too predictable.
Still, a storming start to the year though!
Earlier posts:
- March 2013: Portfolio Update.
- February 2013: Portfolio update.
- January 2013: Portfolio Update.
- December 2012: Portfolio Update (2012 Year-end).
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