JAN 02 – 2016 END OF YEAR REVIEW

End of Year 2015 Review

It is this time of the year where one gets to review the performance of the portfolio. Given I started the portfolio beginning of March 2015, technically I should carry out the review as at 1 March 2016 but I figured it would be easier to do it at end of each year.

In short, I have realised gains of £349 and unrealised gains of £370 bringing it to a total of £719. For future comparisons, the amount I have in my portfolio as at 31 December 2015 is £10,719. Although I do not include dividends partly due to the fact that they cover the trading costs, I will just mention the total dividend income received during 2015 associated with the portfolio – £107. I also received £104 from Entertainment One Rights Issue – more on that later. One could argue that the total gains for 2015 amount to £930 – 9.3% of the total portfolio.

Gains of £719 from the £10,000 portfolio equates to 7.2%. Bear in mind I have been trading for almost three quarters of a year. As previously explained I am targeting a 10% gain each year. At one point, the gains amounted to 15% in total but this quickly evaporated when TCM (Telit Communications) share price dwindled from £600 potential profit to a small loss but I quickly banked when there was a 13.5% gain, resulting in a £135 profit. It goes to show that a gain of this magnitude can easily be eroded – in hindsight, I should have exited when it was around £500. I had been banking on a reverse. Time will tell if I made the mistake of selling out too early. Though it is still on my radar given it’s now heavily buying back shares.

Benchmarking my performance – the FTSE All Share Total Return Performance is 1% (or -2.5% for Capital, without dividends etc) during the whole 2015. So I am quite content with my performance to date but I still have lots to learn. I will go through each share I currently have in my portfolio.

There are nine sets of shares in my portfolio. I had sold the TCM before Christmas and will have the £1,000 cash available to invest in some shares if the right opportunity arises.

INL – a success so far, currently showing a gain of £362 (36%). I am banking on further increases during the first three months of 2016 as traditionally house builders tend to perform well during this period. The management seems to be doing the right things. There were times when I was rather impatient as it kept hovering around 70p for almost 6 months. It was only until December when the shares started to motor upwards. It pays a lot to be patient! This is a trait I intend to use during 2016!

OPAY/PAYS – Given the success stories with World Pay and Paypal, I persevered with this share when it went underwater (at one point it was -25%). The main reason was the company issued some new shares to fund their acquisition. Now the share is operating in FTSE rather than AIM so I am quite content to hold it for quite a long time – chances are that it will either be taken over or go on growing, especially when it officially joins FTSE250 come March 2016. Currently it is showing a gain of £255 (25%).

XLM – An interesting buy – it appeared rather cheap so I took the leap and bought it. Given it trades in AIM, foreign (it’s an Israeli company) companies tend to perform badly due to lack of robust regulation under AIM. FTSE is seen as more reliable. Anyhow, I am quite pleased with its performance to date. At this time of writing it has yielded a gain of £393 (39%). The fundamentals still appear cheap and I am hopeful for further rises in the new year.

EHG – Owner of a set of luxury hotels in Barbados – showing a gain of £81 (£8%). What attracted me was the promise of 7% dividend yield. Given it listed half way this year, I have got half of the dividend. It’s highly cash generative and latest update has shown steady increases in its finances. I am wary of its net debt which seems quite high and they are still on the hunt for potential acquisitions. I will keep a close eye on this one and will ensure a stop loss policy in £50 incremental is strictly followed (refer to TCM above for lesson learnt).

Had I not bought the following shares, the above in total results in a gain of £1,091! But it is all about diversification i.e. not putting all eggs into one basket!

FRP – Rather disappointing performance to date. Admittedly I got greedy when it went beyond £200 gain before it dwindled down to £200 loss just before xmas. It has since bounded back to £170 loss. I am still a believer of this share and it has got a high stockranking (refer to www.stockopedia.com). I will remain patient and hope the recent improvement will continue as we start the new year.

ETO – worst performer to date. Currently lagging, showing a loss of £447. I still believe in the story but looking back, I should have cut my loss when it went down 10% (£100). The performance of PAYS (as mentioned above) is the main factor behind my keeping this share. It has a huge media content (amounting to more than a billion dollars) and it now owns the majority of rights to Peppa Pig. Given China has just welcomed Peppa Pig in their country, I am expecting to see substantial income streams being generated from this move. I will be patient and monitor this as we go along. Having said that, I will be enforcing a stop loss of -50% for this one.

RGS – as one can see from my portfolio table, I had previously bought this and realised a loss of £200. It was not until it kept climbing that I decided to buy some. I am an admirer of the company RGS owns – Blancco – a data erasure company. Performance for the last three months has been dire – currently showing a loss of £11 (1%). I expect to see some improvements in the New Year.

PHTM – Highly cash generative and the board has agreed to return any cash above a certain threshold back to the shareholders. This to me confirms that both the board’s and shareholders’ interests are aligned. They are targeting the market in Japan (new ID legislation coming into force) and are diversifying with a new laundrette avenue. Will see how this pans out in the year to come. Currently showing a loss of £42 (4%)

IOM – a specialist in cloud computing. This has been bid for in the past and I am expecting another bid in due time. Currently showing a loss of £50 (5%).

Looking back in the year, there have been a couple of occasions where I had sold far too early. These include TSTL and TTR. Both of these shares have more than doubled by now. I would have been having a total gain of more than 20% – easier said than done. I am going to learn from this and try and let my winners run.

Recently I have signed up for a membership with Stockopedia. I have been looking for a tool which allows me to screen for shares using a set criteria. This along with their ‘StockRanks’ hooked me in. Should you wish to try it out – use the following link: http://j.mp/WozHTU

The discussion boards at Stockopedia are well worth checking out. Certain people have had successes with ‘StockRanks’ although it must be said that it should come with manual research before one buys a share. I intend to use this approach if I come across an interesting share.

My New Year resolution is to try and blog more often as it has been six months since I last blogged here!

 

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