Portfolio Review
Instead of showing the ducks feet of the portfolio I thought I might try a few more words this time.
So I owe the bank $27,570.57 the weekly 'investment plan' now adds up to $5825.00, the current market value is $44,596.42. If you want to flip that around $5825.00 invested has yielded equity of $17025.85 in a bit over two years.
Sort of makes me smile when I think of comments earlier in this thread like "if what you are doing isn't working, why keep doing it?" and "you have lost all your money". I couldn't argue with the latter comment, there was a lot of red ink there for a while and there could be again.
The interest paid to the bank in the past final year was a few hundred dollars more than the dividends received. This current year should see that number finally become positive. When more profits were taken on M2 Telecommunications the capital gains number finally turned green . Maybe profits have been taken a little early on a few businesses but not a bad comeback from being about $6000.00 in the red at one stage. With a capital gain of only $280.17 and equity of $17025.85 there must be a fair bit still at risk in the market so we had better review the holdings.
COH - Cochlear, current market value of $5365.44 up 18.22% on purchase price and 12.03% of the portfolio.
This is the business that is causing the most consternation at the moment. The initial entry point was lucky, almost at the low point after Cochlear's recall and even then for a normal security too much was paid. Later more were picked up for a bit over $56.00 after the price had fallen from $80.00 plus.
Cochlear is in the portfolio because of their sustainable competitive advantage, recent results are starting to show that moat may be slowly starting to erode. It is difficult to ascertain if this is short term or more lasting in nature. The trouble with this type of 'slow trading' is by the time I come up with my decision the answer will probably be clear to the rest of the market. COH has been a core holding for a couple of years, there could be a lesson to be learnt here on paying for growth.
DTL - Data#3, current market value of $4601.15, up $16.2% on purchase price and 10.32% of the portfolio.
Not much to think about the business, the dividends and cash flow both cover my cost of capital. Things have been tough in this sector but Data#3 has a rock solid balance sheet, nice reoccurring revenue and the hope of some growth in the future.
EZL - Euroz Securities, current market value of $1666.16, up 10.37 on purchase price and 3.74% of portfolio.
It is difficult to see a catalyst for these shares to shoot the lights out, but I like the way management handle capital and this gives confidence of a positive return in the long run.
HHL - Hunter Hall Limited, current market value of $5327.70 down 23.42% on purchase price and 11.95% of the portfolio.
Hunter Hall's flagship fund is the top performer since inception in 1994, the recent performance however has been poor, this sort of period is not unusual for value investors. The thesis is when investment performance improves the funds under management will increase with some nice leverage on earnings. While waiting the dividend yield more than covers the interest payments.
IMF- IMF Australia, current market value of $1466.01 down 3.47% and 3.74% of the portfolio.
The most recent addition, I look forward to some nice cash flows.
IPP- Iproperty, current market value of $7140.00 up 133.47% on purchase price and 16.01% of the portfolio.
This is the only holding that does not make money, they are however trying to build the same sort of network as realestate.com (REA) but in SE Asia. There does seem to be a lot of blue sky priced into these shares. IPP seems to have a competitive advantage in Malaysia and Indonesia. They are showing good results on Hong Kong and Singapore as well, things should be interesting in the future.
MTU- M2 Telecommunications, current market value of $3950.10 up 137.94% on purchase price and 8.86% of the portfolio.
MTU seems to me to be priced to perfection, profits have been taken twice on this position. To those that look at things that way this holding is free carry. Having said that the dividend yield is fantastic and just because it is priced to perfection who am I to say that perfection will not be achieved in the future? The income is nice and there may be more upside to come.
NVT- Navitas, current market value of $6301.68 up 108.85 on purchase price and 14.13% of the portfolio.
NVT looks like it may be a keeper, fantastic cash flow, nice dividend yield, sustainable competitive advantage and maybe growth.
SRX- Sirtex Medical, current market value of $1903.50 up 28.53 on purchase price and 4.27% of the portfolio.
There I go again looking for growth and overseas earnings. The worry with this business is the growth is somewhat tied to the clinical results to be released late next year. This risk has kept the position size small.
TGA- Thorn Group, current market value $6874.68 up 51.63% on purchase price and 15.42% of the portfolio.
Another keeper, it is very rare to find a solid business like this at a reasonable price. I can see no reason not to hold, collect the steadily increasing dividends and wait.
There really is nothing I can see worth buying at the moment, as the market rises the bias is more towards taking risk of the table. While I think about it the dividends will continue to be paid and I will keep on throwing $75.00 a week at the loan and the share prices will fluctuate.