Wednesday 10 December 2014

Filling up on BP.

BP @ 404.25p, -1.70p (-0.42%)

The long running saga of BP's return to acceptance and a place amongst its peers continues.
However, with the recent surrender in the barrel of a price of oil from around $115 to the present $65 (a 5 year low we are told), perhaps the detailed assessment of its assets and global footprint, along with its divestment program (to make recompense for the Gulf of Mexico tragedy), might put it in a strong position to address a lower oil price.
I say lower, but it really doesn't seem that long ago that the price of a barrel of oil was firmly stuck at $25 and I recall BP using a surplus of profits (from anything over $25), to buyback shares.

Today also saw BP begin to communicate its strategy to the end of the decade (www.bp.com: BP Presents Upstream Strategy to Investors), along with the announcement of a cost cutting and restructuring program to meet the outlook for a lower oil price (www.reuters.com: BP to spend $1 billion on hundreds of job cuts, restructuring).

Anyway, that being the case, and the resultant bombing out of the oil and energy resource sector (surely a short term reaction), I am taking the opportunity to add to my holding in BP, in the hope that this is a near bottom in the price of oil and sentiment towards the sector. Although repairing sentiment to BP remains a longer work in progress and perception.

It goes without saying that I am assuming that the near 6% yield can be maintained and add to my returns in the coming year.

The transaction does also help to reduce the cash portion of my portfolio to around 5.2% (7.57% as at my November 2014: Portfolio Update.).

Monday 8 December 2014

November 2014: Portfolio Update.

So heading into Christmas and the year end milestone, my portfolio finds itself still in negative territory for the year having hit its recorded all time high at the end of last year.
A difficult year or one of consolidation where it has, to date, ranged from -5.60% down to -0.34% down in the year.
The truth is probably somewhere between the two, and a mixture, as some sectors and company specifics have clearly under-performed with R-R the notable impact upon my portfolio. 
Pleasing then that despite a -32.68% performance in the year to date of R-R, my portfolio is just -1.64% down against its all time high, leaving it in with a chance of finishing in positive territory should there be a year-end rally in markets and sentiment.
It does feel like I have taken my eye of things a little this year, or at least stepped back from things, and coupled with my longer term strategy, I have to admit to being a little slow in topping up my portfolio with new or existing holdings which leaves me with around 7.5% cash. 
But, there has been one addition this month, that being Banco Santander. Its main attraction being its dividend (less 21% Spanish withholding tax), but also for a long running recovery in its national, european, and south american markets.
There has been quite a lot discussed around the dividend but it has been maintained through a difficult time, and has a little support through the option of a scrip in place of cash. Which, as long as the share price has support, helps reduce the liability of actually paying cash out of assets, albeit with a dilution of entitlement due to an increase in shares in issue.

Anyway back to the update and, as mentioned my portfolio is still down, by -1.64% in the year to date, despite a 2.22% increase in the month.
This is still down on the resurgent FTSE which recorded a 2.69% increase to finish -0.39% down

Dividends came in from Verizon, Aviva, Centrica, Apple, IG, and Barrat's, so it was a useful month for dividends with Aviva, and IG the notable contributors.
There were also some useful share price gains around the 10% mark from Apple, Vodafone, IG, Imperial Tobacco, and Banco.
Along with a disappointing drop in BG of -13%, as it took a one-two hit on pay for its new CEO, and a continuing fall in the oil price affecting the value of its assets.



Merchant Adventurer's Index
Forecast
1 month
YTD
47 mth
Price
% holding
Div. yield
% gain
% gain
% gain
R-R
842.50p
22.39%
3.02%
-0.06%
-32.68%
28.34%
National Grid
930.00p
15.02%
4.66%
0.43%
18.02%
68.17%
Aviva
508.00p
10.95%
3.78%
-2.50%
12.96%
50.35%
BP
420.20p
4.49%
5.93%
-6.41%
-13.90%
-7.24%
Apple **
$118.93
8.72%
1.40%
12.49%
56.59%
108.80%
Vodafone
233.95p
2.35%
4.86%
12.86%
-7.27%
-7.27%
Verizon **
3233.62p
1.55%
3.73%
2.84%
16.51%
16.51%
IG Group
677.50p
4.47%
4.22%
12.73%
9.98%
41.97%
William Hill
335.00p
2.80%
3.79%
-7.07%
-16.65%
81.89%
Imperial Tobacco
2960.00p
3.05%
4.74%
9.18%
26.60%
31.03%
BAT
3794.50p
2.64%
4.15%
6.98%
17.19%
13.13%
General Electric **
$26.49
2.02%
2.66%
4.84%
-0.26%
73.12%
Microsoft **
$47.81
2.31%
2.01%
4.02%
34.81%
70.70%
BAE Systems
481.10p
1.76%
4.34%
4.88%
10.60%
45.79%
Centrica
284.60p
1.31%
6.38%
-5.92%
-18.15%
-14.17%
SSE
1640.00p
1.66%
5.48%
2.56%
19.71%
33.88%
BG Group
900.20p
0.96%
2.27%
-13.44%
-30.62%
-30.54%
Barrat Dev.
460.30p
1.51%
3.09%
9.91%
28.77%
28.77%
Banco Santander
577.50p
2.47%
6.24%
8.76%
5.83%
5.83%
Cash
7.57%
0.00%
100.00%
3.47%
1 Month
YTD
47 mth
Virtual Portfolio gain (incl. Dividends)
- 1 m gain          2058.40 -
2104.11
2.22%
- YTD gain        1644.62 -
2104.11
-1.64%
- 47 m gain       1264.20 -
2104.11
66.44%
- 59 m gain       1000.00 -
2104.11
110.41%
FTSE gain (excl. Dividends)
- 1 m gain         6546.70 -
6722.62
2.69%
- YTD gain        5897.81 -
6722.62
-0.39%
- 47 m gain       5971.01 -
6722.62
12.59%
- 59 m gain       5412.88 -
6722.62
24.20%
Transactions:
03/11/2014
Buy
Banco Santander @ 545.71p per share
05/11/2014
Div
Verizon @ 29.12p per share
15/11/2014
Div
Centrica @ 5.10p per share
17/11/2014
Div
Aviva @ 5.85p per share
17/11/2014
Div
Apple @ £1.7586 per share (est)
18/11/2014
Div
IG Group @ 22.4p per share
20/11/2014
Div
Barrat Dev. @ 7.1p per share
Notes: 
*     US Dividends are adjusted for exchange rate and 15% withholding tax
**   Sterling : Dollar exchange rate = £1: $1.5645 as at 28/11/14
***  Banco Dividends are adjusted for exchange rate and 21% withholding tax
**** Sterling : Euro exchange rate = £1: $1.25643 as at 28/11/14




Click to enlarge, close to return.




Chartwise is much the same as it has been albeit with a much stronger trend with both indices bouncing along in a channel just below the 2013 year-end position.

But also appearing to maintain some link to the longer term trend. 
I am not conversant with technical analysis but the trend and the channel would appear to be narrowing and forming some kind of pinch point which I'm sure the more proficient technical analysts would suggest could mark a break-out of the current channel but that could be one of of two ways, up or down.
Hopefully, if the long term trend is intact then this could be a break upwards but we shall have to wait and see.

Click to enlarge, close to return.

So December to come and the end of 2014. December has already seen a little movement up, which would be nice if it can continue and give me a positive year, but if it doesn't then I will hope for opportunities to reduce my cash holdings as we start to look towards 2015.