Category: Slow Trader Hedge Fund

As with the last post, IDH are showing a weak buy signal. IDH, however, have performed well over the last year. Anything at or below £5.20 would be good.

Buy a small amount of Globo PLC. The share has averaged 60 pence since November and more recently 50 pence. So not great. It is presently showing a weak buy signal. But worthy of consideration.

The FTSE 100 as a whole is indicating readiness for an upwards turn. We can take advantage of this.

Consider taking some more HL. shares if you are able.

A reminder that although I only look at the company, and not the wider economic picture, it is worth noting that traditionally shares have gone down considerably at some point in many Aprils. This did not happen until May last year. However, last year was very bullish – which of course means the market was climbing. This year, it is considered, is different.

• Here’s three FTSE 250 shares on my buy watch list
• These companies are not part of our gold list
• They have not had all their numbers considered
• This is simply from the charts
• They could go up over the next few weeks

Bovis Holmes Group Plc – BVS

City of London Investment Trust – CTY

Croda International PLC – CRDA

Ansys Inc is an engineering software company. They employ some 2,600 people and have over 75 positions worldwide for sales. They provide software engineering simulation solutions for just about anything, from Ferrari to biomedical.

Price/Earnings is high at 41, which means their share sells at 41 times earnings. For an engineering company this is high but for a software company it is not unusual.

Everything else about the companies numbers looks good, indeed their last report was above expectations.

A slightly early call, but they have a good buy position developing at about $76.

If you didn’t get any Aggreko shares last month you now have a slightly better window to buy. Aggreko plc provides power and temperature control solutions to customers who need them either very quickly, or for a short or indeterminate length of time.

Rupert Soames is to step down as Group Chief Executive of Aggreko, after 11 years, to be CEO of Serco Group plc. This announcement had an effect on the share price sending it unexpectedly, and possibly unreasonably, down a pound in share value. 

Aggreko have a strong management team and a capable interim CEO in the Chef Finance Officer until a replacement for Mr Soames is found.

Mr Soames said: “I have loved every minute of my time with Aggreko. Our customers, the essential nature of our services and above all our people make it an outstanding company and I am proud to have played a part in its successful growth over the past 11 years. But there comes a time when all CEOs need to move on and now, with a new five year strategy in place and an exceptionally strong executive team running the business, that time has come. Aggreko is a great company with great people and I wish Angus and the team every success.”

The recent final report for Aggreko was steady and they have made a good start to 2014. They have a probable contract in Libya but, because of volatility in that country, they have not included, for now, any benefit in their order book. Aggreko are taking the view that a libyan contract is ‘icing on the cake’.

We have an early, and tentative, buy signal for Aggreko.

On 24th February I said the market would drop. I was about two weeks too early and, it would seem, the correction down is to be lighter than I first thought.

Many shares have corrected down and are about to bottom out, others are in the process of dropping. Some shares have stayed strong with the occasional one climbing.

You may wonder, if you’re buying for the longer term, why should you be concerned about buying a share at the right price. What does it matter after several years if you bought a few pence higher. And you would be right, over the longer term. A wonderful company is a wonderful company.

However, in the short term, until we get established with the share, a correct buy can be essential for not loosing money. If we get it wrong, but we have bought at the right price (or more importantly at the right phase of the share), then we can more easily limit the damage to our fund. Also, if the market as a whole takes a drop then having bought in the correct phase we again can more easily reduce our potential looses.

This doesn’t always hold true, but at least we will have done our best to minimise our risk. Buying in small chunks (the size of the chunks depends on you and your fund) gives you the chance to get to know the share and possibly leave you with some cash to buy more if and when a share takes an unexpected drop but remains a wonderful company.

Warren Buffett said…..”some things just take time: you can’t produce a baby in one month by getting nine women pregnant”.

This introduces you to Altisource. They are all about real estate and mortgage portfolio management and online property sales through Hubzu. 23,000 homes sold online in 12 months. However, they make more money on homes sold through auction than online.

Warren Buffett wrote in his 1989 letter to Berkshire shareholders:

“It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.  Charlie understood this early; I was a slow learner.  But now, when buying companies or common stocks, we look for first-class businesses accompanied by first-class managements.”

Altisource is a solid company with respected management.

The mortgage servicing industry has steady growth. It does not have the regular boom/bust cycles of commodity industries. Or, the risk of a technological shift that can make those industries obsolete.  On the other hand, mortgage servicing is a competitive business.

Altisource provides access to an attractive growth business with low risk and, at present, at a reasonable valuation.

A buy signal may take a few days or even weeks yet. The share price has dropped recently which has made it attractive. The share price is climbing again and as I think it is about midway already in this climb I am going to wait until it drops slightly on a profit taking correction. At the bottom of that future correction I plan to buy. Will keep you posted.

Playtech PLC develop software for online gaming. They have 3000 employees in 12 countries. Majority of their business, however, is in Europe with most of the remainder in Asia. They own Bet365 and mobile poker sites. Moved to Isle of Man from British Virgin Islands in 2012. New Chairman appointed in October last year. Casino is half of total sales. They recently sold William Hill online for £424 million, providing over £300 million on original investment. Playtech have signed with Ladbrokes to provide a full product suite and Paddy Power put its live casino with Playtech. Sports betting is Playtech’s key focus for 2014 and beyond.

The share price has been sharply up and down recently. Their recent end of year financial report remains steady with the share price possibly effected by dividend payments, good final report and the sale of William Hill online.

I have a buy signal, albeit early and needs time to move. However, if you’re prepared to risk some down movement then over the next few trading days this could be a good time to buy more Playtech.

Rotork, an actuator manufacturer and flow control company, are in the process of purchasing Young Tech. Co. Limited.

Since our last post this share has performed well, climbing from about £25 to nearly £28. The share with our target value of about £37 is still strong. However, in the near term, from the charts and with the acquisition of Young Tech, I think the share price could drop back to the £25 mark.

You invest for the longer term but consider taking profits on this for the time being.

Okay, not the most stable US share to kick us off, but for the longer term this may be a place to start.

Copa Holdings is a passenger and cargo airline service headquartered in Panama City.

They have 66 destinations in 29 countries  in North, Central and South America and the Caribbean with one of the youngest and most modern fleets in the industry, comprising 90 aircraft: 64 Boeing 737NG and 26 EMBRAER-190s.

Copa also provide services within Colombia, and international flights from various cities in Colombia to Panama, Venezuela, Ecuador, México, Cuba, Guatemala, and Costa Rica.

Panama’s currency is pegged at par with the US dollar. Therefore, not likely to be affected by currency fluctuations. Also, Panama’s growth, boosted by generous business tax concessions, is projected, by the IMF, to outpace the world until 2017.

Recently, the Venezuelan President announced that his country was severing diplomatic and commercial ties with Panama. Venezuela accounts for 10% of Copa’s 2014 revenue. Copa also has $487 million trapped in Venezuela and is non-transferable under the current political turmoil. This is about 19% of its 2013 operating revenue. However, Copa management has announced that flights to Venezuela are still operational.

Copa’s shares were down about 8% on this news to about $126. As I said in my last article, the concept of buying say 10 shares is hard when you were used to buying a hundred or more UK shares.

This could be a good time to buy if you are a value investor. I’m personally going to wait for the share to turn upwards again. Albeit this could happen quickly. I’ll keep you posted.

You may want to see if your online broker will allow you to invest in US shares. One of our subscribers uses Stocktrade, through a nominee account, to do this. US shares can be more active than UK shares, they tend to have a higher volume and you have more companies to choose from. You will find a greater range of share price too. If you trade in the UK you will normally buy shares from just a few pence up to £20 or so. On that, be careful when buying shares in the pence range due to their volatility. US shares, on the other hand, range from several hundred dollars to cents. Normally we would not consider a share below $10. Remember, the share price does not reflect the value of the company. The Brits seem to prefer a lower share price. But holding 10 shares in a US company and 100 in a similar UK company has no advantage or disadvantage for you other than the feeling of holding fewer shares. If the share price goes up or down it is still going to have the same relative effect on your fund.

Tracsis PLC is a consideration right now to increase, or start, your holding. They have climbed in share price very well since our last post. They will release their mid-year report in a few weeks.

TRCS provide software scheduling solutions for bus and rail transport systems in the UK and Australia. A few weeks ago it was reported in the media that they had acquired a sale in Ireland.

Awarded small cap company of the year. Sales are about the 10 million mark so they are small in public company terms.

Buy.

As you know, IDH have been a past favourite of slowtrader. Nothing exciting to report on the  company or its product: they sell immunoassay kits – many home pregnancy tests are immunoassays.

However, they have shown steady share price growth for the last year with few down turns. A small buy signal is slowly developing, I will buy some more IDH either today or early next week.

End-of-year final results for AMS were good. Share price jumped from about £1.10 to £1.18. This could be the stimulus the share needed as its been quiet this year so far. Personally I’m going to wait for the next buy signal which, I accept, may mean missing on a good up.

As a reminder AMS are a medical technology company that sell advanced wound care products.

The Group operates mainly in the UK, the Netherlands, Germany, the Czech Republic and Russia, with a sales office located in the USA.

They are debt free and, founded in 1991, they employ 450.

Sales and net profit have increased nicely and profit margin is steady. However, administrative cost is high, slightly, as is inventory. They have a new Chairman and the CEO sold a substantial amount of shares in AMS yesterday. So, I’m waiting and will of course let you know when a strong buy signal happens.