No Pain, No Gain: Stock market bull run is no fun for this investor

The No Pain, No Gain portfolio has, sadly, failed to reap any benefit from the stock market's recent bull run. Since I last discussed its performance two hitherto profitable constituents have fallen into the red; one of them collapsing quite alarmingly.

Lennox is the source of my dismay. The food and drink distributor operating in Spain has had an appalling time, with an unseemly boardroom bust-up followed by a pathetic set of interim figures. Not surprisingly the shares are pale shadows of their former selves. They are now 33.5p (after crashing to 22p) against 64.5p when recruited. It is difficult to see things getting much better.

Peter Voller, the ousted chief executive, still sits on 21.54 per cent of the capital and has probably been deterred from selling his stake by the slump in the share price. Until cleared the overhang will remain a drag on the shares. Clearly Lennox is an uncomfortable setback for the portfolio. Should the shares fall further - say to 20p - they will be sold without further ado.

The group managed a profit of only £93,000 at the half-year stage. It looks as though it will struggle to reach the £1.7m produced in its last full year. I am surprised by the upbeat nature of its interim statement. It is impossible to ignore the feeling that the Lennox management is more than happy with the display. But, worryingly, it offers little guidance on likely second-half profits.

The Lennox setback has contributed to the portfolio's profit shrinking to around the £72,000 mark. With the stock market enjoying something of a charge - FTSE has topped 5,500 points - such an outcome is disappointing. Still the occasional hiccup is to be expected and although Lennox and one or two other constituents are causing some anxiety I am not at the moment planning any major changes. Indeed with the stock market seemingly in good form there must be every chance that the portfolio will resume its profits progress.

Its true that the economy is encountering a few stresses and strains but shares remain cheap and in these low interest rate days many provide enticing yields. It is not difficult to alight on major companies, with solid records and reasonable prospects, offering handsome returns, often above four per cent. Shares of the portfolio's two FTSE constituents, the brewer Scottish & Newcastle and support services group Rentokil Initial, are on at least four per cent yields.

Rentokil, endearingly referred to in the stock market as the "royal rat catcher", remains at the centre of one of the most fascinating and outrageous takeover bids the City has ever witnessed. Sir Gerry Robinson's pursuit of the group has been well documented and I do not intend to dwell on the manoeuvring taking place.

Suffice to say I will probably stick with the management, although I could be tempted to snub both predator and defender and snatch a modest profit.

I will not be a party to supporting Sir Gerry's exorbitant signing on fee. I appreciate that as chairman of the drinks group Allied Domecq, he helped the portfolio to a handsome profit when Pernod Ricard mounted a £7.4bn takeover. But his efforts at Allied, where he behaved as a conventional chairman, have little in common with his machinations at Rentokil.

Besides Scottish and Rentokil my only major player is Stagecoach, the bus and train group. I am pleased to see that its shares have recovered from a poor run that took them down to nearly 100p. At 112.5p, they also offer a sound yield - 3.1 per cent.

Yields are not so important down among the smallcaps where most of the portfolio's cash is invested. The stock market undercard contains a host of relatively young and (hopefully) growing companies. Many cannot afford to pay dividends.

If their resources are sufficiently strong that they are able to grow and reward shareholders at the same time then investors get the best of both worlds. Of the portfolio members six do not pay dividends (although one is promising its first distribution) and two have recently joined the dividend list but have so far been content with modest payments.

Dividend payments play no part in my calculations when charting the progress of the portfolio. My shares sink or swim on their stock market display.

On the other side of the equation I should point out that dealings costs are excluded and I rely on the mid-market price. I realise that this formula can sometimes give me a modest advantage over other investors but it was chosen for a very good reason - old fashioned and often-neglected transparency.

cash@independent.co.uk

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

News
Destructive discourse: Jewish boys look at anti-Semitic graffiti sprayed on to the walls of the synagogue in March 2006, near Tel Aviv
news

As anti-Semitic attacks rise, Grant Feller re-evaluates his identity

Life and Style
food and drink

Savoury patisserie is a thing now

News
people Biographer says cinema’s enduring sex symbol led a secret troubled life
News
newsGlobal index has ranked the quality of life for OAPs - but the UK didn't even make it into the top 10
PROMOTED VIDEO
News
people

Kirstie Allsopp has waded into the female fertility debate again

News
In 2006, Pluto was reclassified as a 'dwarf planet'
scienceBut will it be reinstated?
News
people
News
Researchers say a diet of fatty foods could impede smell abilities
scienceMeasuring the sense may predict a person's lifespan
Sport
footballArsenal 4 Galatasaray 1: Wenger celebrates 18th anniversary in style
News
peopleStella McCartney apologises over controversial Instagram picture
News
Gillian Anderson was paid less than her male co-star David Duchovny for three years while she was in the The X-Files until she protested and was given the same salary
people

Gillian Anderson lays into gender disparity in Hollywood

Life and Style
Laid bare: the Good2Go app ensures people have a chance to make their intentions clear about having sex
techCould Good2Go end disputes about sexual consent - without being a passion-killer?
Arts and Entertainment
Richard Burr remains the baker to beat on the Great British Bake Off
tvRichard remains the baker to beat as Chetna begins to flake
Life and Style
fashionThe Secret Angels all take home huge sums - but who earns the most?
Sport
football

Striker ignored Brendan Rodger's request to applaud audience

News
i100
Arts and Entertainment
Amazon has added a cautionary warning to Tom and Jerry cartoons on its streaming service
tv
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 Consultant - Birmingham - Real Staffing

    £18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...

    Trust Accountant - Kent

    NEGOTIABLE: Austen Lloyd: TRUST ACCOUNTANT - KENTIf you are a Chartered Accou...

    Graduate Recruitment Consultant - 2013/14 Grads - No Exp Needed

    £18000 - £20000 per annum + OTE £30000: SThree: SThree are a global FTSE 250 b...

    Law Costs

    Highly Competitive Salary: Austen Lloyd: CITY - Law Costs Draftsperson - NICHE...

    Day In a Page

    Italian couples fake UK divorce scam on an ‘industrial scale’

    Welcome to Maidenhead, the divorce capital of... Italy

    A look at the the legal tourists who exploited our liberal dissolution rules
    Tom and Jerry cartoons now carry a 'racial prejudice' warning on Amazon

    Tom and Jerry cartoons now carry a 'racial prejudice' warning on Amazon

    The vintage series has often been criticised for racial stereotyping
    An app for the amorous: Could Good2Go end disputes about sexual consent - without being a passion-killer?

    An app for the amorous

    Could Good2Go end disputes about sexual consent - without being a passion-killer?
    Llansanffraid is now Llansantffraid. Welsh town changes its name, but can you spot the difference?

    Llansanffraid is now Llansantffraid

    Welsh town changes its name, but can you spot the difference?
    Charlotte Riley: At the peak of her powers

    Charlotte Riley: At the peak of her powers

    After a few early missteps with Chekhov, her acting career has taken her to Hollywood. Next up is a role in the BBC’s gangster drama ‘Peaky Blinders’
    She's having a laugh: Britain's female comedians have never had it so good

    She's having a laugh

    Britain's female comedians have never had it so good, says stand-up Natalie Haynes
    Sistine Chapel to ‘sing’ with new LED lights designed to bring Michelangelo’s masterpiece out of the shadows

    Let there be light

    Sistine Chapel to ‘sing’ with new LEDs designed to bring Michelangelo’s masterpiece out of the shadows
    Great British Bake Off, semi-final, review: Richard remains the baker to beat

    Tensions rise in Bake Off's pastry week

    Richard remains the baker to beat as Chetna begins to flake
    Paris Fashion Week, spring/summer 2015: Time travel fashion at Louis Vuitton in Paris

    A look to the future

    It's time travel fashion at Louis Vuitton in Paris
    The 10 best bedspreads

    The 10 best bedspreads

    Before you up the tog count on your duvet, add an extra layer and a room-changing piece to your bed this autumn
    Arsenal vs Galatasaray: Five things we learnt from the Emirates

    Arsenal vs Galatasaray

    Five things we learnt from the Gunners' Champions League victory at the Emirates
    Stuart Lancaster’s long-term deal makes sense – a rarity for a decision taken by the RFU

    Lancaster’s long-term deal makes sense – a rarity for a decision taken by the RFU

    This deal gives England a head-start to prepare for 2019 World Cup, says Chris Hewett
    Ebola outbreak: The children orphaned by the virus – then rejected by surviving relatives over fear of infection

    The children orphaned by Ebola...

    ... then rejected by surviving relatives over fear of infection
    Pride: Are censors pandering to homophobia?

    Are censors pandering to homophobia?

    US film censors have ruled 'Pride' unfit for under-16s, though it contains no sex or violence
    The magic of roundabouts

    Lords of the rings

    Just who are the Roundabout Appreciation Society?