Quality UK Investment Blog
22 May 2015
By Maynard Paton
Quick update on Tristel (TSTL).
Event: Trading update published 21 May.
Summary: At last — one of my shares has issued an ‘ahead of expectations’ trading statement! TSTL’s medical wipes appear to be selling very well and second-half profits now seem set to grow by 35%. There could be further upside, too, if TSTL’s past ‘sandbagging’ form is anything to go by. My valuation sums still suggest annual returns of 15%-plus could be earned. I continue to hold.
19 May 2015
By Maynard Paton
Today I’m continuing my hunt for Watch List shares with a look at Cenkos (CNKS).
Here are the initial attractions that prompted this research:
Lowly valuation: The P/E is 6 and the yield is 9%
Appealing accounts: Recent results showed high margins and net cash
Owner management: The directors control 23% of the business
As usual, I’m applying a question-and-answer template to help me pinpoint companies that match the criteria set out in How I Invest. I’m looking for as many Yes answers as possible.
13 May 2015
By Maynard Paton
Today I’m continuing my hunt for Watch List shares with a look at Numis (NUM).
Here are the initial attractions that prompted this research:
Appealing accounts: Recent results showed high margins and net cash
Dividend history: The payout has advanced 17-fold since 1999
Owner management: The directors control 21% of the business
As usual, I’m applying a question-and-answer template to help me pinpoint companies that match the criteria set out in How I Invest. I’m looking for as many Yes answers as possible.
06 May 2015
By Maynard Paton
Quick update on Andrews Sykes (ASY).
Event: Final results published 06 May
Summary: Results better than I had expected. A dismal first half was followed by a less dismal second half and the outlook for 2015 appears relatively promising. Accounts still showcase solid financials and I’m pleased ASY’s 90% owner continues to share the wealth through sizeable dividends. The yield is 7.9% at 300p. I continue to hold.
06 May 2015
By Maynard Paton
Today I’m continuing my hunt for Watch List shares with a look at Bioventix (BVXP).
Here are the initial attractions that prompted this research:
Super profitability: Operating margins were a stratospheric 67% in 2014
Asset rich: The balance sheet carries net cash and freehold property
Owner management: The chief exec owns 12% of the business
As usual, I’m applying a question-and-answer template to help me pinpoint companies that match the criteria set out in How I Invest. I’m looking for as many Yes answers as possible.
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.
23 April 2015
By Maynard Paton
Today I’m continuing my hunt for Watch List shares with a look at Dewhurst (DWHA).
Here are the initial attractions that prompted this research:
Loyal management: Dewhurst has been a family-run business since its formation in 1919
Rising dividend: The payout has advanced every year since at least 1999
Interesting valuation: The shares could offer a possible P/E of less than 8
As usual, I’m applying a question-and-answer template to help me pinpoint companies that match the criteria set out in How I Invest. I’m looking for as many Yes answers as possible.
15 April 2015
By Maynard Paton
Today I’m revealing one of the two new investments I’ve made during recent months.
The company in question is Mincon (MCON), a specialist engineer that designs, manufactures and sells drilling equipment for miners. I bought the shares during February and March 2015 at an average of 44.6p including all costs. The mid-price is now 54p.
All told, I feel this £114m Irish business is an excellent fit for my portfolio. Important attractions include a respectable competitive position, high margins, a cash-flush balance sheet and very favourable family management. A languishing share price and a possible P/E of just 10 also clinched it for me.
However, MCON is by no means perfect. In particular, the group is dependent on the vagaries of the mining sector, has an ambitious acquisition plan and does not boast the greatest of free cash flow.
A wide bid-offer spread and 71% boardroom ownership may put some people off, too.
14 April 2015
By Maynard Paton
Quick update on M Winkworth (WINK).
Event: Final results published 14 April
Summary: A quite satisfactory set of full-year results, albeit the second half produced flat profits. WINK has become slightly more dependent on the booming London property market, but its estate-agency franchising operation continues to produce super margins and high returns on equity. There are not many shares with such finacials that I have found that presently trade on a P/E of about 10. I continue to hold.
02 April 2015
By Maynard Paton
Today I’m continuing my hunt for Watch List shares with a look at Zytronic (ZYT).
Here are the initial attractions that prompted this research:
Appealing financials: Accounts showcase 15%-plus margins and an asset-rich balance sheet
Rising dividend: Payout has advanced 5-fold between 2005 and 2014
Interesting valuation: The shares could offer a possible P/E of 11
As usual, I’m applying a question-and-answer template to help me pinpoint companies that match the criteria set out in How I Invest. I’m looking for as many Yes answers as possible.
31 March 2015
By Maynard Paton
Happy Tuesday! I trust your shares are doing well and that you are finding my Blog useful.
It’s now been three months since I started this full-time investment lark — and I am pleased to confirm that I have not gone broke just yet!
On the contrary, my portfolio has registered a small gain since the start of the year — although I must admit it has lagged what’s generally been a strong market. I just hope some buyers will soon alight on my marooned holdings!
Anyway, during the last three months I have found writing this Blog very helpful. This quote from Warren Buffett sums up why:
“There is nothing like writing to force you to think and get your thoughts straight.”
30 March 2015
By Maynard Paton
Quick update on Tasty (TAST).
Event: Preliminary results published 30 March
Summary: A very promising set of results, buoyed by a strong second half. Notable features included robust cash flow and the clearing of some debt, which might suggest TAST is able to expand significantly without hefty external financing. Either way, I firmly believe the family management here can replicate its earlier success at Prezzo (PRZ) and could perhaps quadruple TAST’s current market cap. I continue to hold.
24 March 2015
By Maynard Paton
Quick update on Getech (GTC).
Event: Interim results and acquisition details published 24 March
Summary: A better-than-expected set of results that was blessed with a reasonable outlook statement — a pleasant surprise given GTC serves the battered oil and gas industry. Progress was not perfect, though, with sizeable intangible expenditure and details of a substantial acquisition leaving me on ‘amber alert’. I am minded to await further results before considering any top-up. I continue to hold.
20 March 2015
By Maynard Paton
Quick update on FW Thorpe (TFW).
Event: Interim results published 19 March
Summary: Good set of reliable figures with revenues, profits, the dividend and net cash all moving higher. Progress was made throughout the group’s different divisions, with sales of LED products apparently booming. A loss-making subsidiary has also been sold. I could find no accounting worries and wish all my investments could issue such dependable results. I continue to hold.
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.
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