Portfolio performance

Following a strict caution-first value investing approach I sold a lot of shares before and during the first Covid wave.  The pile of cash was very useful later in 2020 and 2021.  The shares bought in those years have generally risen nicely – see first table.
Since the start of 2022 I’ve sold out of a number of companies so as to have about one-third of the portfolio in cash – a comfort in these troubled times with potential for inflation-induced or war-induced recessions (see newsletters written 3rd – 16th February).
The majority of the cash is expected to be invested in property abroad to give our family more options in a Putin-crazed world, but a goodly proportion will be looking for a home in deep value shares in a period of extreme flux. 
A list of all the shares I bought in the crisis
(Newsletters published at the time of each purchase set out my rationale for buying)

​
​Company Purchase date   Purchase price    Divs to 31.3.22   Price 31 .3.22        Return to 31.3.22

Smiths News 18.3.20               £0.151                  1.15p                   £0.338                       131%
Character        5.6.20                 £2.52                      20p                    £5.70                         134%
McCarthy & S 1.10.20              £0.718                       0             Sold 7 Dec 2020 £1.185    65%
Cap&Counties 6.11.20             £1.032                       0          Sold 19 Aug 2021 £1.743     69%
Dewhurst “A”11.11.20             £5.94                     23.25p                 £7.00                            22%
MS Inter       16.12.20               £1.292                   10p                     £2.60                           109%
Wynnstay   29.12.20                £3.405                   15p    Sold 24.3.21 – 3.2.22 £5.58        68%
Lloyds Bank12.3.21                 £0.4169                   1.24p                 £0.4708                       16%
J Smart18.3.21 & 24.3.21        £1.253                    3.22p      Sold 7 Feb 2022 £1.575         28%
Fletcher KingFeb20–May21   £0.3265                   0.5p Sold Sept 2021 – Feb 2022 £0.40 24%
Orchard Funding 7.6.21          £0.568                       3p                        £0.52                           -3%
Caffyns 22.6.21                         £4.65                         7.5p                   £5.00                             9%
Highcroft   22.7.21                   £8.75                         22p                      £9.50                           11%
Town Centre Sec 10.8.21        £1.426                         1.75p     Sold 2 Feb 2022 £1.581      12%
bp     26.1.22                             £4.006                      4.1595p              £3.78                            -5%
AVERAGE                                                                                                                                       46%

Longer run performance
Nine years ago that I left a tenured professorship to concentrate on investment.  Back then the FTSE 100 was around 6,600. It is now 7,550 – a slow rise. In addition, there  have been dividends of around 3% per year.
I believe the numbers in the tables below show that I have outperformed, which is quite a relief given the salary and security sacrifice I made nine years ago.
The tables display the results (so far) of all the shares bought for the portfolios I’ve been writing about in my newsletters. The comments I made at the time explaining the rationale for each investment are available for you to read in older newsletters - there is nowhere for me to hide from my appraisals I made three, four or seven years ago – all the errors of omission and commission are there in broad daylight.
I present the returns after taking the hit on broker costs, stamp duty and bid/offer spread.
(Some of you have joined us recently so, in case you are not familiar with them, I briefly describe the criteria for my portfolios following the portfolio performance tables.)
The 2013 Net Current Asset Value, NCAV, portfolio
 Company
Purchase date
 
Purchase price
 
Divs to 31 Mar 2022
 
Price 31 Mar 2022
 
Return to 31 Mar 2022

French Con.
25.7.13
 
£0.3047
 
zero
 
Sold July 2015 £0.4378
 
44%

Caledonian T
25.7.13
 
£0.70
 
zero
 
Sold April 2020 for £1.391
 
99%

Fletcher King
6.8.13
 
£0.30
 
14.25p
 
Sold June 2016 for 46p
 
101%

Northamber
22.8.13
 
£0.287
 
1.6p
 
Sold Oct 2016 £0.303
 
11%

Titon
5.9.13
 
£0.379
 
6.5p
 
Sold May 2016 £1.06
 
197%

Mallett
12.11.13
 
£0.7682
 
12.7p
 
Sold Nov 2014 £0.60
 
-5%

AVERAGE
 
 
 
 
 
 
 
 
     75%

The 2014 NCAV portfolio
Company
Purchase date
 
Purchase price
 
Divs to 31 Mar 2022
 
Price 31 Mar 2022
 
Return to 31 Mar 2022

Holders Tech
10.10.14 & 3.11.14
 
£0.47
 
1p
 
Sold March 2017 £0.33
 
-28%

Airea
4.11.14
 
£0.1195
 
0.9p
 
Sold Sept 2016 £0.309
 
166%

Northamber
17.11.14
 
£0.4265
 
0.7p
 
Sold Oct 2016 £0.303
 
-27%

Caledonian T
30.12.14
 
£1.39
 
zero
 
Sold April 2020 £1.391
 
0

AVERAGE
 
 
 
 
 
 
 
 
28%

The 2015 NCAV portfolio
 Company
Purchase date
 
Purchase price
 
Divs to 31 Mar 2022
 
Price 31 Mar 2022
 
Return to 31 Mar 2022

PV Crystalox
15.1.15
 
£0.122
 
zero
 
Sold Dec 2016 £0.237
 
94%

Arden Partners
1.9.15
 
£0.422
 
1p
 
Sold May 2018 £0.364
 
-11%

Northamber
4.9.15
 
£0.443
 
0.4p
 
Sold Dec 2016 £0.303
 
-31%

AVERAGE
 
 
 
 
 
 
 
 
17%

The Buffett-style portfolio
This type of share is rarer than the others, and so I combine all years.
Company
Purchase date
 
Purchase price
 
 
Divs to 31 Mar 2022
 
Price 31 Mar 2022
 
Return to 31 Mar 2022

 Dewhurst
9.4.14
 
£3.18
 
70.5p
 
Sold February 2020 £7.217
 
149%

MS International
9.10.19
 
£1.723
 
13.50p
 
£2.60
 
59%

Character
20.1.20 & 5.6.20
 
£2.811
 
28p
 
£5.70
 
113%

Dewhurst
11.11.20
 
£5.94
 
23.25p
 
£7.00
 
22%

MS International
16.12.20
 
£1.292
 
10p
 
£2.60
 
109%

AVERAGE
 
 
 
 
 
 
 
 
90%

(I bought some more of Dewhurst in June 2014 at £3.11, December 2014 at £3.75, November 2017 at £5.46, February 2019 at £5.54 and April 2019 at £5.64. These were sold Feb 2020).
Modified price earnings ratio portfolio 2015/16
Company
Purchase date
 
Purchase price
 
Divs to 31 Mar 2022
 
Price 31 Mar 2022
 
Return to 31 Mar 2022

Haynes
11.2.15
 
£1.159
 
33.5p
 
Sold 2.10.19 £2.9175
 
181%

AGA
11.3.15
 
£1.002
 
zero
 
Taken over June 2015 £1.456
 
45%

Hogg Robinson
10.4.15
 
£0.4709
 
2.37p
 
Sold June 2016 £0.656
 
44%

MS International
3.7.15
 
£1.86
 
46p
 
£2.60
 
65%

BHP Billiton
24.9.15
 
£10.43
 
127p
 
Sold May 2018 £16.90
 
74%

TClarke
5.11.15
 
£0.7916
 
13.61p
 
Sold Feb 2020 £1.1215
 
59%

Premier Farnell
8.4.16
 
£1.222
 
3.6p
 
Taken over 20.6.16  £1.632
 
36%

AVERAGE
 
 
 
 
 
 
 
 
72%

The AGA holding was doubled 30 April 2015 at a price of £0.9466.
Modified price earnings ratio portfolio 2017
Company
Purchase date
 
Purchase price
 
Divs to 31 Mar 2022
 
Price 31 Mar 2022
 
Return to 31 Mar 2022

Braemar
28.6.17
 
£2.848
 
20p
 
Sold June 2018
£2.639
 
0%

Caffyns
10.8.17
 
£5.012
 
52.5p
 
Sold July 2020 £2.389
 
-42%

Connect/Smiths News
27.9.17
 
£1.046
 
11.95p
 
£0.338
 
-56%

MS International
14.11.17
 
£1.84
 
30p
 
£2.60
 
58%

AVERAGE
 
 
 
 
 
 
 
 
-10%

The 2017/18/19 NCAV portfolio
 
Purchase date
 
Purchase price
 
Divs to 31 Mar 2022
 
Price 31 Mar 2022
 
Return to 31 Mar 2022

Caledonian Trust
7.11.17
 
£1.23
 
zero
 
Sold April 2020  £1.391
 
13%

J Smart
30.1.19
 
£1.13
 
4.14p
 
Sold Mar/Apr 2020 £1.101
 
1%

Northamber
6.12.19
 
£0.504
 
0.3p
 
Sold Mar 2020 £0.5717
 
14%

AVERAGE
 
 
 
 
 
 
 
 
9%

More Caledonian Trust shares bought in February 2019 at £2.29.
More J Smart bought 30.4.19 at £1.16
The 2018/2019 modified price-earnings ratio portfolio
 
Purchase date
 
Purchase price
 
Divs to 31 Mar 2022
 
Price 31 Mar 2022
 
Return to 31 Mar 2022

Connect/Smiths News
14.6.18
 
£0.285
 
5.25p
 
£0.338
 
37%

N Brown
17.8.18
 
£1.42
 
9.93p
 
Sold Sept 2021 £0.557
 
-54%

Spaceandpeople
31.10.18
 
£0.224
 
0.5p
 
Sold Dec 2020 £0.128
 
-43%

Tandem
2.4.19
 
£1.59
 
9.49p
 
Sold Aug 2020 £3.707
 
139%

MS International
6.6.19
 
£2.22
 
20p
 
£2.60
 
26%

Character
25.10.19
 
£3.506
 
33p
 
£5.70
 
72%

AVERAGE
 
 
 
 
 
 
 
 
30%

More Connect Group shares bought in February 2019 at 40.86p, March 2019 at 38.29p and May 2019 at 39p.
More N Brown bought May 2019 at £1.30.
The 2020/21/22 modified price-earnings ratio portfolio
 
Purchase date
 
Purchase price
 
Divs to 31 Mar 2022
 
Price 31 Mar 2022
 
Return to 31 Mar 2022

Wynnstay
7.1.20  & 29.12.20
 
£3.33
 
29p
 
Sold 24Mar 2021 – 3 Feb 2022 £5.58
 
76%

Daejan
5.2.20
 
£52.90
 
zero
 
Sold 21 Feb 2020 £79.41
 
50%

Connect/Smiths News
18.3.20
 
£0.151
 
1.15p
 
£0.338
 
131%

Lloyds Bank
12.3.21
 
£0.4169
 
1.24p
 
£0.4708
 
16%

bp
26.1.22
 
£4.006
 
4.1595p
 
£3.78
 
-5%

AVERAGE
 
 
 
 
 
 
 
 
54%

The 2020/21 NCAV portfolio
 
Purchase date
 
Purchase price
 
Divs to 31 Mar 2022
 
Price 31 Mar 2022
 
Return to 31 Mar 2022

McCarthy & Stone
1.10.20
 
£0.718
 
0
 
Sold Dec 2020 118.5p
 
65%

Capital & Counties Properties
6.11.20
 
£1.032
 
0
 
Sold 19 Aug 2021 £1.743
 
69%

J Smart
18.3.21 & 24.3.21
 
£1.253
 
3.22p
 
Sold 7 Feb 2022 £1.575
 
28%

Fletcher King
Feb 20 – May 2021
 
£0.3265
 
0.5p
 
Sold Sept 2021 – Feb 2022 £0.40
 
24%

Orchard Funding
7.6.21
 
£0.568
 
3p
 
£0.52
 
-3%

Caffyns
22.6.21
 
£4.65
 
7.5p
 
£5.00
 
9%

Highcroft
22.7.21
 
£8.75
 
22p
 
£9.50
 
11%

Town Centre Securities
10.8.21
 
£1.426
 
1.75p
 
Sold 2 Feb 2022 £1.581
 
12%

AVERAGE
 
 
 
 
 
 
 
 
27%

The return reversal portfolio
 
Purchase date
 
Purchase price
 
Divs to 31 Mar 2022
 
Price 31 Mar 2022
 
Return to 31 Mar 2022

Havelock Europa
20.5.15
 
£0.14609
 
zero
 
Sold Dec 2016 £0.0915
 
-37%

AVERAGE
 
 
 
 
 
 
 
 
-37%

Brief description of criteria for the portfolios
Shares are allocated to portfolios designed around ideas flowing from research conducted when my PhD students and I asked the question “what works in investment?”
These investigations were often inspired by the ideas of great investors such as Benjamin Graham.
More detail on these ideas is presented in earlier posts (if you put key words into the search box those Newsletters will appear).
Net current asset value, NCAV, criteria

1. Current asset values are taken from the balance sheet (e.g. inventory, receivables and cash).  From this total are deducted all the liabilities. Long term asset values are usually ignored (counted as zero).  Usually, further deductions are made to reduce inventory and receivable values to give a conservative bias.
2. Companies passing the quantitative test are also assessed qualitatively for business prospects, managerial ability/integrity and business stability.

Modified price earnings ratio criteria

1. A cyclically-adjusted price to earnings ratio (CAPE) significantly below average.  That is, a current share price divided by the earnings per share calculated as an average of eps over the last seven to ten years.
2. A high Piotroski score.  These nine factors indicate whether a company is strengthening its financial position and income flow.
3. Finally, and crucially, the same qualitative criteria as for NCAV investing.

Buffett-style criteria

1. A strong economic franchise,
2. Managers of integrity and talent,
3. Excellent accounting numbers, and
4. A reasonable price.

(There is much more on this in my books The Financial Times Guide to Value Investing, The Great Investors, The Deals of Warren Buffett or Warren Buffett's letters)
Return reversal

1. Rank all shares based on their returns over the past five years. Select only the worst 20% of performers – “the losers”.
2. Examine each loser share using Piotroski criteria. Select only those with a high score.
3. Ensure that the company has a market capitalisation below its net tangible asset value
4. Use the same qualitative screening criteria as for NCAV investing.

 
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