Category Archives: My Sold Shares

Electronic Data Processing: ELEVEN Months On And The Strategic Review Has Gone Nowhere… And I Have Given Up Waiting

23 March 2017
By Maynard Paton

Quick update on Electronic Data Processing (EDP).

Event: Strategic review and pensions update issued 06 March 2017

Summary: Oh dear — EDP’s strategic review has not gone as well as I had hoped. The software minnow has taken ELEVEN months to finally own up to holding early-stage talks with just the one interested bidder. Other approaches have disappeared, due in part to unfavourable developments within the group’s defined-benefit pension scheme. I doubt EDP’s main shareholders can force anyone to bid and, without any sign of EDP having a Plan B, I have sold my entire holding. Continue reading

Year In Review 2016

01 January 2017
By Maynard Paton

Happy New Year!

I trust you enjoyed the festive break and are now raring to do battle with the market for another twelve months!

This first Blog post of 2017 provides a ‘year-in-review’ of my current portfolio holdings. I recap how each of the underlying businesses performed during 2016, as well as provide a few remarks about valuation.

As I mentioned this time last year, I find writing such reviews extremely useful — not least because it encourages me to double-check my investment logic to ensure I am still invested for all the right reasons! Continue reading

Electronic Data Processing: 8 Months On And I’m Still Waiting For A Buyer

20 December 2016
By Maynard Paton

Quick update on Electronic Data Processing (EDP).

Event: Preliminary results for the twelve months to 30 September 2016 published 20 December 2016

Summary: What a letdown! I had hoped EDP could announce the conclusion of its strategic review within these results, but no such luck I’m afraid. Instead, shareholders have been left in the dark about possible corporate action as the underlying business puts in another dismal revenue performance. The irony is this company actually develops software for others to improve sales! I can only hope 2017 will see a generous buyer emerge and I can then move on. I continue to hold. Continue reading

French Connection: I Have Finally Given Up On This Turnaround

20 September 2016
By Maynard Paton

Quick update on French Connection (FCCN).

Event: Interim results for the six months to 31 July 2016 published 20 September 2016

Summary: It’s taken me five years to realise that I have wasted my time with FCCN’s purported turnaround. The fashion chain’s latest results were very mixed, and I feel cash may now become tight if there is more bad news. I have belatedly concluded the problem Retail division could well lose money for some years ahead, while an activist investor may not be doing enough to instigate the necessary board changes. I have sold my entire holding. Continue reading

Electronic Data Processing: I Will Happily Swap This 6%-Plus Yield For A Generous Trade Buyer

06 June 2016
By Maynard Paton

Quick update on Electronic Data Processing (EDP).

Event: Interim results for the six months to 31 March 2016 published 02 June 2016

Summary: This was another lacklustre update from the software micro-cap. It was disappointing in particular to see revenue continuing to stagnate and — despite various cost-cutting measures of the past — operating profit dropping lower. Thankfully EDP has put itself up for sale and I am very hopeful a generous trade buyer can be found to conclude what has been a somewhat frustrating investment. In the meantime, there is the prospect of a 6%-plus yield to collect. I continue to hold. Continue reading

French Connection: The Cash Pile Really Can’t Afford Another £9m Outflow

15 March 2016
By Maynard Paton

Quick update on French Connection (FCCN).

Event: Preliminary results for the year to January 2016 published 15 March

Summary: An improved set of figures following last year’s awful interims. However, the numbers do suggest FCCN experienced a weaker Christmas while the cash pile really can’t afford another £9m outflow. Online sales were miserable, too. Still, Retail gross margins during H2 were the highest since 2011 and new board members may well help the moribund management. This value investment still requires inordinate patience… and I continue to hold Continue reading

My Portfolio: Year In Review 2015

01 January 2016
By Maynard Paton

Happy New Year!

I trust you enjoyed the festive break and are now raring to do battle with the market for another twelve months!

This first Blog post of 2016 provides a short ‘year-in-review’ of each of my current portfolio holdings.

As I mentioned at the start of 2015, I find writing such reviews extremely useful — not least because it encourages me to double-check my investment logic to ensure I am still invested for all the right reasons!

Continue reading

Electronic Data Processing: I’m Collecting A 7.9% Yield And Trusting A Trio Of Investors Will (Eventually) Take Action

11 December 2015
By Maynard Paton

Quick update on Electronic Data Processing (EDP).

Event: Preliminary results published 11 December

Summary: As expected, this dull software microcap reported no miracles. Cost savings should underpin the firm’s near-term progress, but revenue growth remains as elusive as ever.  At least  EDP still enjoys plenty of recurring income and has committed again to a hefty 5p per share dividend. I’m trusting the trio of North American funds that hold 28% of this stock will one day stir-up some corporate action so we can all exit at an advantageous price. I continue to hold.

Continue reading

French Connection: Wow — £2.4m Compensation For Closing A Loss-Making Store!

30 November 2015
By Maynard Paton

Quick update on French Connection (FCCN).

Event: Trading statement published 30 November

Summary: Phew! A pleasantly surprising update that revealed stable trading and a signal that losses could be narrowing. However, the most welcome news was the redevelopment of the group’s loss-making Regent Street store, for which compensation of £2.4m will be received from the landlord. I just wish FCCN could be paid off for all of its under-performing shops! I continue to hold.

Continue reading

French Connection: Grim Figures Confirm Basket-Case Status

21 September 2015
By Maynard Paton

Quick update on French Connection (FCCN).

Event: Interim results published 21 September

Summary: A grim set of figures that had been flagged by an earlier profit warning. News of further store closures and maintained gross margins were reassuring in the circumstances, but the real saving grace was the relatively positive outlook for the second half. There’s still a chance this share could one day prove to be a bargain, but for now its basket-case status remains intact. I continue to hold.

Continue reading

French Connection: Reasons To Keep Holding (As Well As Avoid!) This Frustrating Investment 

Today I’m summarising my current thoughts on French Connection (FCCN), a small-cap fashion retailer that continues to suffer from poor trading and which remains an under-whelming investment in my portfolio.

You can read my earlier Blog posts on FCCN here. But to cut to the chase, a trading statement in April owned up to weak retail sales and it’s likely the current year will witness FCCN’s seventh overall annual loss in eight years.

One day I’m sure a sustained turnaround here could deliver an exceptional share-price gain — although there is the real chance this company may never actually turn…

Anyway, prompted by FCCN’s share price falling steeply of late, I’ve weighed up the various pros and cons of what has become a very frustrating business and investment. Just to confirm, I continue to hold the shares.

Continue reading

Electronic Data Processing: I’ll Just Have To Make Do With The Uncovered 7.2% Income

26 May 2015
By Maynard Paton

Quick update on Electronic Data Processing (EDP).

Event: Interim results published 26 May.

Summary: Another rather dull update from this rather dull software microcap. These results were a little disappointing on the revenue and profit fronts, but at least there was some useful progress on the balance sheet. One day I trust EDP’s business can advance significantly and provide some long-awaited excitement. Until then I’ll just have to make do with the uncovered 7.2% dividend yield. I continue to hold.

Continue reading

French Connection: Profit Warning Means Radical Action Is Now Required

24 April 2015
By Maynard Paton

Quick update on French Connection (FCCN).

Event: Trading update published 24 April

Summary: Profit warning — poor H1 Retail sales will mean greater-than-expected group losses this year. However, the profitable Wholesale and Licensing divisions continue to perform as expected. Turnaround possibilities remain, but the protracted wait has become just that bit longer once again. What’s needed now is some radical management action. I continue to hold. 

Continue reading

Pennant International: Why I Sold

20 March 2015
By Maynard Paton

Quick update on Pennant International (PEN).

Event: Annual results published 17 March

Summary: Headline results as expected, but they hid a weaker second half and some disconcerting cash-flow movements. The figures contained plenty of other irritations and worries, while the chairman’s statement was notable for what it did not say. All told, the results carried too many signs of profit trouble ahead and I sense PEN could return to its haphazard ways witnessed between 2000 and 2009. I have sold.

Continue reading

French Connection: I Still Think The Shares Could Top 100p

17 March 2015
By Maynard Paton

Quick update on French Connection (FCCN).

Event: Annual results published 17 March

Summary: Mixed results. The Retail division was subdued, and gave a disappointing second-half performance. However, trading at the Wholesale and Licensing divisions appeared promising. There was further welcome progress on cost cutting, too. This turnaround has still to really turn, and I’ve trimmed my recovery assumptions. But the upside potential remains sizeable. I continue to hold. 
Continue reading

Pennant International: Why I Bought A 12-Bagger

27 January 2015
By Maynard Paton

It’s not often I look at a 12-bagger and decide it’s still worth buying.

But that is exactly what happened when I pinpointed Pennant International (PEN) the other year.

To cut to the chase, this £23m military equipment specialist had suffered badly during the banking crash and the shares had plunged to 6p. But then a succession of upbeat results and contract wins eventually caught me eye and I bought in at 74p during October and November 2013.

What particularly appealed to me was the group landing its largest-ever contract alongside results that spoke of “good prospects for the short, medium and long term”. It’s quite rare to see such ‘multi-horizon’ optimism within a company RNS!

Also prompting me to buy were management’s sizeable shareholding, the firm’s asset-flush balance sheet, a focus on organic growth and a lowly market valuation.

While PEN’s expansion looks to have paused temporarily in 2014, the group’s overall prospects remain positive and I’m pleased to say the appealing executives, financials and valuation remain in place today. Continue reading

Burford Capital: I’m Projecting 9.1% Annualised Returns To 2019

23 January 2015
By Maynard Paton

*** EDIT: 26 FEB 2015: I HAVE SINCE SOLD THIS SHARE. PLEASE READ THE COMMENT SECTION AT THE END OF THE POST *** 

Time now to delve into Burford Capital (BUR), a £266m litigation-financing business that joined my portfolio following some very scant research.

The basis of my investment was:

  • Litigation funding was a nascent, fast-growing industry. At the time, BUR said business was “booming”.
  • The firm was claiming fantastic returns on invested capital (some 70%!).
  • I assumed BUR’s operations would not be affected by recessions or market crashes.
  • A corporate reorganisation had aligned the main executives with shareholders.
  • The shares traded at book value.
  • Good future progress might see the shares re-rated well above book value.
  • A fund managed by ace investor Neil Woodford owned 45%.

It wasn’t in-depth stuff and luckily I’ve managed to enjoy a reasonable return. I bought between November 2012 and February 2013 at an average of 101p, and I then sold 51% of my holding at 120p between October 2013 and January 2014. The recent market price is 130p.

However…I don’t like to rely on scant research with my investments. So I’ve finally got to grips with BUR and its convoluted accounts to gauge the opportunity ahead, and in particular to understand…

…why the company’s fantastic returns on invested capital haven’t translated into fantastic share-price growth! Continue reading

Electronic Data Processing: This Obscure, Dull Small-Cap Should Pay Me An 8% Income

15 January 2015
By Maynard Paton

Legendary American investor Peter Lynch was always very keen on dull small-caps with dull names and dull operations. His theory was that such obscure businesses would not attract much industry competition or market enthusiasm, and so would be better investments for patient investors.

Electronic Data Processing (EDP) certainly has the dull name and the dull operations, but sadly its dull financial history has meant its share price has also been, well, rather dull.

But don’t stop reading just yet!

…because this small-cap dullard intends to pay a 5p dividend in future years — and shareholders such as me remain in line to collect a not-so-dull 8%-plus income.

Additional excitement comes in the form of EDP’s cost-saving measures, which I reckon could support an underlying P/E of just 6.

In fact, if you mix in contracted revenues, surplus assets, upfront customer payments — plus an intriguing shareholder register — then all of a sudden this £8m software supplier to builders merchants might not be that dull after all. Continue reading

Why I Believe French Connection Can Triple My Money

08 January 2015
By Maynard Paton

Today I am going to explain why I believe the shares of French Connection (FCCN) can one day triple my money.

Before you become too excited, let me say that my average buy price here is 31p — as compared to the recent market price of 55p.

Nonetheless, I believe there is still good upside to be had and I reckon the shares could trade above 100p if all goes to plan during the next few years.

However, this £53m fashion chain is by no means a one-way bet.

In particular, the group’s track record is extremely haphazard and I would not rule out further setbacks occurring. A quality buy-and-forget investment it is not. Continue reading