Derek Pain: Stock is struggling but it pays to stay positive

No Pain, No Gain

It's been a disappointing few months for the no pain, no gain portfolio. Although the stock market has performed reasonably well this year, some of my constituents have lost a little ground, thereby reducing the overall gain by some £1,500 to approaching £97,000.

I had expected a much stronger showing and enjoyed visions of again topping the £100,000 mark. But patience is a virtue when buying and selling shares and I remain hopeful of recapturing six figures although a return to those halcyon days when the portfolio sported a profit of nearly £150,000 is, quite clearly, a more distant dream.

Indeed three shares that made a major contribution to the portfolio's peak achievement are no longer involved. Goals Soccer Centres and restaurant chain Prezzo were sold below their top prices. Nevertheless they still produced handsome profits. Myhome International went belly-up. At one time the shares were offering a gain of more than £30,000 on the £5,000 investment. I did manage to retrieve a reasonable profit from the wreckage but the thought of all that lost cash still haunts me.

Hargreaves Services, the coal to waste disposal conglomerate, is one which has lost some recent strength. The weakness followed confirmation that talks are on with UK Coal. According to Hargreaves it is "cautiously reviewing" a potential merger. Such a move could represent an exciting expansion. Presumably any deal would revolve around UKC's mining interests and exclude its 43,500 acre land bank and related property developments.

Although it is only 16 years old, ambitious Hargreaves is the larger of the two companies. It has just one mine whereas UKC has four deep mines and another four surface sites.

The stock market dislikes uncertainty and I suspect the shares will display little enthusiasm until any deal is done and dusted. Price is another important factor; so is the daunting prospect of shed loads of shares being issued.

Mears, the social housing and home care group, is just ahead of my buying price. There are worries the group could be hit by public sector cutbacks. But chairman Bob Holt remains bullish saying most revenue comes from areas "where spend is largely non-discretionary". Pressure on public spending could actually prompt more local authorities to engage with Mears, he believes.

The group's order book has climbed to a record £2bn and the bid pipeline is £3.9bn. "True" pre-tax profit emerged at £18.4m (£16.6m) and stockbroker Investec is looking for a normalised return this year of £30.5m which would compare with £23.4m.

I am fairly happy with most constituents and remain on the look-out for recruits. Nighthawk Energy, the US focused oil and gas group, is causing some concern and I could be minded to dump the shares if they continue to decline.

They have had a horrendous time since hitting a 116p peak in 2008. In the past year the price topped 50p but has since been in ragged retreat. The group's latest pronouncement, an update on its star-rated Jolly Ranch development, left the stock market distinctly unimpressed. The shares have dropped from around 35p this year.

My two remaining walking wounded, Lighthouse and Private & Commercial Finance, which have inflicted hideous losses on the portfolio, should, of course, have been sold long ago.

Still a few grains of encouragement lurk. Lighthouse, the accountancy and wealth management group, has re-affirmed it is "cash generative, profitable and dividend paying". Indeed it is one of the companies bringing forward for tax reasons a dividend distribution.

PCF, a hire-purchase group, has so far proved to be impervious to stockbroker Daniel Stewart's entreaties that the shares represent a "compelling" buy. The 15p target price seems even more distant.

The portfolio's two Plus shares have experienced contrasting fortunes. My most recent addition, NCI Vehicle Rescue, has motored ahead but English Wines Group, which was enlisted more than three years ago, has lacked the fermentation I expected. Like NCI, I regard it as a long-term investment but its display has been so subdued that I am wondering whether to hold on.

I am looking at a couple of other possible Plus recruits. My worry is that the portfolio could become overweight in what is essentially a fringe share platform. Perhaps a blue chip and just one more Plus stock would be a satisfactory compromise? I hope to resolve the problem before the next update in June.

PROMOTED VIDEO
Arts and Entertainment
Christian Grey cradles Ana in the Fifty Shades of Grey film
filmFifty Shades of Grey trailer provokes moral outrage in US
Travel
travel
Life and Style
The veteran poverty campaigner Sir Bob Geldof issues a stark challenge to emerging economies at the Melbourne HIV/Aids conference
health
Arts and Entertainment
Benedict Cumberbatch and John Malkovich talk Penguins of Madagascar at Comic-Con
comic-con 2014Cumberbatch fans banned from asking about Sherlock at Comic-Con
Arts and Entertainment
Chris Pratt stars in Guardians of the Galaxy
filmGuardians Of The Galaxy should have taken itself a bit more seriously, writes Geoffrey Macnab
News
Sir Chris Hoy won six Olympic golds - in which four events?
news
Life and Style
People may feel that they're procrastinating by watching TV in the evening
life
Finacial products from our partners
Property search
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

    Trainee Recruitment Consultants - Banking & Finance

    £20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

    Graduate Recruitment Resourcers - Banking Technologies

    £18000 - £25000 per annum + OTE £40,000: SThree: Huxley Associates are looking...

    Associate Recruitment Consultant - IT

    £20000 - £25000 per annum + OTE £40,000: SThree: Computer Futures has been est...

    Business Analyst

    £300 - £350 per day: Orgtel: Job Title: Business Analyst Rate: £300 - £350 per...

    Day In a Page

    Backhanders, bribery and abuses of power have soared in China as economy surges

    Bribery and abuses of power soar in China

    The bribery is fuelled by the surge in China's economy but the rules of corruption are subtle and unspoken, finds Evan Osnos, as he learns the dark arts from a master
    Commonwealth Games 2014: Highland terriers stole the show at the opening ceremony

    Highland terriers steal the show at opening ceremony

    Gillian Orr explores why a dog loved by film stars and presidents is finally having its day
    German art world rocked as artists use renowned fat sculpture to distil schnapps

    Brewing the fat from artwork angers widow of sculptor

    Part of Joseph Beuys' 1982 sculpture 'Fettecke' used to distil schnapps
    BBC's The Secret History of Our Streets reveals a fascinating window into Britain's past

    BBC takes viewers back down memory lane

    The Secret History of Our Streets, which returns with three films looking at Scottish streets, is the inverse of Benefits Street - delivering warmth instead of cynicism
    Joe, film review: Nicolas Cage delivers an astonishing performance in low budget drama

    Nicolas Cage shines in low-budget drama Joe

    Cage plays an ex-con in David Gordon Green's independent drama, which has been adapted from a novel by Larry Brown
    How to make your own gourmet ice lollies, granitas, slushy cocktails and frozen yoghurt

    Make your own ice lollies and frozen yoghurt

    Think outside the cool box for this summer's tempting frozen treats
    Ford Fiesta is UK's most popular car of all-time, with sales topping 4.1 million since 1976

    Fiesta is UK's most popular car of all-time

    Sales have topped 4.1 million since 1976. To celebrate this milestone, four Independent writers recall their Fiestas with pride
    10 best reed diffusers

    Heaven scent: 10 best reed diffusers

    Keep your rooms smelling summery and fresh with one of these subtle but distinctive home fragrances that’ll last you months
    Commonwealth Games 2014: Female boxers set to compete for first time

    Female boxers set to compete at Commonwealth Games for first time

    There’s no favourites and with no headguards anything could happen
    Five things we’ve learned so far about Manchester United under Louis van Gaal

    Five things we’ve learned so far about United under Van Gaal

    It’s impossible to avoid the impression that the Dutch manager is playing to the gallery a little
    Screwing your way to the top? Good for Lana Del Rey for helping kill that myth

    Screwing your way to the top?

    Good for Lana Del Rey for helping kill that myth, says Grace Dent
    Will the young Britons fighting in Syria be allowed to return home and resume their lives?

    Will Britons fighting in Syria be able to resume their lives?

    Tony Blair's Terrorism Act 2006 has made it an offence to take part in military action abroad with a "political, ideological, religious or racial motive"
    Beyoncé poses as Rosie the Riveter, the wartime poster girl who became a feminist pin-up

    Beyoncé poses as Rosie the Riveter

    The wartime poster girl became the ultimate American symbol of female empowerment
    The quest to find the perfect pair of earphones: Are custom, 3D printed earbuds the solution?

    The quest to find the perfect pair of earphones

    Earphones don't fit properly, offer mediocre audio quality and can even be painful. So the quest to design the perfect pair is music to Seth Stevenson's ears
    US Army's shooting star: Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform

    Meet the US Army's shooting star

    Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform