Derek Pain: Hunger for action satisfied by a little Snack

No Pain, No Gain

Confidence is a fragile flower but it seems to have taken root in the City. The stock market has made surprisingly strong progress already this year, yet optimism abounds that further near-term headway is achievable.

Take, for example, the comments of Jeremy Smith, who heads the UK equity operations at Neptune Investment Management. He reckons "people have been too negative for too long" and have underestimated just how quickly the UK is recovering. The FTSE 100 share index, he says, could hit 5,500 points "in short order". There are doubters, of course. Some expect, at best, a sideways movement; others suggest a sharp sell-off is inevitable.

What I find exhilarating is that so many cheerful souls are prepared to voice their forecasts. They are not afraid that events could provoke a Michael Fish moment and demonstrate their predictions to be utterly wrong.

Although I do not agree with the more joyous forecasts, I salute the bravery behind them nevertheless. If events do not, for example, follow Smith's perceived pattern then he is bound to suffer the slings and arrows that unlucky prophets are destined to endure.

Still, as I remarked last week, the current confident mood has helped the No Pain, No Gain portfolio to record its best performance for some while. Indeed, I was becoming quite depressed by the continuing erosion of its profit that had dwindled from near £150,000 to £77,000 earlier this year. At last week's count the gain was more than £96,000.

During the stock-market retreat, I recruited more largish companies than had been my custom. I felt size offered more security. And with my four up-market, fully listed stocks all making progress, I suppose my policy was justified. But I did not neglect small caps, recruiting three. Unfortunately only one, Clarity Commerce Solutions, has set the pulse racing, climbing from 29.5p to 48p at the time of writing.

Until the stock-market meltdown, the portfolio had actually concentrated largely on small caps. So, with shares appearing more confident, the time has arrived to recruit another little 'un. I said last month that SnackTime could be added to my notional portfolio and the shares have been recruited at 119p.

In response to my comments, the shares rose to 133p. They have since relapsed. I felt obliged to await publication of the yearly report and accounts before descending on the stock. The yearly missive appeared last week. I believe it justified my inclination to climb on board.

Of course, small caps are more risky than up-market shares. The portfolio has already lost more than one shirt backing very junior companies. Witness the losses also suffered on such shares as Pubs'n'Bars, which last week put a 10-pub subsidiary into administration, and GCO2. But, nothing ventured, nothing gained.

SnackTime, a vending-machine group, displays the innovative promise I admire and seems to be a well-run contender for higher honours. Borrowings do not appear to be too excessive. There is also the possibility that a bigger group will see its potential and embark on corporate action.

Hargreaves Services is one small cap that attracted the portfolio before the stock market surrendered. It is now a medium-sized player and, this week, enhanced its reputation with another splendid set of figures. The shares hit a 645p peak as underlying pre-tax profits reached £28.6m and "true" profits emerged 46.5 per cent higher at £26.2m. The year's dividend is lifted from 10.3p a share to 11.8p.

Tim Ross, the chairman, says the group, which has interests ranging over coal mining, transport and waste disposal, views the current year with "significant confidence".

Hargreaves arrived on the stock market almost four years ago. Its quoted record is impressive with underlying compound annual earnings per share up 51.5 per cent. An acquisitive animal, it has the ammunition to continue its expansion with £115m of new banking facilities signed up. Its war chest is now £155m.

The shares have certainly been a sound investment. The portfolio alighted on them at 417p in February, 2007. They did briefly dip below its buying price earlier this year as the recession tightened its grip and the stock market crashed. But Hargreaves appears to be one company to emerge from the horrors that blighted the nation in some style.

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

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

    SThree: Graduate Recruitment Resourcer

    £20000 per annum + commission: SThree: Sthree have an exciting opportunity for...

    Recruitment Genius: Telesales Executive - OTE £32,000+

    £18000 - £32000 per annum: Recruitment Genius: A Telesales Executive is requir...

    Ashdown Group: Marketing Manager - B2B, Corporate - City, London

    £45000 - £50000 per annum + benefits : Ashdown Group: A highly successful, glo...

    Neil Pavier: Commercial Analyst

    £50,000 - £55,000: Neil Pavier: Are you a professionally qualified commercial ...

    Day In a Page

    General Election 2015: The masterminds behind the scenes

    The masterminds behind the election

    How do you get your party leader to embrace a message and then stick to it? By employing these people
    Machine Gun America: The amusement park where teenagers go to shoot a huge range of automatic weapons

    Machine Gun America

    The amusement park where teenagers go to shoot a huge range of automatic weapons
    The ethics of pet food: Why are we are so selective in how we show animals our love?

    The ethics of pet food

    Why are we are so selective in how we show animals our love?
    How Tansy Davies turned 9/11 into her opera 'Between Worlds'

    How a composer turned 9/11 into her opera 'Between Worlds'

    Tansy Davies makes her operatic debut with a work about the attack on the Twin Towers. Despite the topic, she says it is a life-affirming piece
    11 best bedside tables

    11 best bedside tables

    It could be the first thing you see in the morning, so make it work for you. We find night stands, tables and cabinets to wake up to
    Italy vs England player ratings: Did Andros Townsend's goal see him beat Harry Kane and Wayne Rooney to top marks?

    Italy vs England player ratings

    Did Townsend's goal see him beat Kane and Rooney to top marks?
    Danny Higginbotham: An underdog's tale of making the most of it

    An underdog's tale of making the most of it

    Danny Higginbotham on being let go by Manchester United, annoying Gordon Strachan, utilising his talents to the full at Stoke and plunging into the world of analysis
    Audley Harrison's abusers forget the debt he's due, but Errol Christie will always remember what he owes the police

    Steve Bunce: Inside Boxing

    Audley Harrison's abusers forget the debt he's due, but Errol Christie will always remember what he owes the police
    No postcode? No vote

    Floating voters

    How living on a houseboat meant I didn't officially 'exist'
    Louis Theroux's affable Englishman routine begins to wear thin

    By Reason of Insanity

    Louis Theroux's affable Englishman routine begins to wear thin
    Power dressing is back – but no shoulderpads!

    Power dressing is back

    But banish all thoughts of Eighties shoulderpads
    Spanish stone-age cave paintings 'under threat' after being re-opened to the public

    Spanish stone-age cave paintings in Altamira 'under threat'

    Caves were re-opened to the public
    'I was the bookies’ favourite to be first to leave the Cabinet'

    Vince Cable interview

    'I was the bookies’ favourite to be first to leave the Cabinet'
    Election 2015: How many of the Government's coalition agreement promises have been kept?

    Promises, promises

    But how many coalition agreement pledges have been kept?
    The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat

    The death of a Gaza fisherman

    He built his own reef, and was fatally shot there by an Israeli gunboat