Friday, December 31, 2004
Artful Dodger earns 13% return in 2004
At 1p.m. this afternoon the London Stock Exchange closed for 2004. The oft-quoted FTSE 100 index closed for the day at 4,814 points, sealing a 7.5% advance from the start of the year. My portfolio ended the year showing a respectable 13% gain, pushed higher by Ben Bailey's continuing advance, closing at 422p to sell.
Portfolio standing at 31/12/04:
Ben Bailey, 20/02/03 at 178p (422p)
Ben Bailey, 21/06/04 at 390p (422p)
Chaucer Holdings, 06/10/03 at 42.88p (48p)
Chaucer Holdings, 06/04/2004 at 54.75p (48p)
Dana Petroleum, 20/11/03 at 223.75p (417.5p)
Mayborn Group, 15/03/04 at 282p (258p)
+ cash holdings
Return for the year: +13%
This is a resounding victory. My efforts, time, stresses and exertions over the year have been rewarded, the return achieved is significantly in advance of what a risk-free investment in a building society account or gilts would have produced. Furthermore, my decision to manage my own funds rather than invest my cash in a market tracker has been vindicated with a 5.5% outperformance.
However, I'm bitterly disappointed with the return achieved this year. Much larger gains were expected from the positions I took in my portfolio. Ben Bailey has finished 2004 only a paltry 2.9% ahead from the start of the year, Chaucer has managed an even more mediocre 2.1% rise. Dana Petroleum has been the true hero of the portfolio posting a 69% rise from the start of the year.
Portfolio performance was hampered by three key lapses in the year: my indolent failure to sell Ben Bailey at 480p following final results being the most idiotic. This would have freed up a large amount of cash that could have been invested amongst several of the opportunities I was unable to capitalise on in the year due to a lack of funds. My decisions to buy a second tranche of Chaucer shares at 54.75p and opening a position in Mayborn at 282p were rash and impatient lunges for profits that never materialised. At the end of the year both positions sit underwater, weighing down performance and returns like a couple of tonnes of flotsam tangled in a trawler's nets.
However, some decisions this year have proved particularly profitable.
Buying more Ben Bailey shares at 390p when sentiment towards the housebuilding industry turned bearish was well-disciplined, brave and well executed. At today's closing price, this aditional purchase is showing an 8.2% advance and has made a significant contribution to the year's returns.
October and the Atlantic hurricane season presented a test of nerve as shares in Chaucer holdings fell to 40p to sell. The early indications from the industry showed losses would fall within budget and the disasters would serve to increase insurance rates further in the future. Chaucer remained dirt cheap and I held on like a limpet in a whirling vortex to see the shares finish the year 10% higher at 48p.
Here's to 2005.
The Artful Dodger
(0) comments
Portfolio standing at 31/12/04:
Ben Bailey, 20/02/03 at 178p (422p)
Ben Bailey, 21/06/04 at 390p (422p)
Chaucer Holdings, 06/10/03 at 42.88p (48p)
Chaucer Holdings, 06/04/2004 at 54.75p (48p)
Dana Petroleum, 20/11/03 at 223.75p (417.5p)
Mayborn Group, 15/03/04 at 282p (258p)
+ cash holdings
Return for the year: +13%
This is a resounding victory. My efforts, time, stresses and exertions over the year have been rewarded, the return achieved is significantly in advance of what a risk-free investment in a building society account or gilts would have produced. Furthermore, my decision to manage my own funds rather than invest my cash in a market tracker has been vindicated with a 5.5% outperformance.
However, I'm bitterly disappointed with the return achieved this year. Much larger gains were expected from the positions I took in my portfolio. Ben Bailey has finished 2004 only a paltry 2.9% ahead from the start of the year, Chaucer has managed an even more mediocre 2.1% rise. Dana Petroleum has been the true hero of the portfolio posting a 69% rise from the start of the year.
Portfolio performance was hampered by three key lapses in the year: my indolent failure to sell Ben Bailey at 480p following final results being the most idiotic. This would have freed up a large amount of cash that could have been invested amongst several of the opportunities I was unable to capitalise on in the year due to a lack of funds. My decisions to buy a second tranche of Chaucer shares at 54.75p and opening a position in Mayborn at 282p were rash and impatient lunges for profits that never materialised. At the end of the year both positions sit underwater, weighing down performance and returns like a couple of tonnes of flotsam tangled in a trawler's nets.
However, some decisions this year have proved particularly profitable.
Buying more Ben Bailey shares at 390p when sentiment towards the housebuilding industry turned bearish was well-disciplined, brave and well executed. At today's closing price, this aditional purchase is showing an 8.2% advance and has made a significant contribution to the year's returns.
October and the Atlantic hurricane season presented a test of nerve as shares in Chaucer holdings fell to 40p to sell. The early indications from the industry showed losses would fall within budget and the disasters would serve to increase insurance rates further in the future. Chaucer remained dirt cheap and I held on like a limpet in a whirling vortex to see the shares finish the year 10% higher at 48p.
Here's to 2005.
The Artful Dodger
Thursday, December 30, 2004
Christmas tipsters a-tipping Ben Bailey
I've written previously that small cap shares need newsflow if their market valuation is to move significantly. This news could be results announcements, trading statements or proclamations from peers.
Media comment can also create trading volume and generate price changes. This week my largest holding, Ben Bailey has received a leg-up from tipsters in the plethora of shares for 2005 articles.
Shares magazine, t1ps.com and MSN Money. The analysis and conclusions are nothing avant-garde to Artful Investing readers, the tips are no more sophisticated than necessary: Ben Bailey is too cheap when comparing the share price to profits.
Shares encapsulates my case for investment:
Financially, Ben Bailey looks in good shape. From 2000 to 2003 revenue doubled to £62.8 million, while earnings have leapt from 10.6p a share to 77.3p. Profits of 16.3 million and 97p EPS are expected to be unveiled for 2004 when annual results are published in March, rising to £17.6 million pre-tax in 2005. This implies very modest earnings growth to 103p a share, a target that may well prove too conservative.
Nick Louth at MSN Money postulates along similar lines:
Even in an industry offering bargain P/E ratios, Ben Bailey stands out. The East Midlands and Yorkshire-based company has for five years increased its earnings per share by an average 54% a year and its dividend payout by 37%, yet it still stands on a Scrooge-like forward P/E of 4.1.
Now of course everyone is expecting house prices to decline, which will undoubtedly bite into margins. What no-one knows is how sharply and for how long any price fall will last. If the downturn is milder than expected, the shares of housebuilders could bounce, and Ben Bailey is bound to be one of the beneficiaries.
Mark Watson-Mitchell at t1ps.com completes the research and evaluation process, including a price target for the incredibly undervalued Ben Bailey:
analysts at brokers Numis Securities have upped their full year profits forecast from £14.2 million to a massive £16.2 million (four years ago it was making £1.6 million).
Rival brokers, Corporate Synergy, expects £16.4 million or 99.2p of earnings. Further down the line for the year starting 1st January 2005 it has pencilled in £17.6 million pre-tax profits, worth a staggering 105.9p per share in earnings. Those estimates are excellent news and make the shares look incredibly undervalued....
Numis has a 540p share price target, a fair hike from the current 411.5p, or a ridiculous four times 2004 forecasts. At the time of the full year results in March the shares were nudging 500p but have drifted on profit taking.
I suggest a short term share price target of at least 500p looks easily achieved, thereafter a nudge through to 600p is very likely. The shares offer a reasonable yield of 3.6% (forecast). There is also scope for an increase in next year's forecasts depending on market conditions.
At the current share price of just 410.5p Ben Bailey is well worth buying, particularly given the likelihood of consolidation in the sector and the possible premium it could achieve if a bidder came forward.
These shares are a stonking BUY and must be added to any portfolio seeking capital growth.
The media attention wafted smelling salts under the noses of investors comatose to the opportunities existing in this bear mauled sector. Bailey shares are now on course to end 2004 higher than they started the year, albeit a mere 4p should the shares hold their price in tomorrow's final trading session. The recent close represents a 6% rise on my most recent purchase at 390p and looks set to reward me for holding onto the shares tighter than Paul McCartney's facelift when they fell to 365p.
Here's to tomorrow morning and the last trading session of the year!
The Arful Dodger
(0) comments
Media comment can also create trading volume and generate price changes. This week my largest holding, Ben Bailey has received a leg-up from tipsters in the plethora of shares for 2005 articles.
Shares magazine, t1ps.com and MSN Money. The analysis and conclusions are nothing avant-garde to Artful Investing readers, the tips are no more sophisticated than necessary: Ben Bailey is too cheap when comparing the share price to profits.
Shares encapsulates my case for investment:
Financially, Ben Bailey looks in good shape. From 2000 to 2003 revenue doubled to £62.8 million, while earnings have leapt from 10.6p a share to 77.3p. Profits of 16.3 million and 97p EPS are expected to be unveiled for 2004 when annual results are published in March, rising to £17.6 million pre-tax in 2005. This implies very modest earnings growth to 103p a share, a target that may well prove too conservative.
Nick Louth at MSN Money postulates along similar lines:
Even in an industry offering bargain P/E ratios, Ben Bailey stands out. The East Midlands and Yorkshire-based company has for five years increased its earnings per share by an average 54% a year and its dividend payout by 37%, yet it still stands on a Scrooge-like forward P/E of 4.1.
Now of course everyone is expecting house prices to decline, which will undoubtedly bite into margins. What no-one knows is how sharply and for how long any price fall will last. If the downturn is milder than expected, the shares of housebuilders could bounce, and Ben Bailey is bound to be one of the beneficiaries.
Mark Watson-Mitchell at t1ps.com completes the research and evaluation process, including a price target for the incredibly undervalued Ben Bailey:
analysts at brokers Numis Securities have upped their full year profits forecast from £14.2 million to a massive £16.2 million (four years ago it was making £1.6 million).
Rival brokers, Corporate Synergy, expects £16.4 million or 99.2p of earnings. Further down the line for the year starting 1st January 2005 it has pencilled in £17.6 million pre-tax profits, worth a staggering 105.9p per share in earnings. Those estimates are excellent news and make the shares look incredibly undervalued....
Numis has a 540p share price target, a fair hike from the current 411.5p, or a ridiculous four times 2004 forecasts. At the time of the full year results in March the shares were nudging 500p but have drifted on profit taking.
I suggest a short term share price target of at least 500p looks easily achieved, thereafter a nudge through to 600p is very likely. The shares offer a reasonable yield of 3.6% (forecast). There is also scope for an increase in next year's forecasts depending on market conditions.
At the current share price of just 410.5p Ben Bailey is well worth buying, particularly given the likelihood of consolidation in the sector and the possible premium it could achieve if a bidder came forward.
These shares are a stonking BUY and must be added to any portfolio seeking capital growth.
The media attention wafted smelling salts under the noses of investors comatose to the opportunities existing in this bear mauled sector. Bailey shares are now on course to end 2004 higher than they started the year, albeit a mere 4p should the shares hold their price in tomorrow's final trading session. The recent close represents a 6% rise on my most recent purchase at 390p and looks set to reward me for holding onto the shares tighter than Paul McCartney's facelift when they fell to 365p.
Here's to tomorrow morning and the last trading session of the year!
The Arful Dodger
Sunday, December 26, 2004
Entering home straight - 12% ahead
Two and a half trading days remain in 2004 and at the curent reckoning my portfolio is at a high for the year advancing 12% since January.
Ben Bailey has enjoyed a recent resurgence, encouraged by speculation the direction of interest rates may be downwards from here. This would be excellent news for housebuilders as mortgage affordability would support selling prices. For the last three months market expectations were for rates to advance above 5% in 2005. Published minutes from the Bank of Englands last meeting of the Monetary Policy Committee have turned consensus opinion, pushing Bailey shares beyond my second purchase price of 390p to 414p to sell.
Chaucer Holdings have advanced above the price they started 2004 at, encouraged by news that a progressive policy is to be applied to the shareholder dividend and the company is on course to produce a third consecutive year of healthy underwriting profits.
I am now more confident than ever that I will achieve double-digit returns in 2004 but will be bitterly disappointed with my result for the year as a whole.
Value at close of trade, Friday 22nd October:
Ben Bailey, 20/02/03 at 178p (400p)
Ben Bailey, 21/06/04 at 390p (400p)
Chaucer Holdings, 06/10/03 at 42.88p (44p)
Chaucer Holdings, 06/04/2004 at 54.75p (44p)
Dana Petroleum, 20/11/03 at 223.75p (442p)
Mayborn Group, 15/03/04 at 282p (263p)
+ cash holdings
Return to October 22nd: +10%
Value at close of trade, Friday 24th December:
Ben Bailey, 20/02/03 at 178p (414p)
Ben Bailey, 21/06/04 at 390p (414p)
Chaucer Holdings, 06/10/03 at 42.88p (48p)
Chaucer Holdings, 06/04/2004 at 54.75p (48p)
Dana Petroleum, 20/11/03 at 223.75p (415p)
Mayborn Group, 15/03/04 at 282p (260p)
+ cash holdings
Return to December 24th: +12%
A full result for the year will appear here, on New Years Eve.
Happy Christmas to all readers.
The Artful Dodger
(0) comments
Ben Bailey has enjoyed a recent resurgence, encouraged by speculation the direction of interest rates may be downwards from here. This would be excellent news for housebuilders as mortgage affordability would support selling prices. For the last three months market expectations were for rates to advance above 5% in 2005. Published minutes from the Bank of Englands last meeting of the Monetary Policy Committee have turned consensus opinion, pushing Bailey shares beyond my second purchase price of 390p to 414p to sell.
Chaucer Holdings have advanced above the price they started 2004 at, encouraged by news that a progressive policy is to be applied to the shareholder dividend and the company is on course to produce a third consecutive year of healthy underwriting profits.
I am now more confident than ever that I will achieve double-digit returns in 2004 but will be bitterly disappointed with my result for the year as a whole.
Value at close of trade, Friday 22nd October:
Ben Bailey, 20/02/03 at 178p (400p)
Ben Bailey, 21/06/04 at 390p (400p)
Chaucer Holdings, 06/10/03 at 42.88p (44p)
Chaucer Holdings, 06/04/2004 at 54.75p (44p)
Dana Petroleum, 20/11/03 at 223.75p (442p)
Mayborn Group, 15/03/04 at 282p (263p)
+ cash holdings
Return to October 22nd: +10%
Value at close of trade, Friday 24th December:
Ben Bailey, 20/02/03 at 178p (414p)
Ben Bailey, 21/06/04 at 390p (414p)
Chaucer Holdings, 06/10/03 at 42.88p (48p)
Chaucer Holdings, 06/04/2004 at 54.75p (48p)
Dana Petroleum, 20/11/03 at 223.75p (415p)
Mayborn Group, 15/03/04 at 282p (260p)
+ cash holdings
Return to December 24th: +12%
A full result for the year will appear here, on New Years Eve.
Happy Christmas to all readers.
The Artful Dodger
