Wow!
Can't believe that!
So, I wrote a small section on Rolls-Royce in my earlier portfolio update, October 2014: Portfolio Update., and published it at 12:24pm (an amended time following my correction for an omission), where I put forward a view on the effectiveness of the key executives and the company's previously successful financial disciplines.
Then, I notice a Sharecast article by Oliver Hall, and first published at 14:11, Rolls-Royce replaces CFO and makes 2,600 job cuts.
Seems there is something in the ether!
Related Posts/Article Links:
- www.sharecast.com: Rolls-Royce replaces CFO and makes 2,600 job cuts
- October 2014: Portfolio Update
Tuesday 4 November 2014
October 2014: Portfolio Update.
OK so thats the dreaded October out of the way, but it has left a small amount of company specific carnage in its wake with the profit warning from Rolls-Royce which I was not looking forward to seeing at this period end update
However, even with a -12.55% fall in the month, from what had amounted to being around 25% of my portfolio, the overall fall in the month of -1.88% feels like an escape.
The wider picture tells me that Rolls-Royce has now lost -32.64% this year though and that is hugely disappointing and suggests that the current leadership are potentially not the right men at the top.
The change of Chairman, CEO, and CFO in recent years suggests a detachment from the successful strategy and financial discipline that has propelled the company to its current position.
The strong cashflow and available finances that have subsequently flowed have also masked what now looks like a deterioration in disciplines as new faces in controlling positions have not come up to speed fast enough, and this is now becoming visible.
So whilst the company continues to look strong with strong ongoing prospects, the decision making on protecting the balance sheet, and cash flow seems to have gone a little awry of late in a company that has historically maintained a clear focus on its future strategic goals and the best route to move towards them.
In short the available riches of recent years appears to have resulted in apathy and deal making.
Elsewhere, dividends were slim this month with just one coming in from GE.
But, Apple has surged 9.04% in the month following a good set of iPhone 6 figures.
BG Group also fell by -8.94% and whilst my hand hovers over the sell button, a new, highly regarded CEO, Helge Lund (credited with transforming the Norwegian state owned Statoil), has come in, so there may yet be light at the end of the tunnel for those with patience.
My more recent addition of Barratt Developments also performed well with a 5.76% gain in the month.
In summary then, my portfolio is down -1.88% in the month, and 3.78% year to date, and continues to lag the FTSE 100's performance of -1.15% in the month and -3% year to date.
But, putting that in context and in a more positive light, -3.78% year to date is also just -3.78% down from my portfolio's all time closing high achieved on the 31 December 2013.
And the chart illustration of performance over the last 46 months.
I'm not really a technical investor but the recent sharp downturn is now clearly on the long term trendline, and unless it bounces/turns upwards sharply, looks in danger of breaking what has been a strong trend of growth in my portfolio.
So, it continues to be a tough year for my portfolio, but having trimmed Tesco, and Morrisons (and clearing some of my negativity), and adding new funds to the incoming dividends, I am now looking to add those funds back into the market which might yet see a year end rally.
And, whilst this year now looks to be one of, at best, consolidation, I am already looking beyond 2014 to next year.
To that effect I made my first re-investment yesterday adding Banco Santander to the fold, and this will show in November's Update.
Until next month...
Previous Posts:
- September 2014: Portfolio Update
- August 2014: Portfolio Update
- July 2014: Portfolio Update.
- June 2014: Portfolio Update.
- May 2014: Portfolio Update.
- April 2014: Portfolio Update.
- March 2014: Portfolio Update.
- 2013 Dividends profiled.
- February 2014: Portfolio Update
- January 2014: Portfolio Update
- December 2013: Portfolio Update.
However, even with a -12.55% fall in the month, from what had amounted to being around 25% of my portfolio, the overall fall in the month of -1.88% feels like an escape.
The wider picture tells me that Rolls-Royce has now lost -32.64% this year though and that is hugely disappointing and suggests that the current leadership are potentially not the right men at the top.
The change of Chairman, CEO, and CFO in recent years suggests a detachment from the successful strategy and financial discipline that has propelled the company to its current position.
The strong cashflow and available finances that have subsequently flowed have also masked what now looks like a deterioration in disciplines as new faces in controlling positions have not come up to speed fast enough, and this is now becoming visible.
So whilst the company continues to look strong with strong ongoing prospects, the decision making on protecting the balance sheet, and cash flow seems to have gone a little awry of late in a company that has historically maintained a clear focus on its future strategic goals and the best route to move towards them.
In short the available riches of recent years appears to have resulted in apathy and deal making.
Elsewhere, dividends were slim this month with just one coming in from GE.
But, Apple has surged 9.04% in the month following a good set of iPhone 6 figures.
BG Group also fell by -8.94% and whilst my hand hovers over the sell button, a new, highly regarded CEO, Helge Lund (credited with transforming the Norwegian state owned Statoil), has come in, so there may yet be light at the end of the tunnel for those with patience.
My more recent addition of Barratt Developments also performed well with a 5.76% gain in the month.
In summary then, my portfolio is down -1.88% in the month, and 3.78% year to date, and continues to lag the FTSE 100's performance of -1.15% in the month and -3% year to date.
But, putting that in context and in a more positive light, -3.78% year to date is also just -3.78% down from my portfolio's all time closing high achieved on the 31 December 2013.
| Merchant Adventurer's Index | ||||||||
| Forecast | 1 month | YTD | 46 mth | |||||
| Price | % holding | Div. yield | % gain | % gain | % gain | |||
| R-R | 843.00p | 22.91% | 3.02% | -12.55% | -32.64% | 28.41% | ||
| National Grid | 926.00p | 15.28% | 4.68% | 4.28% | 17.51% | 67.45% | ||
| Aviva | 521.00p | 11.48% | 3.68% | -0.57% | 15.86% | 54.20% | ||
| BP | 449.00p | 4.90% | 5.55% | -0.88% | -8.00% | -0.88% | ||
| Apple ** | $108.00 | 7.92% | 1.54% | 9.04% | 39.21% | 85.62% | ||
| Vodafone | 207.30p | 2.13% | 5.48% | 1.62% | -17.84% | -17.84% | ||
| Verizon ** | 3144.26p | 1.54% | 3.76% | 2.25% | 13.29% | 13.29% | ||
| IG Group | 601.00p | 4.06% | 4.76% | 1.01% | -2.44% | 25.94% | ||
| William Hill | 360.50p | 3.08% | 3.52% | -2.57% | -10.30% | 95.74% | ||
| Imperial Tobacco | 2711.00p | 2.85% | 5.17% | 1.76% | 15.95% | 20.01% | ||
| BAT | 3547.00p | 2.53% | 4.43% | 1.87% | 9.54% | 5.75% | ||
| General Electric ** | $25.81 | 1.97% | 2.73% | 2.48% | -4.86% | 65.12% | ||
| Microsoft ** | $46.95 | 2.27% | 2.05% | 3.02% | 29.60% | 64.10% | ||
| BAE Systems | 458.70p | 1.72% | 4.55% | -2.61% | 5.45% | 39.00% | ||
| Centrica | 302.50p | 1.42% | 6.00% | -1.79% | -13.00% | -8.78% | ||
| SSE | 1599.00p | 1.65% | 5.62% | 3.36% | 16.72% | 30.53% | ||
| BG Group | 1040.00p | 1.14% | 1.97% | -8.93% | -19.85% | -19.75% | ||
| Barrat Dev. | 418.80p | 1.40% | 3.39% | 5.76% | 17.16% | 17.16% | ||
| Cash | 9.75% | 0.00% | ||||||
| 100.00% | 3.39% | |||||||
| 1 Month | YTD | 45 mth | ||||||
| Virtual Portfolio gain (incl. Dividends) | ||||||||
| - 1 month gain 2097.83 - | 2058.4 | -1.88% | ||||||
| - YTD gain 1644.62 - | 2058.4 | -3.78% | ||||||
| - 46 month gain1264.20 - | 2058.4 | 62.82% | ||||||
| - 58 month gain1000.00 - | 2058.4 | 105.84% | ||||||
| FTSE gain (excl. Dividends) | ||||||||
| - 1 month gain 6622.72 - | 6546.7 | -1.15% | ||||||
| - YTD gain 5897.81 - | 6546.7 | -3.00% | ||||||
| - 46 month gain5971.01 - | 6546.7 | 9.64% | ||||||
| - 58 month gain5412.88 - | 6546.7 | 20.95% | ||||||
| Transactions: | ||||||||
| 29/10/2014 | Div | Gen. Electric @ 11.43p per share | ||||||
| Notes: | ||||||||
| * US Dividends are adjusted for exchange rate and 15% withholding tax | ||||||||
| ** Sterling : Dollar exchange rate = £1: $1.59815 as at 31/10/14 | ||||||||
And the chart illustration of performance over the last 46 months.
 |
| Click to enlarge, close to return. |
So, it continues to be a tough year for my portfolio, but having trimmed Tesco, and Morrisons (and clearing some of my negativity), and adding new funds to the incoming dividends, I am now looking to add those funds back into the market which might yet see a year end rally.
And, whilst this year now looks to be one of, at best, consolidation, I am already looking beyond 2014 to next year.
To that effect I made my first re-investment yesterday adding Banco Santander to the fold, and this will show in November's Update.
Until next month...
Previous Posts:
- September 2014: Portfolio Update
- August 2014: Portfolio Update
- July 2014: Portfolio Update.
- June 2014: Portfolio Update.
- May 2014: Portfolio Update.
- April 2014: Portfolio Update.
- March 2014: Portfolio Update.
- 2013 Dividends profiled.
- February 2014: Portfolio Update
- January 2014: Portfolio Update
- December 2013: Portfolio Update.
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