Too late…

Armour post-mortem

I don’t enjoy picking over the bones of a failed trade, but it’s important to learn lessons. A 70% loss on consumer electronics company Armour goes back to a rush of blood to the head in February 2010.

Continue reading »

Too little…

Armour exits the Thrifty 30

Armour was a company I should never have added to the Thrifty 30 but before the recriminations start, I need to do the deed: Eject it.

Continue reading »

Confessing to the original sin

Maybe simple statistics do trump judgement

Every time I read a review of ‘Thinking Fast and Slow’ by Daniel Kahnemann, a psychologist who won the Nobel prize for economics, I think I should read it. Especially in the light of a decision that is weighing heavily on me.

Continue reading »

Where are all the bargains?

Screening for ultimate bargains, is like catching Angel Fish in the River Thames

There are only three candidates in my ultimate bargain screen this month, none of which look particularly enticing:

NB: Here’s the spreadsheet, you can find a short description of the screen on the shortlists page, and here are descriptions of the two variables: Price to net working capital, and Piotroski’s F_Score.

Perennial bargain, Leeds Group is an investment company currently focused on textiles. I’ve profiled it in the past but not been tempted because of the poor investments it made in trying, and failing, to diversify from the undervalued business at its core.

Harvard International distributes consumer electronics, which as I’m finding with Armour, is a very tough market. That could spell opportunity, because expectations, and therefore prices, are very low. But Harvard’s F_Score of three out of nine suggests it’s getting into trouble, rather than getting out of it.

If Harvard’s three spells trouble, then Northamber’s F_Score of just two is doubly troubling as Northamber is already a member of the Thrifty 30 and although Sharelockholmes uses slightly different metrics to calculate the F_Score than the original paper published by Piotroski and, therefore me, we usually arrive at a similar figure.

Holding a company with an F_Score of two would difficult to justify unless most of the failures in the scoring system were marginal, but Northamber is an odd company. It appears to be slowly liquidating itself by continuing to pay a dividend. With its market price so low, its assets are worth more in our hands than in the company’s, so it might actually be one of those businesses Ben Graham cherished. Worth more dead than alive.

Despite August’s rout, this is a disappointing haul. That’s partly because I restrict my search to companies reporting in the last four months so I can base my analysis on a recent annual report. But it means in the second half of the year, when fewer companies report, there are fewer fish in the river.

News in brief: Recovery on track for T30 members

Prices don’t encapsulate all knowledge

Judging by the price charts of some Thrifty 30 members it looks like my next review of the portfolio is going to be an uncomfortable experience. But prices don’t tell the full story.

Sometimes they don’t tell any of it.

The panic in August walloped screw manufacturer Trifast’s share price, but news from the company indicates the recovery is still underway. Trifast joined the Thrifty 30 last October.

Despite a scary delay publishing its results, I don’t think there are any bogeys in International Greetings’ preliminary statement. Thankfully the gift-wrap, card and cracker company added to the Thrifty 30 a year ago has been quicker about getting its annual report out.

If this is becoming a little repetitive I’m sorry, I’m just reporting news. Recovery appears to be on track at French Connection, the floppy-eared fashion retailer I added in April 2010, and at Castings, which makes castings, added in October 2009, and reviewed in July 2010.

Meanwhile at embattled consumer electronics outfit Armour, where the shares only cost 2p now, a shareholder shows signs of confidence. Mind you, the 500,000 shares chief executive George Dexter bought will only have cost him £10,000.

Another investor would like to forget he added Armour in February 2010, added more in January 2011, and then regretted it, but unfortunately he runs his portfolio in public.