Monday, April 11, 2005
New homes for housebuilder's cash
I've held shares in Ben Bailey since buying at 178p in February 2003. That shareholding has performed brilliantly and made it's master proud. The shares sit today at 470p to sell, with my target sell price 522p.
I've pontifficated previously on my refusal to sell cheap shares. Ben Bailey remains cheap. I even bought more at 390p in June 2004. Despite the discount to fair value, I'm close to selling some of my Ben Bailey stake. Sure, the shares are still cheap, but only 11% off fair value. That's not a lot of upside.
I'm tempted to sell my Ben Bailey holding and reinvest the funds in a share that is demonstrably far cheaper, at least 30% cheaper than fair value to meet my margin of safety rule. I've found two shares that currently sit excruciatingly close to the required purchase price.
One is Fayrewood, the European IT component distributor and the second is SVB, another insurer.
If the prevailing prices fit my fastidious formula, there could be major changes to my portfolio this week. Stick around.
The Artful Dodger
I've pontifficated previously on my refusal to sell cheap shares. Ben Bailey remains cheap. I even bought more at 390p in June 2004. Despite the discount to fair value, I'm close to selling some of my Ben Bailey stake. Sure, the shares are still cheap, but only 11% off fair value. That's not a lot of upside.
I'm tempted to sell my Ben Bailey holding and reinvest the funds in a share that is demonstrably far cheaper, at least 30% cheaper than fair value to meet my margin of safety rule. I've found two shares that currently sit excruciatingly close to the required purchase price.
One is Fayrewood, the European IT component distributor and the second is SVB, another insurer.
If the prevailing prices fit my fastidious formula, there could be major changes to my portfolio this week. Stick around.
The Artful Dodger
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