| Asset | Bloomberg Ticker | |
| Alternative Asset Opportunities | TLI LN | 18.9% |
| Imtech NV | IM NA | 17.8% |
| Commerzbank | CBK GY | 10.3% |
| AIG | AIG US | 10.3% |
| Euromoney | ERM LN | 9.3% |
| JD Sports | JD/ LN | 8.1% |
| Cupid PLC | CUP LN | 7.1% |
| Dolphin Capital | DCI LN | 7.0% |
| B&C Speakers | BEC IM | 4.8% |
| Veripos Inc | VPOS NO | 4.3% |
| Plaza Centers | PLAZ LN | 2.1% |
| GBP Cash | 0.1% | |
| Quarterly Return | Quarterly Benchmark Return | |
| -5.80% | 2.44% |
Monday, 30 September 2013
Friday, 20 September 2013
Top Up Purchase
I used the small amount of cash I have to top up my holdings in Alternative Asset Opps today. While I have one or two companies I'm interested in, I'm in no hurry to do anything. The portfolio does need rebalancing, though. The "headline number" of my portfolio performance this year is pretty dull, despite a few of my investments shooting out the lights. B&C Speakers is up around 60% and still doesn't look expensive. JD is up more than 50%. Lesson I've learned is sometimes decent companies can be cheap for no particular reason. The other lesson I've learned is that there's not much point picking stocks that go up 60% if they're only 5% of the portfolio. I need to be more disciplined about position sizing. Right now, the portfolio is a complete mess, but I will take the opportunity to sort that out soon.
Markets generally seem toppy. Klarman's returning capital, Marks is making warnings in his letter, and Buffett is talking about being unable to find stuff to buy. Looking at my watch list, the average P/E must be about 20. Some commentators are talking about FTSE 8000. IPOs are going crazy, with Foxtons up 20% today. PE firms are doing dividend recaps. I'll stop there.
Markets generally seem toppy. Klarman's returning capital, Marks is making warnings in his letter, and Buffett is talking about being unable to find stuff to buy. Looking at my watch list, the average P/E must be about 20. Some commentators are talking about FTSE 8000. IPOs are going crazy, with Foxtons up 20% today. PE firms are doing dividend recaps. I'll stop there.
Monday, 2 September 2013
I just bought some shares in Cupid PLC, the online dating company. For those that aren't familiar with the story, it was a highly rated company until this year, on the back of a secular growth business, combined with a cash generative business. Whispers about the quality of the business model turned into allegations in newspapers and in TV documentaries this year, as some journalists claimed that the company uses dummy profiles to try and entice members to subscribe to the sites. Doubts about churn rates also came to the fore. Oh yes, and there was a related party transaction, now closed out.
To me, online dating is not a good business. There are very few barriers to entry, and it's very hard to have a good experience, for a range of reasons. Even the genuine users are dishonest, and upsell themselves - that's the nature of dating. KPMG did a company commissioned investigation and concluded that Cupid wasn't being systematically fraudulent, although there are a few practices that need to be cleaned up. Anyway, the company is now priced as a very bad business, which is probably correct, and sentiment towards it is very low.
The interesting bit is that Cupid have decided that they should get rid of their murkier operations - the "casual dating" sites, to concentrate on their more respectable ones. They accounted for just less than 50% of EBITDA, and have been sold for approx 4.5 * EBITDA, to the co founder. He will use the cash flow from the casual assets to pay much of the consideration, in 40 monthly installments.
Adding earnings, cash on balance sheet, and cash to be paid, the company will have approx £43 mln of cash in 2 years, with more to come. The market cap of the company is £45mln. So in 2 years, the business will be pretty much free. And it's a business that can possibly grow. I think that constitutes a margin of safety, although it requires the buyer of the casual assets to keep paying his installments.
What to sell? Well after much thought, IG had to go in the bin. It's had a decent run, and I worry a lot about lack of growth of subscriber numbers, and regulatory changes. Today, it re announced that it would no longer offer spread betting on Italian equities, because of their financial transactions tax. I will think more about IG and possibly rebuy at some point. It's not an awful stock to own, it's just that I think Cupid is better. Other candidates would be Euromoney, but I am aware of the behavioural mistake that people make of selling their best performers, and if the likes of Hargreaves and Rightmove can sell at 30 P/E plus, then it has room to go up, perhaps. JD Sports also was a contender, but this is still undervalued on a relative sector basis, and is geared to the current UK recovery. I'm prepared to wait a few months on this one. That said, I had a few hours free in Nottingham yesterday and took the opportunity to walk around the shopping district. I was horrified at the number of casual sports shops, and the shoddy state of the Millets I walked into.
To me, online dating is not a good business. There are very few barriers to entry, and it's very hard to have a good experience, for a range of reasons. Even the genuine users are dishonest, and upsell themselves - that's the nature of dating. KPMG did a company commissioned investigation and concluded that Cupid wasn't being systematically fraudulent, although there are a few practices that need to be cleaned up. Anyway, the company is now priced as a very bad business, which is probably correct, and sentiment towards it is very low.
The interesting bit is that Cupid have decided that they should get rid of their murkier operations - the "casual dating" sites, to concentrate on their more respectable ones. They accounted for just less than 50% of EBITDA, and have been sold for approx 4.5 * EBITDA, to the co founder. He will use the cash flow from the casual assets to pay much of the consideration, in 40 monthly installments.
Adding earnings, cash on balance sheet, and cash to be paid, the company will have approx £43 mln of cash in 2 years, with more to come. The market cap of the company is £45mln. So in 2 years, the business will be pretty much free. And it's a business that can possibly grow. I think that constitutes a margin of safety, although it requires the buyer of the casual assets to keep paying his installments.
What to sell? Well after much thought, IG had to go in the bin. It's had a decent run, and I worry a lot about lack of growth of subscriber numbers, and regulatory changes. Today, it re announced that it would no longer offer spread betting on Italian equities, because of their financial transactions tax. I will think more about IG and possibly rebuy at some point. It's not an awful stock to own, it's just that I think Cupid is better. Other candidates would be Euromoney, but I am aware of the behavioural mistake that people make of selling their best performers, and if the likes of Hargreaves and Rightmove can sell at 30 P/E plus, then it has room to go up, perhaps. JD Sports also was a contender, but this is still undervalued on a relative sector basis, and is geared to the current UK recovery. I'm prepared to wait a few months on this one. That said, I had a few hours free in Nottingham yesterday and took the opportunity to walk around the shopping district. I was horrified at the number of casual sports shops, and the shoddy state of the Millets I walked into.