How my shares have fared

Following a strict value investing approach I sold a lot of shares before and during the first Covid wave.  The pile of cash was very useful later in 2020 and 2021.  The shares bought in the last year or so have generally risen nicely.

A list of all the shares I bought in the crisis

(Newsletters published at the time of each purchase set out my rationale for buying)

Company	Purchase date		Purchase price		Divs to 31 Dec 2021		Price 31 Dec 2021		Return to 31 Dec 2021
Smiths News (Connect Group)	18.3.20		£0.151		zero		£0.376		149%
Character	5.6.20		£2.52		11p		£6.20		150%
McCarthy & Stone	1.10.20		£0.718		0		Sold 7 Dec 2020 £1.185		65%
Capital & Counties Properties	6.11.20		£1.032		0		Sold 19 Aug 2021 £1.743		69%
Dewhurst “A”	11.11.20		£5.94		13.50p		£6.20		7%
MS International	16.12.20		£1.292		8.25p		£2.10		69%
Wynnstay	29.12.20		£3.405		15p		£5.70		72%
Lloyds Bank	12.3.21		£0.4169		1.24p		£0.4819		19%
J Smart	18.3.21 & 24.3.21		£1.253		0.95p		£1.43		15%
Fletcher King	Feb 2020 – May 2021		£0.3265		0.5p		£0.40		24%
Orchard Funding	7.6.21		£0.568		3p		£0.50		-7%
Caffyns	22.6.21		£4.65		zero		£5.00		8%
Highcroft	22.7.21		£8.75		22p		£8.50		-1%
Town Centre Securities	10.8.21		£1.426		zero		£1.37		-4%
AVERAGE									45%

Longer run performance

Nine years ago that I left a tenured professorship to concentrate on investment.  Back then the FTSE 100 was around 6,600. It is now 7,400 – a slow rise. But there have been dividends of around 3% per year.

I believe the numbers in the tables below show that I have outperformed, which is quite a relief given the salary and security sacrifice I made nine years ago.

The tables display the results (so far) of all the shares bought for the portfolios I’ve been writing about in my Newsletters. The comments I made at the time explaining the rationale for each investment are available for you to read in older newsletters – there is nowhere for me to hide from my appraisals I made three, four or seven years ago – all the errors of omission and commission are there in broad daylight.

I present the returns after taking the hit on broker costs, stamp duty and bid/offer spread.

(Some of you have joined us recently so, in case you are not familiar with them, I briefly describe the criteria for my portfolios following the portfolio performance tables.)

The 2013 Net Current Asset Value, NCAV, portfolio

Company	Purchase date		Purchase price		Divs to 31 Dec 2021		Price 31 Dec 2021		Return to 31 Dec 2021
French Con.	25.7.13		£0.3047		zero		Sold July 2015 £0.4378		44%
Caledonian T	25.7.13		£0.70		zero		Sold April 2020 for £1.391		99%
Fletcher King	6.8.13		£0.30		14.25p		Sold June 2016 for 46p		101%
Northamber	22.8.13		£0.287		1.6p		Sold Oct 2016 £0.303		11%
Titon	5.9.13		£0.379		6.5p		Sold May 2016 £1.06		197%
Mallett	12.11.13		£0.7682		12.7p		Sold Nov 2014 £0.60		-5%
AVERAGE									75%

The 2014 NCAV portfolio

Company	Purchase date		Purchase price		Divs to 31 Dec 2021		Price 31 Dec 2021		Return to 31 Dec 2021
Holders Tech	10.10.14 & 3.11.14		£0.47		1p		Sold March 2017 £0.33		-28%
Airea	4.11.14		£0.1195		0.9p		Sold Sept 2016 £0.309		166%
Northamber	17.11.14		£0.4265		0.7p		Sold Oct 2016 £0.303		-27%
Caledonian T	30.12.14		£1.39		zero		Sold April 2020 £1.391		0
AVERAGE									28%

The 2015 NCAV portfolio

Company	Purchase date		Purchase price		Divs to 31 Dec 2021		Price 31 Dec 2021		Return to 31 Dec 2021
PV Crystalox	15.1.15		£0.122		zero		Sold Dec 2016 £0.237		94%
Arden Partners	1.9.15		£0.422		1p		Sold May 2018 £0.364		-11%
Northamber	4.9.15		£0.443		0.4p		Sold Dec 2016 £0.303		-31%
AVERAGE									17%

The Buffett-style portfolio

This type of share is rarer than the others, and so I combine all years.

Company	Purchase date		Purchase price		Divs to 31 Dec 2021		Price 31 Dec 2021		Return to 31 Dec 2021
Dewhurst	9.4.14		£3.18		70.5p		Sold February 2020 £7.217		149%
MS International	9.10.19		£1.723		11.75p		£2.10		29%
Character	20.1.20 & 5.6.20		£2.811		19p		£6.20		127%
Dewhurst	11.11.20		£5.94		13.5p		£6.20		7%
MS International	16.12.20		£1.292		8.25p		£2.10		69%
AVERAGE									76%

(I bought some more of Dewhurst in June 2014 at £3.11, December 2014 at £3.75, November 2017 at £5.46, February 2019 at £5.54 and April 2019 at £5.64. These were sold Feb 2020).

Modified price earnings ratio portfolio 2015/16

Company	Purchase date		Purchase price		Divs to 31 Dec 2021		Price 31 Dec 2021		Return to 31 Dec 2021
Haynes	11.2.15		£1.159		33.5p		Sold 2.10.19 £2.9175		181%
AGA	11.3.15		£1.002		zero		Taken over June 2015 £1.456		45%
Hogg Robinson	10.4.15		£0.4709		2.37p		Sold June 2016 £0.656		44%
MS International	3.7.15		£1.86		44.25p		£2.10		37%
BHP Billiton	24.9.15		£10.43		127p		Sold May 2018 £16.90		74%
TClarke	5.11.15		£0.7916		13.61p		Sold Feb 2020 £1.1215		59%
Premier Farnell	8.4.16		£1.222		3.6p		Taken over 20.6.16  £1.632		36%
AVERAGE									68%

The AGA holding was doubled 30 April 2015 at a price of £0.9466.

Modified price earnings ratio portfolio 2017

Company	Purchase date		Purchase price		Divs to 31 Dec 2021		Price 31 Dec 2021		Return to 31 Dec 2021
Braemar	28.6.17		£2.848		20p		Sold June 2018 £2.639		0%
Caffyns	10.8.17		£5.012		52.5p		Sold July 2020 £2.389		-42%
Connect/Smiths News	27.9.17		£1.046		10.8p		£0.376		-54%
MS International	14.11.17		£1.84		28.25p		£2.10		29%
AVERAGE									-17%

The 2017/18/19 NCAV portfolio

	Purchase date		Purchase price		Divs to 31 Dec 2021		Price 31 Dec 2021		Return to 31 Dec 2021
Caledonian Trust	7.11.17		£1.23		zero		Sold April 2020  £1.391		13%
J Smart	30.1.19		£1.13		4.14p		Sold Mar/Apr 2020 £1.101		1%
Northamber	6.12.19		£0.504		0.3p		Sold Mar 2020 £0.5717		14%
AVERAGE									9%

More Caledonian Trust shares bought in February 2019 at £2.29.

More J Smart bought 30.4.19 at £1.16

The 2018/2019 modified price-earnings ratio portfolio

	Purchase date		Purchase price		Divs to 31 Dec 2021		Price 31 Dec 2021		Return to 31 Dec 2021
Connect/Smiths News	14.6.18		£0.285		4.1p		£0.376		46%
N Brown	17.8.18		£1.42		9.93p		Sold Sept 2021 £0.557		-54%
Spaceandpeople	31.10.18		£0.224		0.5p		Sold Dec 2020 £0.128		-43%
Tandem	2.4.19		£1.59		9.49p		Sold Aug 2020 £3.707		139%
MS International	6.6.19		£2.22		18.25p		£2.10		3%
Character	25.10.19		£3.506		24p		£6.20		84%
AVERAGE									29%

More Connect Group shares bought in February 2019 at 40.86p, March 2019 at 38.29p and May 2019 at 39p.

More N Brown bought May 2019 at £1.30.

The 2020/21 modified price-earnings ratio portfolio

	Purchase date		Purchase price		Divs to 31 Dec 2021		Price 31 Dec 2021		Return to 31 Dec 2021
Wynnstay	7.1.20  & 29.12.20		£3.33		29p		£5.70		80%
Daejan	5.2.20		£52.90		zero		Sold 21 Feb 2020 £79.41		50%
Connect/Smiths News	18.3.20		£0.151		zero		£0.376		149%
Lloyds Bank	12.3.21		£0.4169		1.24p		£0.4819		19%
AVERAGE									75%

The 2020/21 NCAV portfolio

	Purchase date		Purchase price		Divs to 31 Dec 2021		Price 31 Dec 2021		Return to 31 Dec 2021
McCarthy & Stone	1.10.20		£0.718		0		Sold Dec 2020 118.5p		65%
Capital & Counties Properties	6.11.20		£1.032		0		Sold 19 Aug 2021 £1.743		69%
J Smart	18.3.21 & 24.3.21		£1.253		0.95p		£1.43		15%
Fletcher King	Feb 20 – May 2021		£0.3265		0.5p		£0.40		24%
Orchard Funding	7.6.21		£0.568		3p		£0.50		-7%
Caffyns	22.6.21		£4.65		zero		£5.00		8%
Highcroft	22.7.21		£8.75		22p		£8.50		-1%
Town Centre Securities	10.8.21		£1.426		zero		£1.37		-4%
AVERAGE									21%

The return reversal portfolio

	Purchase date		Purchase price		Divs to 31 Dec 2021		Price 31 Dec 2021		Return to 31 Dec 2021
Havelock Europa	20.5.15		£0.14609		zero		Sold Dec 2016 £0.0915		-37%
AVERAGE									-37%

Brief description of criteria for the portfolios

Shares are allocated to portfolios designed around ideas flowing from research conducted when my PhD students and I asked the question “what works in investment?”

These investigations were often inspired by the ideas of great investors such as Benjamin Graham.

More detail on these ideas is presented in earlier posts (if you put key words into the search box those Newsletters will appear).

Net current asset value, NCAV, criteria

1. Current asset values are taken from the balance sheet (e.g. inventory, receivables and cash).  From this total are deducted all the liabilities. Long term asset values are usually ignored (counted as zero).  Usually, further deductions are made to reduce inventory and receivable values to give a conservative bias.
2. Companies passing the quantitative test are also assessed qualitatively for business prospects, managerial ability/integrity and business stability.

Modified price earnings ratio criteria

1. A cyclically-adjusted price to earnings ratio (CAPE) significantly below average.  That is, a current share price divided by the earnings per share calculated as an average of eps over the last seven to ten years.
2. A high Piotroski score.  These nine factors indicate whether a company is strengthening its financial position and income flow.
3. Finally, and crucially, the same qualitative criteria as for NCAV investing.

Buffett-style criteria

1. A strong economic franchise,
2. Managers of integrity and talent,
3. Excellent accounting numbers, and
4. A reasonable price.

(There is much more on this in my books The Financial Times Guide to Value Investing, The Great Investors, The Deals of Warren Buffett or Warren Buffett’s letters)

Return reversal

1. Rank all shares based on their returns over the past five years. Select only the worst 20% of performers – “the losers”.
2. Examine each loser share using Piotroski criteria. Select only those with a high score.
3. Ensure that the company has a market capitalisation below its net tangible asset value
4. Use the same qualitative screening criteria as for NCAV investing…. To read more subscribe to my premium newsletter Deep Value Shares – click here http://newsletters.advfn.com/deepvalueshares/subscribe-1

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