BHB Portfolio – Weekly Update – 29.05.20

  • Portfolio up +0.7% from previous week
  • Top of the Class: GGP, AML, RCH
  • Naughty Step: CEY, PAF, TLW
  • Purchases: TSCO, GSK, SPCE, BABA
  • Sales: None
  • Dividends: None

Weekly Summary

Weekly performance: +0.7%
2020 Performance: – 3.8%

Overall a good week for the B-H-B portfolio up 0.7% from the previous week and some potentially strong stock purchases made. The portfolio is still -11.7% for the year but steadily recovering from the -27.8% at the end of March. I am still pleased I held my nerve and did not sell any stocks in the big sell off.

The financial services sector had a decent week with the B-H-B stocks in this sector up around 2.7% in total (still got a way to go!). Basic Materials was good up 2% overall. My worst performing sector was the Communication Services Sector down -2.7% for the week mainly dragged down by Walt Disney & Take-Two Interactive.

The speculative section of the B-H-B portfolio was up 7.4% with MIRI (+4.8%), SPCE (+6.2%), GPP (+11.5%) and AML (+35.7%) all having a positive week.

Some cash was added to the broker account and I have made some small additions to the portfolio. All purchases are stocks that are already owned in the portfolio.

Purchases

Tesco plc (TSCO) @ £2.24

This is the same purchase as last week and in at the same price. As it seems to be finding support here, I thought I would add more to the position. I do have capacity to add to this stock and sector without it becoming over-weighted. It is on my watch list at under £2.24 which I believe is around 12% below fair value. It is also around 23% below the average analysts estimates with a safe 4% dividend yield and fairly “Covid-19” safe.

GlaxoSmithKline plc (GSK) @ £16.30

This was on the watch list with a price target of below £16.00 which puts this at around 28% below fair value and 10% below the average analysts estimates. It is also paying a 4.7% dividend yield so fits nicely with the overall plan.
However, even though I have a price target of £16.00, I did pull the trigger at £16.30. This was due to the technical analysis showing support at around the £16.40 range which it has respected several times over the last year with the exception of the March sell off. It could drop lower and if it does, I will add to the position.

Virgin Galactic Holdings inc (SPCE) @ £13.62 / $16.80

I purchased some shares of Virgin only last week but have bought more this week. Last week I was buying at $15.00 and $14.80, but this week I purchased at $16.80. As mentioned previously, my preferred purchase price for SPCE is $15.00 or less. However, I do believe that anything under $17.00 is still acceptable for the long term investment.
The reason I have pulled the trigger this week at the higher price is due to the SPACEX Launch which could potentially initiate a short term price hype. A little bit of good news can sometimes send these sort of stocks rocketing for a few days before coming back down to reality. If the price does shoot up I will take profit on this particular purchase. If it doesn’t rally I am still more than happy to sit on these for the long term.
This is not something I would do regular as this is really trading news rather than investing. However, I have the comfort of knowing I’m happy to keep these for the long term if the short term trade doesn’t materialise.

Alibaba Group Holdings Limited (BABA) @ £159.26 / $197

Alibaba (BABA) @ 159.26 ($197)
Alibaba is another stock that I also purchased last week. This week the stock was still hovering around the $200 mark so I put in an order at $197. The price dropped and triggered my order. Later that day, the stock went on a little rally and closed the day at $207. Obviously, a 1 day movement doesn’t matter when you are investing for the long term. However, it’s nice to catch a price at the low of the day and for it to finish 5% up that same day.
As mentioned last week I believe $200 is around 20% under fair value. Analysts currently have an average price target of $252. As long as Trump and China do not do anything too drastic, this should be a nice price to top up.

B-H-B Radar & Wish-list

Walgreens Boots Alliance inc. (WBA)

I do not hold Walgreens Boot Alliance Inc. (WBA) at the moment but the price might pull back into my target range of $42. Although the price is a good 20% below fair value and the dividend looks like a safe 4.2%+ yield, I am dubious of the downward trend over the last few years. I need to do further reading and investigation into the business to understand why the price has been declining over the last few years before I make any decisions to purchase.

Microsoft Corp. (MSFT)

Microsoft Corp. (MSFT) is a stock I bought for the first time in early March at $162 and I now massively regret not buying more at that price. I should have bought at the $140 mark but hindsight is a wonderful thing and it’s very very rare to catch a bottom.
Microsoft is one of the stocks at the top of my wish-list but it is part of the Tech group that never seems to decline and is always over valued if using the traditional valuation methods.
I prefer to buy stocks when they are roughly 20% under fair value but I have a potential target for MSFT at $175 which is only around 5% below fair value. I think Microsoft are going to do very very well and I think the current Covid-19 crisis is actually going to propel them more than previous projections. This is causing me to battle with myself and challenge my rules and disciplines. I’ll keep an eye out next week and see what happens….

Thanks for reading, see you next week!

Good Luck and Happy Investing.

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