Derek Pain: Driving ahead with plan for extended portfolio

No Pain, No Gain

The no pain, no gain portfolio is in need of recruits. Two unrelated influences make me anxious to inject fresh blood.

I remain convinced that 16 constituents represents the ideal strength for our modest exercise. Some readers have questioned my devotion to such a number. My reply is that a collection of 16 provides the opportunity for a small portfolio, aimed at buy and hold private investors, to cover an adequate mix of companies, both in terms of occupation and size. I would not complain about some slight deviation either side of 16 but I feel some discipline is necessary when conducting a manageable but broad operation, in effect a mini-unit trust.

My other concern is that current membership rests uneasily at unlucky 13. Even in the tough world of investment it is foolish to unnecessarily tempt fate. Such a sentiment may not be widely shared in these hard nose days but after more than 50 years in the City I feel it wise to try and cover all eventualities, even any regarded as nonsensical.

I already have three candidates for my bid to lift portfolio numbers. They certainly add up to a mixed bag, underlining that even a superstitious old soul is not afraid to indulge in the odd speculation.

Two are traded on the fringe Plus market, which houses many aspiring, unproven and often lightweight groups, The other is a multi-million pound constituent of the blue chip Footsie 100 index.

I mentioned my Plus twosome – Bluehone, a financial group, and NCI Vehicle Rescue – a few weeks ago. To balance such speculative additions I am, not for the first time, thinking of recruiting the Compass contract catering giant.

NCI is my favoured Plus recruit. It has no borrowings, £1m in the bank, pays a dividend and could produce profits of around £650,000 in the year ending March. Yet, at 25.5p a share, it is capitalised at only some £2.5m.

The company runs a road side breakdown service for cars, light vans as well as motor cycles. It also offers insurance services. Growth in recent years has been encouraging. In 2006 turnover was £849,000 leading to a £63,000 loss. Last year on revenue of £3.5m profits hit £165,000. In the first half of the current year sales rose to £2.9m with profits emerging at £340,000.

When NCI arrived in 2004, the fringe market still rejoiced under its original name, Ofex. Since then the shares have fluctuated, falling to around 4p and hitting a peak of 33p a few months ago.

I would not be surprised if NCI attracted a takeover bid in the not too distant future. In the meantime a modest shareholding re-allocation is, I hear, likely to take place involving the 6.9 per cent stake held by a company called Insurance Ventures. The shareholding is to be split between new shareholders although one of them, Mark Watson-Mitchell, is chairman of both NCI and Insurance Ventures, where he has an 18 per cent stake. He is, however, underlining his faith in NCI by buying 100,000 of the shares being sold.

I have decided to enlist NCI at 25.5p. I may well add Bluehone at a later date. The financial group arrived on Plus via a reverse take over of a company called Investments West Midlands. Since the deal went through the shares have more than doubled to 3p.

Bluehone is a fund manager focussed on small caps. It has also a cross shareholding with Evolve, an AIM-traded company that controls stockbroker Astaire. There are also links with small cap investor Elderstreet which has a significant stake in a portfolio constituent, SnackTime.

In its last half year Bluehone suffered a loss. But almost all the £173,000 deficit was due to costs associated with the reverse take over.

The rejuvenated Compass, of course, is an entirely different proposition. The dark days when it seemed beset by difficulties – the shares were less than 200p five years ago – are now but a distant memory. Pre-tax profits last year were up 36.6 per cent.

At 460p the shares are not cheap. But investment house Nomura has a 585p target. There is no rush to buy. With NCI taking the portfolio away from the dreaded 13 level, I am prepared to bide my time.

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

Arts and Entertainment
Books should be for everyone, says Els, 8. Publisher Scholastic now agrees
booksAn eight-year-old saw a pirate book was ‘for boys’ and took on the publishers
Life and Style
Mary Beard received abuse after speaking positively on 'Question Time' about immigrant workers: 'When people say ridiculous, untrue and hurtful things, then I think you should call them out'
tech
Life and Style
Most mail-order brides are thought to come from Thailand, the Philippines and Romania
life
News
i100
Life and Style
tech
Voices
Margaret Thatcher, with her director of publicity Sir Gordon Reece, who helped her and the Tory Party to victory in 1979
voicesThe subject is being celebrated by the V&A museum, triggering some happy memories for former PR man DJ Taylor
Finacial products from our partners
Property search
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Ashdown Group: Business Analyst - Financial Services - City, London

    £50000 - £55000 per annum: Ashdown Group: Business Analyst - Financial Service...

    SThree: Trainee Recruitment Consultant

    £18000 - £23000 per annum + OTE £45K: SThree: At SThree, we like to be differe...

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + competitive: SThree: Did you know? SThree is the o...

    Recruitment Genius: Administrator - IFA Based

    £22000 - £24000 per annum: Recruitment Genius: This is an opportunity to join ...

    Day In a Page

    General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

    Chuka Umunna: A virus of racism runs through Ukip

    The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
    Yemen crisis: This exotic war will soon become Europe's problem

    Yemen's exotic war will soon affect Europe

    Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
    Marginal Streets project aims to document voters in the run-up to the General Election

    Marginal Streets project documents voters

    Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
    Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

    The real-life kingdom of Westeros

    Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
    How to survive a social-media mauling, by the tough women of Twitter

    How to survive a Twitter mauling

    Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
    Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

    At dawn, the young remember the young

    A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
    Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

    Follow the money as never before

    Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
    Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

    Samuel West interview

    The actor and director on austerity, unionisation, and not mentioning his famous parents
    General Election 2015: Imagine if the leading political parties were fashion labels

    Imagine if the leading political parties were fashion labels

    Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
    Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

    Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

    The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence
    Public relations as 'art'? Surely not

    Confessions of a former PR man

    The 'art' of public relations is being celebrated by the V&A museum, triggering some happy memories for DJ Taylor
    Bill Granger recipes: Our chef succumbs to his sugar cravings with super-luxurious sweet treats

    Bill Granger's luxurious sweet treats

    Our chef loves to stop for 30 minutes to catch up on the day's gossip, while nibbling on something sweet
    London Marathon 2015: Paula Radcliffe and the mother of all goodbyes

    The mother of all goodbyes

    Paula Radcliffe's farewell to the London Marathon will be a family affair
    Everton vs Manchester United: Steven Naismith demands 'better' if Toffees are to upset the odds against United

    Steven Naismith: 'We know we must do better'

    The Everton forward explains the reasons behind club's decline this season
    Arsenal vs Chelsea: Praise to Arsene Wenger for having the courage of his convictions

    Michael Calvin's Last Word

    Praise to Wenger for having the courage of his convictions