Wednesday 4 October 2017
Monday 11 September 2017
Queens Gate Fund
11/9/17
This is a portfolio of shares that I have been selecting and very recently bought. It's a growth portfolio, mainly consisting of small and medium companies, which have been screened using the following filters:
1. Stockopedia Stock Rank (SR) > 80.
2. Quality Rank (Stockopedia) > 70.
3. Price within 10% of Ben Graham's Rule of Thumb.
4. ROCE > 10% (preferably 15%).
5. P/E < 3 yr earnings growth rate (egr).
6. Rising sales/ turnover, profit, eps, free cashflow, (dividends).
7. Piotroski >6, Altman Z score >3.
8. Quick ratio>1, Current ratio >1.2.
8. Low risk of earnings manipulation.
9. FCS ps > norm eps and div ps.
10. Net debt < x3 net profit.
11. Stable margins.
12. Director buying/selling reasonable.
13. Reasonable share dilution.
14. Positive company outlook.
15. Other investors seem comfortable with investment.
The aim of the filters is to identify companies which are growing in terms of turnover, profits, earnings per share and cash. They must have a strong balance sheet, not be overly diluting equity and the directors not selling en mass.
There is a small amount of discretion, if a company just misses the mark on one or two of the filters, it might still be acceptable. Director buying/selling and other investors views is difficult to quantify.
There are 14 companies: AMO, CAKE, FOUR, GAW, IGR, MACF, PETS, PLP, PSN, XLM, SOM, STAF, STHR, TAP.
I have tried to diversify and invested £3,000 in each company. The portfolio is available on Stockopedia as Edwinlefever's/ Queens Gate Fund.
This is a portfolio of shares that I have been selecting and very recently bought. It's a growth portfolio, mainly consisting of small and medium companies, which have been screened using the following filters:
1. Stockopedia Stock Rank (SR) > 80.
2. Quality Rank (Stockopedia) > 70.
3. Price within 10% of Ben Graham's Rule of Thumb.
4. ROCE > 10% (preferably 15%).
5. P/E < 3 yr earnings growth rate (egr).
6. Rising sales/ turnover, profit, eps, free cashflow, (dividends).
7. Piotroski >6, Altman Z score >3.
8. Quick ratio>1, Current ratio >1.2.
8. Low risk of earnings manipulation.
9. FCS ps > norm eps and div ps.
10. Net debt < x3 net profit.
11. Stable margins.
12. Director buying/selling reasonable.
13. Reasonable share dilution.
14. Positive company outlook.
15. Other investors seem comfortable with investment.
The aim of the filters is to identify companies which are growing in terms of turnover, profits, earnings per share and cash. They must have a strong balance sheet, not be overly diluting equity and the directors not selling en mass.
There is a small amount of discretion, if a company just misses the mark on one or two of the filters, it might still be acceptable. Director buying/selling and other investors views is difficult to quantify.
There are 14 companies: AMO, CAKE, FOUR, GAW, IGR, MACF, PETS, PLP, PSN, XLM, SOM, STAF, STHR, TAP.
I have tried to diversify and invested £3,000 in each company. The portfolio is available on Stockopedia as Edwinlefever's/ Queens Gate Fund.
Friday 1 September 2017
31/8/17
Trade 5- Proactis PHD 570 shares bought at 178p (SL 149), £1020 (£5 comm). Bought in isa, as spread for spb was 6%.
Reasons- Growth company mc 167 mill (computer/software services). Trading update 22/8 v pos. P/E 15, peg 0.6, 1% y, roce 6%, z 7, pit 4, cr 0.6. No recent dir buy/sells. News/research pos.
The roce is far less than I would like and the Pit score and cr are also low. It's the low peg and the positive trading statement that have attracted me.
1/9/17
Trade 6- Everyman (EMAN) 606 bought at 167p (SL 139), £1010, £10 comm.
Reasons- Growth company (posh cinemas) mc ~90 mill. P/E 31 peg 0.6, roce 1.4%, pit 7, z 6, cr 0.6. Dir buying in April. Half yearly report (1/9) pos, news/research pos.
This is a roll-out. The p/e is higher than I like and the roce paltry. I did quite well with Prezzo, set up by the same entrepreneurs (less well with Tasty). The roce would have to be higher for me to invest longer term. The peg, outlook and director buying have influenced me. A better price would have been good; I was tempted after the trading statement in July, but dithered and then forgot.
Trade 5- Proactis PHD 570 shares bought at 178p (SL 149), £1020 (£5 comm). Bought in isa, as spread for spb was 6%.
Reasons- Growth company mc 167 mill (computer/software services). Trading update 22/8 v pos. P/E 15, peg 0.6, 1% y, roce 6%, z 7, pit 4, cr 0.6. No recent dir buy/sells. News/research pos.
The roce is far less than I would like and the Pit score and cr are also low. It's the low peg and the positive trading statement that have attracted me.
1/9/17
Trade 6- Everyman (EMAN) 606 bought at 167p (SL 139), £1010, £10 comm.
Reasons- Growth company (posh cinemas) mc ~90 mill. P/E 31 peg 0.6, roce 1.4%, pit 7, z 6, cr 0.6. Dir buying in April. Half yearly report (1/9) pos, news/research pos.
This is a roll-out. The p/e is higher than I like and the roce paltry. I did quite well with Prezzo, set up by the same entrepreneurs (less well with Tasty). The roce would have to be higher for me to invest longer term. The peg, outlook and director buying have influenced me. A better price would have been good; I was tempted after the trading statement in July, but dithered and then forgot.
Wednesday 30 August 2017
30/8/17
Trade 4- IG Design IGR. £3 at 388p (dec 17), SL 312. Growth company.
Reasons; I had dismissed this company as an investment in the past, thinking it was a commodity type industry. Now I've looked at it more carefully, it seems to be a design company. This might not give it a strong moat, but it has something.
Fundamentals; p/e 18, peg 1.1, eps rolling 21%, forecast 1yr- 30%, 2yr- 11%. Y 1.5%, SR 95, ROCE 15%, cr 1.4, Z 5, pit 7. Eps cagr 4yrs 19%. Outlook (29/8) positive, no director buy/sell, news/research good.
So this is about a 20% eps grower with appropriate p/e. Outlook 29/8 positive. Seems like a good candidate for short/medium term trade.
Trade 4- IG Design IGR. £3 at 388p (dec 17), SL 312. Growth company.
Reasons; I had dismissed this company as an investment in the past, thinking it was a commodity type industry. Now I've looked at it more carefully, it seems to be a design company. This might not give it a strong moat, but it has something.
Fundamentals; p/e 18, peg 1.1, eps rolling 21%, forecast 1yr- 30%, 2yr- 11%. Y 1.5%, SR 95, ROCE 15%, cr 1.4, Z 5, pit 7. Eps cagr 4yrs 19%. Outlook (29/8) positive, no director buy/sell, news/research good.
So this is about a 20% eps grower with appropriate p/e. Outlook 29/8 positive. Seems like a good candidate for short/medium term trade.
Tuesday 29 August 2017
28/8/17
Introduction
This is a trading diary. It is not intended as financial advice, more as an insight into my thought processes with each new trade and, also, as a record. I am a discretionary trader/investor, trying to adopt an approach in keeping with the masters Peter Lynch, Jim Slater and Warren Buffet. The resources mainly used include Stockopedia, Sharelockholmes and Google Finance. I intend to keep this diary going for 1 month.
29/8/17
The following trades are short/medium term and based upon eps growth with recent positive trading updates. The idea behind the trade is that if the fundamentals are sound and the recent updates from the company are positive then there might be a period of a few months when the share price rises. It is similar to Jim Slater's peg strategy. There are several factors of interest; the Stockopedia Stock Rank (SR), the eps growth over the last 2/3 years along with the 1-2 year forecast, the peg and the company's own stated outlook. All are positives for the share price, but there may be a dichotomy between the SR and the peg. The balance sheet must be strong and the director selling not great. The trades are an attempt to determine if there is a potentially successful strategy here. Consequently, only small amounts are traded as spreadbets (spb).
Trade 1- Quixant QXT £3 per point at 438p (SL 349) dec '17. This is a growth company involved in software/gaming, mark cap £284 mill.
Reasons for trade: P/E (f) 25.5, peg 1.4, rolling eps 23%, forecast eps growth positive. ROCE 28%, Piotroski score 7, Altman Z 11, current ratio 2, Stock Rank (Stockopedia) 58. Trading update 24/7 v positive, some director selling. Research/news positive. The price rose about 13% in the days following the update, but has now dropped back somewhat. It seems reasonably priced for growth, but has neither a high SR, nor low peg.
Trade 2- Taylor Wimpey TW. £5 per point at 197 (SL 157) dec '17. Cyclical company (builder).
Reasons for trade: P/E 9.7, peg 1.3, roll eps 8%, forecast eps 7% '17, 9% '18. ROCE 20%, Pit 8, Z 10. curr ratio 3.3. Half year report 1/8 v positive. Director selling earlier in year. Research/news okay. Stockopedia stock rank 99.
Cyclical companies are easy to get wrong. The low p/e indicates top of cycle, but the company outlook is positive. The eps forecasts aren't great and the directors have been selling. The stock rank is high (99) but the peg is >1 (1.3). Perhaps I've been influenced too greatly by the outlook and the SR. It will be interesting to see what happens to the share price.
Trade 3- Morgan Sindell MGNS. £1 per point at 1258 (SL 1008) dec '17. Cyclical (construction) mc £559 mill.
Reasons for trade: P/E 11.2, eps roll 15%, peg 0.9, ROCE 17%, pit 8, Z 1.7, curr ratio 1. Stock Rank (SR) 99. Half year report v pos (8/8), price has dropped since then. Directors buying. Forecast eps rising. Research/news good. This trade seems to tick all the boxes and it will be interesting to see how it compares to TW.
So there are the first few trades. They won't all be using this strategy, but I will explain the theory behind any trade or investment made. It's been useful to write out the reasons for each trade and to reflect. Hopefully, this will improve my skills (such as they are) as an investor. A profit/loss account will be updated to measure the trading performance.
Introduction
This is a trading diary. It is not intended as financial advice, more as an insight into my thought processes with each new trade and, also, as a record. I am a discretionary trader/investor, trying to adopt an approach in keeping with the masters Peter Lynch, Jim Slater and Warren Buffet. The resources mainly used include Stockopedia, Sharelockholmes and Google Finance. I intend to keep this diary going for 1 month.
29/8/17
The following trades are short/medium term and based upon eps growth with recent positive trading updates. The idea behind the trade is that if the fundamentals are sound and the recent updates from the company are positive then there might be a period of a few months when the share price rises. It is similar to Jim Slater's peg strategy. There are several factors of interest; the Stockopedia Stock Rank (SR), the eps growth over the last 2/3 years along with the 1-2 year forecast, the peg and the company's own stated outlook. All are positives for the share price, but there may be a dichotomy between the SR and the peg. The balance sheet must be strong and the director selling not great. The trades are an attempt to determine if there is a potentially successful strategy here. Consequently, only small amounts are traded as spreadbets (spb).
Trade 1- Quixant QXT £3 per point at 438p (SL 349) dec '17. This is a growth company involved in software/gaming, mark cap £284 mill.
Reasons for trade: P/E (f) 25.5, peg 1.4, rolling eps 23%, forecast eps growth positive. ROCE 28%, Piotroski score 7, Altman Z 11, current ratio 2, Stock Rank (Stockopedia) 58. Trading update 24/7 v positive, some director selling. Research/news positive. The price rose about 13% in the days following the update, but has now dropped back somewhat. It seems reasonably priced for growth, but has neither a high SR, nor low peg.
Trade 2- Taylor Wimpey TW. £5 per point at 197 (SL 157) dec '17. Cyclical company (builder).
Reasons for trade: P/E 9.7, peg 1.3, roll eps 8%, forecast eps 7% '17, 9% '18. ROCE 20%, Pit 8, Z 10. curr ratio 3.3. Half year report 1/8 v positive. Director selling earlier in year. Research/news okay. Stockopedia stock rank 99.
Cyclical companies are easy to get wrong. The low p/e indicates top of cycle, but the company outlook is positive. The eps forecasts aren't great and the directors have been selling. The stock rank is high (99) but the peg is >1 (1.3). Perhaps I've been influenced too greatly by the outlook and the SR. It will be interesting to see what happens to the share price.
Trade 3- Morgan Sindell MGNS. £1 per point at 1258 (SL 1008) dec '17. Cyclical (construction) mc £559 mill.
Reasons for trade: P/E 11.2, eps roll 15%, peg 0.9, ROCE 17%, pit 8, Z 1.7, curr ratio 1. Stock Rank (SR) 99. Half year report v pos (8/8), price has dropped since then. Directors buying. Forecast eps rising. Research/news good. This trade seems to tick all the boxes and it will be interesting to see how it compares to TW.
So there are the first few trades. They won't all be using this strategy, but I will explain the theory behind any trade or investment made. It's been useful to write out the reasons for each trade and to reflect. Hopefully, this will improve my skills (such as they are) as an investor. A profit/loss account will be updated to measure the trading performance.
Subscribe to:
Posts (Atom)