Thursday, March 31, 2005
Portfolio review: +19% year to date
March has provided an impressive 3% rise my portfolio value. Strong results from all of my holdings have boosted returns.
Compared with my previous update at the end of February:
Portfolio as of 28th February 2005:
Ben Bailey, 20/02/03 at 178p (485p)
Ben Bailey, 21/06/04 at 390p (485p)
Chaucer Holdings, 06/10/03 at 42.88p (55p)
Chaucer Holdings, 06/04/2004 at 54.75p (55p)
Dana Petroleum, 20/11/03 at 223.75p (515p)
Mayborn Group, 15/03/04 at 282p (290p)
+ cash holdings
I had noted at the time that ..huge advances have been achieved, returns can be expected to calm in later months. Advances in the portfolio as a whole were less than February's stonking performance. This was due to a significant fall in my largest holding, Ben Bailey and a dip in the value of Chaucer shares. Mayborn and Dana made up all of the lost ground however and both now stand close to all-time highs.
Today's values at close of trade 31st March 2005:
Ben Bailey, 20/02/03 at 178p (458p)
Ben Bailey, 21/06/04 at 390p (458p)
Chaucer Holdings, 06/10/03 at 42.88p (52p)
Chaucer Holdings, 06/04/2004 at 54.75p (52p)
Dana Petroleum, 20/11/03 at 223.75p (545p)
Mayborn Group, 15/03/04 at 282p (370p)
+ cash holdings
I promise new reviews for Chaucer, Dana and Mayborn to follow shortly. In the meantime, the shortage of newsflow may result in impatient investors taking their money out of stocks that have recently reported results, like Ben Bailey, Chaucer, Dana and Mayborn and head for the exit looking for the next exciting ride. Some pull-back in value may result. I however see no investment opportunities at present and will hold and continue to wait. Dividends from Ben Bailey and Chaucer are expected soon.
The Artful Dodger
(0) comments
Compared with my previous update at the end of February:
Portfolio as of 28th February 2005:
Ben Bailey, 20/02/03 at 178p (485p)
Ben Bailey, 21/06/04 at 390p (485p)
Chaucer Holdings, 06/10/03 at 42.88p (55p)
Chaucer Holdings, 06/04/2004 at 54.75p (55p)
Dana Petroleum, 20/11/03 at 223.75p (515p)
Mayborn Group, 15/03/04 at 282p (290p)
+ cash holdings
I had noted at the time that ..huge advances have been achieved, returns can be expected to calm in later months. Advances in the portfolio as a whole were less than February's stonking performance. This was due to a significant fall in my largest holding, Ben Bailey and a dip in the value of Chaucer shares. Mayborn and Dana made up all of the lost ground however and both now stand close to all-time highs.
Today's values at close of trade 31st March 2005:
Ben Bailey, 20/02/03 at 178p (458p)
Ben Bailey, 21/06/04 at 390p (458p)
Chaucer Holdings, 06/10/03 at 42.88p (52p)
Chaucer Holdings, 06/04/2004 at 54.75p (52p)
Dana Petroleum, 20/11/03 at 223.75p (545p)
Mayborn Group, 15/03/04 at 282p (370p)
+ cash holdings
I promise new reviews for Chaucer, Dana and Mayborn to follow shortly. In the meantime, the shortage of newsflow may result in impatient investors taking their money out of stocks that have recently reported results, like Ben Bailey, Chaucer, Dana and Mayborn and head for the exit looking for the next exciting ride. Some pull-back in value may result. I however see no investment opportunities at present and will hold and continue to wait. Dividends from Ben Bailey and Chaucer are expected soon.
The Artful Dodger
Sunday, March 20, 2005
Mayborn picks up the baton
I've already mentioned how crucial March will be in shaping the returns I'll make in 2005. Ben Bailey, Mayborn and now Chaucer have all reported results. Mayborn's news raised a rumpus as speculators scrambled for shares in the company and each day last week bought gains in excess of 2%. The shares now stand at 369p to sell. That's above the sell target I set back when I bought but the news coming out of the company on earnings and prospects have forced me to raise this target price.
The recent price action from Mayborn has provided a huge boost to portfolio and ego. The majority that moulds market consensus has finally come to it's senses and recognised the value in this company. But there's still some way to go. I'll soon be posting an updated fair value estimate for Mayborn that will show further progress is a real possibility.
As for Chaucer, their recent results also necessitate a new appraisal of the company. The news of the proposed merger with Highway Insurance should start to seep into the aggregate judgement circuits of market-watchers, some price movement may be in the pipeline.
If all that wasn't exciting enough, there are Dana Petroleum's full-year results to look forward to. Last year these arrived on March 27th. Plenty can happen before the next full portfolio update.
The Artful Dodger
(0) comments
The recent price action from Mayborn has provided a huge boost to portfolio and ego. The majority that moulds market consensus has finally come to it's senses and recognised the value in this company. But there's still some way to go. I'll soon be posting an updated fair value estimate for Mayborn that will show further progress is a real possibility.
As for Chaucer, their recent results also necessitate a new appraisal of the company. The news of the proposed merger with Highway Insurance should start to seep into the aggregate judgement circuits of market-watchers, some price movement may be in the pipeline.
If all that wasn't exciting enough, there are Dana Petroleum's full-year results to look forward to. Last year these arrived on March 27th. Plenty can happen before the next full portfolio update.
The Artful Dodger
Saturday, March 19, 2005
Chaucer proves perenially frustrating
Chaucer management wrecked Friday's final results with the news they were planning a merger with rival Highway Insurance.
Chaucer reported diluted earnings per share of 11.2p versus last year's 9.5p. Market expectations were trounced and the dividend hiked, despite the ravaging effects of the Atlantic hurricane season.
But the news of a possible merger with motor insurer Highway left the market confused. The proposal suggested:
an all share offer by Chaucer for Highway on the basis of 44 Chaucer ordinary shares for every 54 Highway ordinary shares.
Highway has been a long-time poor relation of the insurance sector. Though a merger of Chaucer and Highway's motor insurance arms could bring real cost savings, mergers are all too often uniquely awkward projects to complete. Hundreds of management hours and expensive rebranding is often required and staff can regard their new owners as penny pinching stepmother figures and morale can suffer.
The probability of the merger going through now needs to be factored into the market's valuation of the shares in each company along with the price valuation Chaucer's management is placing on Highway's shares and the benefits to shareholders in the merged entity. If it is deemed Chaucer is valuing Highway too highly, Chaucer shares should fall. The question for the market is how much of the the amalgamation should current Chaucer holders be getting?
The merger announcement has left me furious. Friday's fantastic earnings news should have enthused the market into bidding Chaucer's shares to a new high. However, the chance that someone buying shares in Chaucer would be owning part of what soon could be a different company inspired overwhelming apathy and the shares were left untouched and as unloved as a cracked Barry Manilow LP at a car boot sale.
I've waited months for these results, hoping good news would be delivered and Chaucer's poor performing share price would begin the move northwards towards fair value. The Highway news has scuppered any chance of that happening soon. What a waste.
More moanings tomorrow.
The Artful Dodger
(0) comments
Chaucer reported diluted earnings per share of 11.2p versus last year's 9.5p. Market expectations were trounced and the dividend hiked, despite the ravaging effects of the Atlantic hurricane season.
But the news of a possible merger with motor insurer Highway left the market confused. The proposal suggested:
an all share offer by Chaucer for Highway on the basis of 44 Chaucer ordinary shares for every 54 Highway ordinary shares.
Highway has been a long-time poor relation of the insurance sector. Though a merger of Chaucer and Highway's motor insurance arms could bring real cost savings, mergers are all too often uniquely awkward projects to complete. Hundreds of management hours and expensive rebranding is often required and staff can regard their new owners as penny pinching stepmother figures and morale can suffer.
The probability of the merger going through now needs to be factored into the market's valuation of the shares in each company along with the price valuation Chaucer's management is placing on Highway's shares and the benefits to shareholders in the merged entity. If it is deemed Chaucer is valuing Highway too highly, Chaucer shares should fall. The question for the market is how much of the the amalgamation should current Chaucer holders be getting?
The merger announcement has left me furious. Friday's fantastic earnings news should have enthused the market into bidding Chaucer's shares to a new high. However, the chance that someone buying shares in Chaucer would be owning part of what soon could be a different company inspired overwhelming apathy and the shares were left untouched and as unloved as a cracked Barry Manilow LP at a car boot sale.
I've waited months for these results, hoping good news would be delivered and Chaucer's poor performing share price would begin the move northwards towards fair value. The Highway news has scuppered any chance of that happening soon. What a waste.
More moanings tomorrow.
The Artful Dodger
Tuesday, March 15, 2005
Maybe it's make believe? Maybe it's Mayborn
Mayborn's final results announcement this morning had me wondering if the sensations of Sainsbury's margarine on toast were being dreamt. No pinch was required and it's unlikely I'd start to feel it anyway as the baby products manufacturer and fourth largest portfolio constituent reported record results that trounced market expectations.
Mayborn trumpeted fantastic full-year figures with diluted earnings per share coming in at a stonking 28.6p against a headline figure of 29.2p. Unless you are a brutual communist dictator the most effective way to get the crowds to cheer your announcements is to give them some good news. Mayborn kept it coming, with a 50% increase in the final dividend and encouraging futurespeak on 2005's prospects, the market responding with the strongest round of applause they've given the company in a long time.
Trading in 2005 has started strongly. Over the last few years, earnings per share have risen substantially, and the Board is confident that 2005 will be another year of good progress. Our confidence is underpinned by new product launches, new listings and earnings enhancing acquisitions.
On Friday, Mayborn had announced the £10m acquisition of Tube Plastics, a rugrat assault-course manufacturer. The market was unable to stifle the jaw-dropping excitement that Mayborn has purchased the leading UK manufacturer of Children's outdoor play equipment and the shares have risen by more than three percent in each trading session since, culminating in today's push to 335p to sell, 18% higher than my rule-breaking purchase at 282p.
I'm yet to do a full appraisal in response to all this news, but for now am pencilling a new fair value of 372p and a re-purchase price of 286p.
More analysis to follow in a later blog. I'll be back by Friday at the latest, it's Chaucer's turn to announce full results on the 18th.
The Artful Dodger
(0) comments
Mayborn trumpeted fantastic full-year figures with diluted earnings per share coming in at a stonking 28.6p against a headline figure of 29.2p. Unless you are a brutual communist dictator the most effective way to get the crowds to cheer your announcements is to give them some good news. Mayborn kept it coming, with a 50% increase in the final dividend and encouraging futurespeak on 2005's prospects, the market responding with the strongest round of applause they've given the company in a long time.
Trading in 2005 has started strongly. Over the last few years, earnings per share have risen substantially, and the Board is confident that 2005 will be another year of good progress. Our confidence is underpinned by new product launches, new listings and earnings enhancing acquisitions.
On Friday, Mayborn had announced the £10m acquisition of Tube Plastics, a rugrat assault-course manufacturer. The market was unable to stifle the jaw-dropping excitement that Mayborn has purchased the leading UK manufacturer of Children's outdoor play equipment and the shares have risen by more than three percent in each trading session since, culminating in today's push to 335p to sell, 18% higher than my rule-breaking purchase at 282p.
I'm yet to do a full appraisal in response to all this news, but for now am pencilling a new fair value of 372p and a re-purchase price of 286p.
More analysis to follow in a later blog. I'll be back by Friday at the latest, it's Chaucer's turn to announce full results on the 18th.
The Artful Dodger
Monday, March 14, 2005
Eyes down: Mayborn tomorrow at seven
Mayborn announces full-year results tomorrow at 7a.m.
The alarm is primed and the toaster will be loaded at 6:45. The shares in my smallest holding have advanced 10% in the last two trading sessions following real excitement over the company's recent purchase of a kiddies toy manufacturer.
It could be swings and roundabouts for earnings however, the soaring cost of crude oil will have boosted raw material costs but with a lot of company expenses denominated in greenbacks, the recent slide in value of the US dollar will help enormously.
Mayborn deserve a P/E of around 13 by my reckoning. At 315p to sell today, any result in excess of 24p per share should see the shares rise.
Here's hoping it's a red letter day tomorrow.
The Artful Dodger
(0) comments
The alarm is primed and the toaster will be loaded at 6:45. The shares in my smallest holding have advanced 10% in the last two trading sessions following real excitement over the company's recent purchase of a kiddies toy manufacturer.
It could be swings and roundabouts for earnings however, the soaring cost of crude oil will have boosted raw material costs but with a lot of company expenses denominated in greenbacks, the recent slide in value of the US dollar will help enormously.
Mayborn deserve a P/E of around 13 by my reckoning. At 315p to sell today, any result in excess of 24p per share should see the shares rise.
Here's hoping it's a red letter day tomorrow.
The Artful Dodger
Sunday, March 06, 2005
Insurers keeping it up
The last fortnight saw a steady flow of reports from the insurance sector, providing vital information on profitability and industry climate. It's vital to keep tabs on the newsflow in a sector an investor has a stake in and I've got around 25% in Chaucer Holdings, which announces full-year results on Friday March 18th.
Last Friday, Wellington Underwriting announced final results for 2004 with a hugely encouraging RNS, here's the relevant bits:
we remain confident .. given normal market conditions. 2005 has started well .. we have an excellent platform on which to build further value for our shareholders..Underwriting profits from Syndicate 2020 increased by 8% to £39.4m (2003: £36.5m), including hurricane activity in 2004, reflecting strong underwriting conditions in 2003 and 2004
Now a quick scan down to the Chairman's statement:
Underwriting conditions were generally favourable during 2004; overall rates decreased by 5% as we had anticipated and some lines, particularly US property, continued to be under pressure. In the energy and non-marine property lines of business, however, pressure on rates eased as the result of the losses sustained from the hurricanes, Charley, Frances, Ivan and Jeanne...I believe that market conditions will continue to be favourable in 2005... the exceptionally severe hurricane season in the Caribbean in 2004, are a reminder that rates need to be maintained to ..maintain profitability
BRIT Insurance impressed on Tuesday, announcing record results:
The insurance market continues to experience low investment returns which together with pressure on back year reserves among a number of our competitors give us real confidence that the necessary market conditions will remain in force for good returns to be generated on our account.
It's not steak sandwiches all round in the sector however, on Friday Hardy Underwriting was forced to warn trading had landed butter-side down with the sort of statement that should remind an investor just how exposed each company in the sector is to force majeure events:
The 2004 year of account has been impacted by significant losses from the US
hurricanes and Japanese typhoons, particularly Songda... we are disappointed that the group results will not be in line with the expectations we had at the half year stage.
Hardy has clearly copped it from typhoon Songda and this disappointing news saw the company's shares falling 9% on the day. This sort of loss goes with the territory, investors will have to decide if they trust management to continue running their business profitably or if funds would be better invested elsewhere.
All in all, this week's news from the sector has been very encouraging for my shareholding in Chaucer. If the sector continues to report in the positive tones of BRIT and Wellington, I expect the price to advance further between now and final results day.
The Artful Dodger
(0) comments
Last Friday, Wellington Underwriting announced final results for 2004 with a hugely encouraging RNS, here's the relevant bits:
we remain confident .. given normal market conditions. 2005 has started well .. we have an excellent platform on which to build further value for our shareholders..Underwriting profits from Syndicate 2020 increased by 8% to £39.4m (2003: £36.5m), including hurricane activity in 2004, reflecting strong underwriting conditions in 2003 and 2004
Now a quick scan down to the Chairman's statement:
Underwriting conditions were generally favourable during 2004; overall rates decreased by 5% as we had anticipated and some lines, particularly US property, continued to be under pressure. In the energy and non-marine property lines of business, however, pressure on rates eased as the result of the losses sustained from the hurricanes, Charley, Frances, Ivan and Jeanne...I believe that market conditions will continue to be favourable in 2005... the exceptionally severe hurricane season in the Caribbean in 2004, are a reminder that rates need to be maintained to ..maintain profitability
BRIT Insurance impressed on Tuesday, announcing record results:
The insurance market continues to experience low investment returns which together with pressure on back year reserves among a number of our competitors give us real confidence that the necessary market conditions will remain in force for good returns to be generated on our account.
It's not steak sandwiches all round in the sector however, on Friday Hardy Underwriting was forced to warn trading had landed butter-side down with the sort of statement that should remind an investor just how exposed each company in the sector is to force majeure events:
The 2004 year of account has been impacted by significant losses from the US
hurricanes and Japanese typhoons, particularly Songda... we are disappointed that the group results will not be in line with the expectations we had at the half year stage.
Hardy has clearly copped it from typhoon Songda and this disappointing news saw the company's shares falling 9% on the day. This sort of loss goes with the territory, investors will have to decide if they trust management to continue running their business profitably or if funds would be better invested elsewhere.
All in all, this week's news from the sector has been very encouraging for my shareholding in Chaucer. If the sector continues to report in the positive tones of BRIT and Wellington, I expect the price to advance further between now and final results day.
The Artful Dodger
Tuesday, March 01, 2005
Just desserts from Ben Bailey
I spent much of 2004 as frustrated as a mayfly stuck on its back in a butchers. Nothing ever came off for me. I knew large gains could be enjoyed through the strategy I'd employed but payday never arrived. Companies in my portfolio reported strong trading and high earnings but share prices never moved to reflect this. I continued to flap and fight for modest returns.
2005 has brought a tremendous reversal in fortunes.
After a long wait, Ben Bailey is at last approaching the price the shares deserve. The 7a.m final results announcement from Ben Bailey this morning made my margarine on toast taste like a foie gras and caviar canape consumed on the back of a private yacht in the Caribbean.
Earnings per share, dividend per share and market outlook gave weight to a further 2.6% rise in the shares today, pushing the shares to 497p to buy against my purchases in 2003 and 2004 at 178p and 390p respectively. The largest stake in my portfolio is riding at an all-time high and this morning's news is the best I've been able to report since the blog began over a year ago.
The Ben Bailey chairman's statement read:
I am delighted to be able to report that the Company has produced further record results. Turnover increased by 29.8% to £81.5m (2003: £62.8m), from the sale of 527 houses (2003: 450 houses). Profit before tax increased by 27.9% to £16.47m (2003: £12.88m) with operating margins showing a further improvement to 22.4% (2003: 21.9%). As a result of the above, earnings per share increased by 26.9% to 100.5p (2003: 79.2p).
with sentiment toward the housebuilders turning upwards, further gains could still be in the pipeline. The crucial month of March has started well but I must guard against complacency. Even in the light of this excellent news, I'll be selling Ben Bailey at 522p given the chance.
The Artful Dodger
(0) comments
2005 has brought a tremendous reversal in fortunes.
After a long wait, Ben Bailey is at last approaching the price the shares deserve. The 7a.m final results announcement from Ben Bailey this morning made my margarine on toast taste like a foie gras and caviar canape consumed on the back of a private yacht in the Caribbean.
Earnings per share, dividend per share and market outlook gave weight to a further 2.6% rise in the shares today, pushing the shares to 497p to buy against my purchases in 2003 and 2004 at 178p and 390p respectively. The largest stake in my portfolio is riding at an all-time high and this morning's news is the best I've been able to report since the blog began over a year ago.
The Ben Bailey chairman's statement read:
I am delighted to be able to report that the Company has produced further record results. Turnover increased by 29.8% to £81.5m (2003: £62.8m), from the sale of 527 houses (2003: 450 houses). Profit before tax increased by 27.9% to £16.47m (2003: £12.88m) with operating margins showing a further improvement to 22.4% (2003: 21.9%). As a result of the above, earnings per share increased by 26.9% to 100.5p (2003: 79.2p).
with sentiment toward the housebuilders turning upwards, further gains could still be in the pipeline. The crucial month of March has started well but I must guard against complacency. Even in the light of this excellent news, I'll be selling Ben Bailey at 522p given the chance.
The Artful Dodger
