Sunday, March 21, 2004
Gotcha. Monday saw me add a fourth stock to my portfolio, Mayborn was duly purchased first thing at 282p. I say, 'first thing' but in fact at least half a dozen trades had gone through before mine and unfortunately the price had ticked up before my order was put through.
Mayborn enjoyed a bumpy week before ending in the range I purchased at. Friday saw a large amount of shares traded and a 3.8% rise, possibly thanks to an Investor's Chronicle BUY recommendation.
Mayborn's shares have already shot up by 31 per cent since we tipped buying them at 221p, as one of our Tips of the Year (9 Jan 2004). But earnings upgrades mean they are still only rated on 11 times 2004's earnings estimates. With gearing low and further growth anticipated, they remain attractive. Buy.
At the last examination on January 26, my portfolio looked like this:
BBC: Ben Bailey 1281 shares on 20/02/03 at 178p (£5,546.73)
CHU: Chaucer Holdings 8092 shares on 06/10/03 at 42.88p (£3,560.48)
DNX: Dana Petroleum 1551 shares on 20/11/03 at 223.75p (£4,110.15)
Cash holdings (£6250.89)
Updating for the latest prices and my new Mayborn holding:
BBC: Ben Bailey, 1281 shares on 20/02/03 at 178p (458p, £5,886.98)
CHU: Chaucer Holdings, 8092 shares on 06/10/03 at 42.88p (49p, £3965.08)
DNX: Dana Petroleum, 1551 shares on 20/11/03 at 223.75p (242p, £3753.42)
MBY: Mayborn Group, 1406 shares on 15/03/04 at 282p (275p, £3866.50)
Cash holdings: £2256.62
a grand total just short of £20,000.
Notably, this week saw one of my targets, BRIT Insurance fall to my target BUY price. I was rather hasty in attributing a fair value of 108p to BRIT. That looks rather rich on comparing price against earnings with BRITs industry peers, so I'll be lowering the target price from 82p. BRIT reported annual earnings of 6.58p per share and a net asset value of 72p earlier this month. I'm not sure how best to value this company but when I've worked it out, you'll hear from me.
The Artful Dodger
(0) comments
Mayborn enjoyed a bumpy week before ending in the range I purchased at. Friday saw a large amount of shares traded and a 3.8% rise, possibly thanks to an Investor's Chronicle BUY recommendation.
Mayborn's shares have already shot up by 31 per cent since we tipped buying them at 221p, as one of our Tips of the Year (9 Jan 2004). But earnings upgrades mean they are still only rated on 11 times 2004's earnings estimates. With gearing low and further growth anticipated, they remain attractive. Buy.
At the last examination on January 26, my portfolio looked like this:
BBC: Ben Bailey 1281 shares on 20/02/03 at 178p (£5,546.73)
CHU: Chaucer Holdings 8092 shares on 06/10/03 at 42.88p (£3,560.48)
DNX: Dana Petroleum 1551 shares on 20/11/03 at 223.75p (£4,110.15)
Cash holdings (£6250.89)
Updating for the latest prices and my new Mayborn holding:
BBC: Ben Bailey, 1281 shares on 20/02/03 at 178p (458p, £5,886.98)
CHU: Chaucer Holdings, 8092 shares on 06/10/03 at 42.88p (49p, £3965.08)
DNX: Dana Petroleum, 1551 shares on 20/11/03 at 223.75p (242p, £3753.42)
MBY: Mayborn Group, 1406 shares on 15/03/04 at 282p (275p, £3866.50)
Cash holdings: £2256.62
a grand total just short of £20,000.
Notably, this week saw one of my targets, BRIT Insurance fall to my target BUY price. I was rather hasty in attributing a fair value of 108p to BRIT. That looks rather rich on comparing price against earnings with BRITs industry peers, so I'll be lowering the target price from 82p. BRIT reported annual earnings of 6.58p per share and a net asset value of 72p earlier this month. I'm not sure how best to value this company but when I've worked it out, you'll hear from me.
The Artful Dodger
Sunday, March 14, 2004
At last.
I've discovered a share I am happy to buy at the price it is trading currently.
Mayborn is a babycare and household products supplier with a market capitalisation of £61m. Mayborn reported a storming year last week, with earnings per share of 23.7p against Friday's closing price of 277.5p. That's a P/E of approximately twelve. At first glance that's a little rich for me, but there are plenty of reasons to believe Mayborn can improve on this figure in 2004.
The sharp increase in earnings reported last Wednesday was driven by:
the outlook statement contained more positives:
"Gearing was substantially reduced following excellent cash generation. The current year has started satisfactorily. Your Board is confident that 2004 will be another year of progress."
If debt can be wiped out entirely in 2004 (it will be if the current redemption rate can be maintained) earnings should rise approximately ten percent, all other factors remaining equal. However, there is reason to expect increased savings as more production is moved to China and a further rise in revenue from Steribottle, a pre-sterilised baby bottle.
This considered, along with an analysis of the full year results:
http://moneyam.uk-wire.com/cgi-bin/articles/200403100700113420W.html
I make fair value for Mayborn 338p. This is less than my usual thirty percent discount to fair value but 338p is a conservative estimate, based on the growth achieved thus far and the falling debts. More positive earnings news or a further decline in the value of the US dollar will see me advance this target figure.
Providing I'm out of my cot in time I will be spending £4000 on Mayborn shares tomorrow morning. As of tomorrow, for the first time since I began investing I will be working with a four share portfolio, incorporating oil exploration, housebuilding, insurance underwriting and baby products.
The Artful Dodger
(0) comments
I've discovered a share I am happy to buy at the price it is trading currently.
Mayborn is a babycare and household products supplier with a market capitalisation of £61m. Mayborn reported a storming year last week, with earnings per share of 23.7p against Friday's closing price of 277.5p. That's a P/E of approximately twelve. At first glance that's a little rich for me, but there are plenty of reasons to believe Mayborn can improve on this figure in 2004.
The sharp increase in earnings reported last Wednesday was driven by:
- a 10% increase in turnover
- no reorganisation costs versus last year's £1.3m
- a halving in debt
- £2.3m being spent on share buy-backs, thus accelarating earnings attributable to shareholders for a lesser increase at the bottom line
- Babycare Products division experiencing a surging profit
- Cost savings thanks to transferring production to China
the outlook statement contained more positives:
"Gearing was substantially reduced following excellent cash generation. The current year has started satisfactorily. Your Board is confident that 2004 will be another year of progress."
If debt can be wiped out entirely in 2004 (it will be if the current redemption rate can be maintained) earnings should rise approximately ten percent, all other factors remaining equal. However, there is reason to expect increased savings as more production is moved to China and a further rise in revenue from Steribottle, a pre-sterilised baby bottle.
This considered, along with an analysis of the full year results:
http://moneyam.uk-wire.com/cgi-bin/articles/200403100700113420W.html
I make fair value for Mayborn 338p. This is less than my usual thirty percent discount to fair value but 338p is a conservative estimate, based on the growth achieved thus far and the falling debts. More positive earnings news or a further decline in the value of the US dollar will see me advance this target figure.
Providing I'm out of my cot in time I will be spending £4000 on Mayborn shares tomorrow morning. As of tomorrow, for the first time since I began investing I will be working with a four share portfolio, incorporating oil exploration, housebuilding, insurance underwriting and baby products.
The Artful Dodger
Tuesday, March 09, 2004
Opportunities for investment will always exist on the UK stock exchange. No matter how badly listed companies in one sector are faring, some companies elsewhere will be making hay. The Lloyds' insurers are a prime example of a collection of companies riding the crest of a wave. In the last week Wellington Underwriting and BRIT Insurance regaled the market with strong results, both are going gangbusters.
Wellington:
Our confidence in the future is stronger than ever,reinforced by the dividend announced today and our clear statement on expected dividends for the next two years. The strong underwriting environment and visible earnings and cash flow momentum will enable Wellington to deliver superior returns to shareholders over a sustained period of time.
http://www.uk-wire.com/cgi-bin/articles/200403040700241229W.html
and BRIT smashed company records with these results:
http://www.uk-wire.com/cgi-bin/articles/200403020700510063W.html
Favourable market conditions continue to exist in key business areas with rates continuing to harden in casualty and stabilising elsewhere
Combined ratio: 88.5% for Brit's share
A purple patch if ever there was one. On news such as this it is vital to examine the key criteria to ascertain whether or not the market has priced this strength into share prices. With BRIT trading at 88p and Wellington Underwriting at 98p, in comparison to both earning's per share and asset value BRIT appears cheapest. Using my rule of thumb for evaluating Lloyd's insurers, BRIT has a fair value of 108p. This is based on net tangible asset value of 72p, which I multiply by 1.5 to give me my target price. Now, this is admittedly a somewhat arbitrary method but if I incorporate my thirty percent margin of safety, this should protect me well from downside and at 82p the shares would be trading at a not too demanding price:earnings ratio of twelve. It is encouraging to see directors at BRIT sharing my confidence in their company's value, two this week purchased more shares in BRIT, one increasing his stake by a further 100,000 shares.
So, my list of current targets reads
Tate and Lyle: 250p (today's price 300p)
Shell: 330p (377p)
BRIT Insurance: 82p (88p)
fingers crossed.
The Artful Dodger
(0) comments
Wellington:
Our confidence in the future is stronger than ever,reinforced by the dividend announced today and our clear statement on expected dividends for the next two years. The strong underwriting environment and visible earnings and cash flow momentum will enable Wellington to deliver superior returns to shareholders over a sustained period of time.
http://www.uk-wire.com/cgi-bin/articles/200403040700241229W.html
and BRIT smashed company records with these results:
http://www.uk-wire.com/cgi-bin/articles/200403020700510063W.html
Favourable market conditions continue to exist in key business areas with rates continuing to harden in casualty and stabilising elsewhere
Combined ratio: 88.5% for Brit's share
A purple patch if ever there was one. On news such as this it is vital to examine the key criteria to ascertain whether or not the market has priced this strength into share prices. With BRIT trading at 88p and Wellington Underwriting at 98p, in comparison to both earning's per share and asset value BRIT appears cheapest. Using my rule of thumb for evaluating Lloyd's insurers, BRIT has a fair value of 108p. This is based on net tangible asset value of 72p, which I multiply by 1.5 to give me my target price. Now, this is admittedly a somewhat arbitrary method but if I incorporate my thirty percent margin of safety, this should protect me well from downside and at 82p the shares would be trading at a not too demanding price:earnings ratio of twelve. It is encouraging to see directors at BRIT sharing my confidence in their company's value, two this week purchased more shares in BRIT, one increasing his stake by a further 100,000 shares.
So, my list of current targets reads
Tate and Lyle: 250p (today's price 300p)
Shell: 330p (377p)
BRIT Insurance: 82p (88p)
fingers crossed.
The Artful Dodger
Thursday, March 04, 2004
I'm an idiot.
Tuesday's full year results announcement from my largest shareholding, Ben Bailey came in at 7 a.m., the market opened and shares started trading at 8 a.m. and I slept through all of it. Market expectations were in advance of 80p profit per share and Ben Bailey disappointed slightly at 79p. There was no negative comment in the chairman's statement but by the time I'd raised myself from my slumber the shares had fallen heavily to below my target price of six times earnings. The shares currently languish at 455p and it is back to square one, I will have to wait for 474p now. Sloth costs. I could have sold at 8:01 a.m. on Tuesday for 491p which would have sealed an excellent profit since buying at 178p in January 2003. On the brighter side, the dividend has been raised substantially to 12 pence per share from 7.5 pence. I'll be eligible for this dividend should I still be holding on April 16th, in which case the dividend will be paid on 14th May, regardless of whether I am holding or not. I aren't going to let this dividend payment affect my sell decision, the market is extremely good at discounting dividend payments, you can expect Ben Bailey to drop once it goes 'ex-dividend' on April 17th by an amount comparable with the dividend. With luck, I will receive my dividend and get to sell at the target price and not miss any other opportunities while the cash is tied up in Ben Bailey. The final results can be found here.
This has been an expensive lesson but it has given me a new rule of investment:
get out of bed at 6:30 a.m. on the day of a scheduled announcement from any company whose shares you are holding or following
Fortunately, the rest of the portfolio has made good progress this week.
The Artful Dodger
(0) comments
Tuesday's full year results announcement from my largest shareholding, Ben Bailey came in at 7 a.m., the market opened and shares started trading at 8 a.m. and I slept through all of it. Market expectations were in advance of 80p profit per share and Ben Bailey disappointed slightly at 79p. There was no negative comment in the chairman's statement but by the time I'd raised myself from my slumber the shares had fallen heavily to below my target price of six times earnings. The shares currently languish at 455p and it is back to square one, I will have to wait for 474p now. Sloth costs. I could have sold at 8:01 a.m. on Tuesday for 491p which would have sealed an excellent profit since buying at 178p in January 2003. On the brighter side, the dividend has been raised substantially to 12 pence per share from 7.5 pence. I'll be eligible for this dividend should I still be holding on April 16th, in which case the dividend will be paid on 14th May, regardless of whether I am holding or not. I aren't going to let this dividend payment affect my sell decision, the market is extremely good at discounting dividend payments, you can expect Ben Bailey to drop once it goes 'ex-dividend' on April 17th by an amount comparable with the dividend. With luck, I will receive my dividend and get to sell at the target price and not miss any other opportunities while the cash is tied up in Ben Bailey. The final results can be found here.
This has been an expensive lesson but it has given me a new rule of investment:
get out of bed at 6:30 a.m. on the day of a scheduled announcement from any company whose shares you are holding or following
Fortunately, the rest of the portfolio has made good progress this week.
The Artful Dodger
Monday, March 01, 2004
Tomorrow's announcements to the stock exchange will include Ben Bailey's full year results. I've got over 25% of my money in Ben Bailey, so my fingers are crossed for good news, with profits in advance of 80p per share, i.e. if the profit was distributed among shareholders, they would get 80p for every share held. The size of my shareholding has been declared in a previous blog.
So, I'll be rising at 06:30 a.m. to have breakfast and wait for the news article to be posted to the UK wire announcement service
http://www.uk-wire.co.uk/
at 7 a.m (such announcements are traditionally embargoed until then). This gives any interested parties an hour to digest the news before the London Stock Exchange opens at 8 a.m.
Since my last blog there has been more positive news from Chaucer Holdings, my second largest position. Chaucer announced their syndicate results and forecasts for 2003. Not to be confused with their annual results, which will of course be influenced by syndicate results. This was accompanied with an encouraging trading statement from the chairman
'I am delighted with the progress that the Group continues to make. Trading
conditions remain encouraging in our major markets and we continue to benefit
from favourable loss experience.'
and also
each division has started the 2004 year of account
positively, with gross premiums written, net of brokerage, being ahead of the
same stage for 2003.
You can read the rest here at UK wire. I keenly await Chaucer's interim results announcement, due April 4th.
The Artful Dodger
(0) comments
So, I'll be rising at 06:30 a.m. to have breakfast and wait for the news article to be posted to the UK wire announcement service
http://www.uk-wire.co.uk/
at 7 a.m (such announcements are traditionally embargoed until then). This gives any interested parties an hour to digest the news before the London Stock Exchange opens at 8 a.m.
Since my last blog there has been more positive news from Chaucer Holdings, my second largest position. Chaucer announced their syndicate results and forecasts for 2003. Not to be confused with their annual results, which will of course be influenced by syndicate results. This was accompanied with an encouraging trading statement from the chairman
'I am delighted with the progress that the Group continues to make. Trading
conditions remain encouraging in our major markets and we continue to benefit
from favourable loss experience.'
and also
each division has started the 2004 year of account
positively, with gross premiums written, net of brokerage, being ahead of the
same stage for 2003.
You can read the rest here at UK wire. I keenly await Chaucer's interim results announcement, due April 4th.
The Artful Dodger
