Derek Pain: Hunger for action satisfied by a little Snack
No Pain, No Gain
Saturday 19 September 2009
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.
Mark Dampier: How to get an income now that savings are past the 'use by' date
Thousands of UK investors could lose out following collapse of Secured Energy Bonds
Bargain Hunter: Fly off for a winter break in France or Portugal for well under £100
Millions in line for compensation after being sold unnecessary credit card cover
Weekly Money: Round-up of the personal finance stories you may have missed 26-30 January
- 1 Three-year-old boy shoots pregnant mother and father in New Mexico
- 2 Stephen Fry explains what he would say if he was 'confronted by God'
- 4 Gorillaz Phase 4: Cartoon supergroup is back as new artwork is unveiled
Stephen Fry explains what he would say if he was 'confronted by God'
The open loathing between Barack Obama and Benjamin Netanyahu just got worse
9 reasons Greece's experiment with the radical left is doomed to failure
President Putin is a dangerous psychopath - reason is not going to work with him
Have we reached 'peak food'? Shortages loom as global production rates slow
Britain's widening poverty gap should be causing outrage at the start of the election campaign
iJobs Money & Business
£40000 - £50000 per annum: Recruitment Genius: This is an exciting opportunity...
£30000 - £35000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...
£13000 per annum: Recruitment Genius: This Pension Specialist was established ...
£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...
Day In a Page
A minimnalist four-bedroom home designed to the highest spec, featuring glass walls and a kitchen space lit by a glass roof
Hibernate during winter and make your living during the summer at this busy guesthouse with panoramic sea views, in the village of Lynton
A four-bedroom penthouse next to the Tate with direct views of St Paul's from two floors of luxurious living space
A four-bedroom detached home surrounded by spacious gardens and woodland, close to New Pudsey
An 18th-century, three-bedroom home near Langstone Harbour built from ships beams with vaulted ceilings and wood burning stoves
A five-bedroom semi-detached home with a mix of period and modern features in a popular and convenient location
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
A three-bedroom villa with self-contained flat, minutes from Lake Windermere
A deceptively spacious, beautifully presented Georgian home with 3000sq ft of living space and five reception rooms
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion