Derek Pain: Recent recruits put my portfolio in the money

No Pain, No Gain

The stock market has been experiencing one of those uncertain runs that occur every so often. Some alleged experts suggest investors are at last appreciating the increasing difficulties facing the world's economy, while others maintain that shares are cheap and offer inviting returns. I am on the side of the bulls; there is still much to go for, and there is absolutely no reason why anyone should be panicked into selling sound stocks.

Since my last quarterly review, the no pain, no gain portfolio has edged ahead and is now in the money to the tune of some £107,000. I owe a considerable debt of gratitude to my last three recruits: Avation, Capital Pub Co and Rivington Street Holdings.

I was a little slow alighting on Avation and Capital, and I cannot help reminding myself that if I had been a shade more adventurous, this chalk-and-cheese twosome would have made an even greater contribution to the portfolio's wealth. After all, Avation was 58p when I first commented on the aircraft leasing group, and Capital was around 105p. I eventually climbed aboard at 83.5p and 120p in January.

My timing was rather better with Plus-traded Rivington. It arrived a few months earlier at 27.5p; as I write the shares are 49.5p, pricing the rapidly expanding conglomerate at approaching £20m. I expect further progress. Indeed it seems one investor has acquired shares at 57p.

Major shareholder is chief executive Tom Winnifrith, with around 30 per cent of the capital. The City's takeover panel has decreed that without triggering an obligation to mount a full bid he may continue to increase his interest through share buybacks and exercising options, but not via stock market purchases.

In a trading update, covering the first eight months of its current year, Rivington, still ignored by institutions, appears supremely confident. Underlying pre-tax profits – up 177 per cent at nearly £1.1m at the six months stage – are still in line with expectations. In addition to profitable operations, such as the group's corporate side, which continue to do well, losses at a subsidiary have probably been eliminated, and it could end the year in a break-even position or even in profit. In the first half this particular off-shoot lost some £200,000. And losses at the recently launched cut-price stock-broking business are decreasing and profitability is in sight.

Subscriptions for the group's latest EIS fund closed this week, and there are plans for another unit trust, this time concentrating on India. In recent times Rivington has been extremely acquisitive. But in the past few months deals have been conspicuous by their absence. Still, it remains on the look-out, but insists it will not overpay.

Elsewhere in the portfolio, Booker, the cash and carry chain, and Hargreaves Services, the coal-mining to transport group, have performed encouragingly. Even Mears, the support services group, has shown signs of overcoming the weakness which followed year's results. After falling below 240p, the shares laboriously climbed to 280p – putting the portfolio in profit – but are now round 267p.

A former constituent, Printing.com, has produced year's figures. The group, which at the time of its exclusion ranked as the longest-serving portfolio member, suffered a 23.1 per cent pre-tax profits fall to £1.31m. Still, the dividend was held, putting the shares, at 36p, on a remarkable 8.75 per cent yield. But with profits in decline I wonder just how much longer it can hold the payment. The portfolio does not benefit at all from dividend payments and my decision to sell, taken reluctantly in view of what was an association going back to 2004, has been justified as the shares remain near my selling price. Printing.com and Private & Commercial, the hire purchase group, were the casualties when Avation and Capital were recruited.

I remain on the hunt for additions. I am still debating the merits of Wm Morrison, the supermarket group. Its apparent pursuit of Iceland, the frozen food chain, could prompt some uncertainty. Besides the possibility of more shares being issued, investors may recall that its last major takeover, the Safeway supermarket group, in 2004 took rather a long time to bed down. Morrison has also been gobbling up its own shares – an exercise I am not keen on.

PROMOTED VIDEO
Arts and Entertainment
AKB48 perform during one of their daily concerts at Tokyo’s Akihabara theatre
musicJapan's AKB48 are one of the world’s most-successful pop acts
News
Ian Thorpe has thanked his supporters after the athlete said in an interview that he is gay
people
News
The headstone of jazz great Miles Davis at Woodlawn Cemetery in New York
news
Arts and Entertainment
Brendan O'Carroll has brought out his female alter-ego Agnes Brown for Mrs Brown's Boys D'Movie
filmComedy holds its place at top of the UK box office
News
newsBear sweltering in zoo that reaches temperatures of 40 degrees
Arts and Entertainment
Professor Kathy Willis will showcase plants from the Royal Botanic Gardens at Kew
radioPlants: From Roots to Riches has been two years in the making
Arts and Entertainment
TV The follow-up documentary that has got locals worried
Arts and Entertainment
Eminem's daughter Hailie has graduated from high school
music
Arts and Entertainment
Original Netflix series such as Orange Is The New Black are to benefit from a 'substantial' increase in investment
TVHoax announcement had caused outrage
Life and Style
Swimsuit, £245, by Agent Provocateur
fashion

Diving in at the deep end is no excuse for shirking the style stakes

News
One Direction star Harry Styles who says he has no plans to follow his pal Cara Delevingne down the catwalk.
peopleManagement confirms rumours singer is going it alone are false
Finacial products from our partners
Property search
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

    Information Security Manager (ISO 27001, Accreditation, ITIL)

    £70000 per annum: Harrington Starr: Information Security Manager (ISO 27001, A...

    Biztalk - outstanding opportunity

    £75000 - £85000 per annum + ex bens: Deerfoot IT Resources Limited: Biztalk Te...

    Trade Desk Specialist (FIX, Linux, Windows, Network Security)

    £60000 per annum: Harrington Starr: Trade Desk Specialist (FIX, Linux, Windows...

    Service Desk Analyst (Windows, Active Directory, ITIL, Reuter)

    £35000 per annum: Harrington Starr: Service Desk Analyst (Windows, Active Dire...

    Day In a Page

    Super Mario crushes the Messi dream as Germany win the 2014 World Cup in Brazil

    Super Mario crushes the Messi dream

    Germany win the 2014 World Cup in Brazil
    Saharan remains may be evidence of the first race war, 13,000 years ago

    The first race war, 13,000 years ago?

    Saharan remains may be evidence of oldest large-scale armed conflict
    Scientists find early warning system for Alzheimer’s

    Scientists find early warning system for Alzheimer’s

    Researchers hope eye tests can spot ‘biomarkers’ of the disease
    Sex, controversy and schoolgirl schtick

    Meet Japan's AKB48

    Pop, sex and schoolgirl schtick make for controversial success
    Iraq crisis: How Saudi Arabia helped Isis take over the north of the country

    How Saudi Arabia helped Isis take over northern Iraq

    A speech by an ex-MI6 boss hints at a plan going back over a decade. In some areas, being Shia is akin to being a Jew in Nazi Germany, says Patrick Cockburn
    The evolution of Andy Serkis: First Gollum, then King Kong - now the actor is swinging through the trees in Dawn of the Planet of the Apes

    The evolution of Andy Serkis

    First Gollum, then King Kong - now the actor is swinging through the trees in Dawn of the Planet of the Apes
    You thought 'Benefits Street' was controversial: Follow-up documentary 'Immigrant Street' has got locals worried

    You thought 'Benefits Street' was controversial...

    Follow-up documentary 'Immigrant Street' has got locals worried
    Refugee children from Central America let down by Washington's high ideals

    Refugee children let down by Washington's high ideals

    Democrats and Republicans refuse to set aside their differences to cope with the influx of desperate Central Americas, says Rupert Cornwell
    Children's books are too white, says Laureate

    Children's books are too white, says Laureate

    Malorie Blackman appeals for a better ethnic mix of authors and characters and the illustrator Quentin Blake comes to the rescue
    Blackest is the new black: Scientists have developed a material so dark that you can't see it...

    Blackest is the new black

    Scientists have developed a material so dark that you can't see it...
    Matthew Barzun: America's diplomatic dude

    Matthew Barzun: America's diplomatic dude

    The US Ambassador to London holds 'jeans and beer' gigs at his official residence – it's all part of the job, he tells Chris Green
    Meet the Quantified Selfers: From heart rates to happiness, there is little this fast-growing, self-tracking community won't monitor

    Meet the 'Quantified Selfers'

    From heart rates to happiness, there is little this fast-growing, self-tracking community won't monitor
    Madani Younis: Five-star reviews are just the opening act for British theatre's first non-white artistic director

    Five-star reviews are just the opening act for British theatre's first non-white artistic director

    Madani Younis wants the neighbourhood to follow his work as closely as his audiences do
    Mrs Brown and her boys: are they having a laugh?

    Mrs Brown and her boys: are they having a laugh?

    When it comes to national stereotyping, the Irish – among others – know it can pay to play up to outsiders' expectations, says DJ Taylor