BHB Portfolio – Weekly Update – 03.07.20
- Portfolio up 1% from previous week
- Top of the Class: ABF, RCH, PAF, MSFT
- Naughty Step: SMDS, AML, BT, MIRI, NCC, TSCO, TLW
- Purchases: APF, RCH, RDSB, TSCO, WBA, SMDS
- Sales: HSBA, GPP, MKS, MIRI, SWKS, CNA
- Dividends: MRW
Weekly Performance: +1%
2020 Performance: -1.3%
It has been a very busy week for the BHB Portfolio with several sales and purchases. This is probably the longest portfolio update I have had to do so yet.
I spent the previous weekend reviewing all the holdings to try and understand their current financial positions, the impact the lock down is having on them and what risk they current have. The results of this analysis result in me selling full positions in HSBC (HSBA), Marks & Spencers (MKS), Centrica (CNA) as well as taking some profits from Greatland Gold (GGP), Mirriad Advertising (MIRI) and Skyworks Solutions (SWKS).
There was also some tops made of current holdings such as Anglo Pacific Group (APF), Reach Plc (RCH), Royal Dutch Sell (RDSB), Tesco (TSCO), DS Smith (SMDS) and Walgreen Boots Alliance (WBA).
There was also a final dividend received from WM Morrisons (MRW) of 4.84p which is up from previous years. MRW have also no not withdrawn the interim payment in November and so still allows it to sit in the Income Portfolio.
Tesco plc (TSCO)
Buy Price: £2.23 & £2.22
Fair Value Calculation: £2.44
Analysts Estimates: £2.85
Dividend Yield: 4.13%
Further top ups of Tesco Plc as I have done several times this year at these prices. This a new position this year so I have been gradually building this as part of the income section of the BHB Portfolio.
Anglo Pacific Group (APF)
Buy Price: £1.34 & £1.32
Fair Value Calculation: £1.52
Analysts Estimates: £2.05
Dividend Yield: 6.76%
Another stock already held in the portfolio that I have been gradually building over the last few months. Continuing to pay a dividend and forecasted to keep increasing the dividend per share so continues to fit well with the income strategy.
Royal Dutch Shell Plc (RSDB)
Buy Price: £12.37
Fair Value Calculation: £14.53
Analysts Estimates: £16.02
Dividend Yield: 4.7% (forecasted)
Royal Dutch Shell Plc (RDSB) has been part of the BHB portfolio for a while now and so the average price is much higher than the current one. This stock has been hard to manage recently and it has been tough to keep it and tough to sell it. I’ve decided to keep it and recently bought a small amount more. I will not be adding a lot more but I believe the price will stabilise and return higher. They have trimmed the dividend and selling elements of the business but I think this is a sensible approach for the longer term.
Reach Plc (RCH)
Buy Price: £0.75
Fair Value Calculation: £2.05
Analysts Estimates: £1.28
Dividend Yield: 2.94%
Another position that I have been building as part of the income section of the portfolio. The final dividend did get cancelled, however the next interim has not yet. I will need to keep an eye on this, although there is still a lot of potential price growth in this too.
DS Smith Plc (SMDS)
Buy Price: £2.90
Fair Value Calculation: £3.61
Analysts Estimates: £3.27
Dividend Yield: 5.6% *
Interesting week for DS Smith Plc (SMDS). They announced a positive earnings and then pulled the dividend which didn’t go down well with the market. The share price drop more than 12% from the open but closed around 8% down that day. Also I’m not happy with the dividend being cancelled myself I believe this is very short term. The price drop is over done in my eyes and has allowed a good entry point to a stock that I think was already undervalues. So I’m keeping this and topping up for the income portfolio even if the dividend is cancelled in the short term.
Walgreens Boots Alliance (WBA)
Buy Price: $41 / £32.88
Fair Value Calculation: $54.16 / £43.38
Analysts Estimates: $46.68 / £37.39
Dividend Yield: 4.28%
So I finally bit the bullet this week and opened a small position in Walgreens Boots Alliance (WBA). I have been curious about this one due to the technical analysis but the fundamentals look safe, it is continuing the dividend payments and have the finances to cover it. I also think it will be one of the industries that will come out stronger. It will be survive the lock downs longer than several of it’s competitors and the fair value and analysts estimates make the current price look safe.
HSBC Holdings Plc (HSBA)
Sale Price: £3.78
HSBC has been part of the portfolio for a while and has continued to disappoint. It has not gained since the March sell off and has probably declined further due to global politics and I was stood with a 38% lose. It has also pulled it’s dividends which is not good for what is supposed to be an income stock. It has been hard to sell this stock as I believe the price will rise again over time but with there still being so much uncertainty, this can be dangerous – sometimes you just need to cut your loses.
I may buy in again at a later date if the numbers work but at the moment I’m glad to remove this risk for the time being.
Marks & Spencer Group (MKS)
Sale Price: £1.01
I originally started building a position in Marks & Spencer Group (MKS) as part of the Income strategy. However, since it has cut it’s dividends it doesn’t really fit with this strategy anymore. There is still a lot of potential growth in the price but the fundamentals are not brilliant and any further disappointments could mean trouble. I’m happy to take the 13.5% profit on this and I will review it again when things stabilise a but more. I feel better for banking some profits and reducing risk.
Centrica Plc (CNA)
Sale Price: £0.41
Similar to HSBC this stock has continued to disappoint and has gained very little since the march sell off. There are also some elements of the fundamentals that are boarder line and it wouldn’t take too much to make this drop further. There is enough risk around at the moment, so I will cut my loses and reallocate the capital to something with less risk and more promise.
Greatland Gold Plc (GGP)
Sale Price: 11.685p
Profit/Loss: +608.2% (Yes that is correct!)
Greatland Gold has been one of the my best ever buys in respect to % return. After reviewing my portfolio over the weekend and trying to manage risk I decided I would sell around a 3rd of my Greatland Gold shares. It has risen significantly and at the time of selling I collected 608% return. The current price will probably rise a lot more over the medium term especially with the gold prices still rising which is why I only took profit on a 3rd of my position.
Mirriad Advertising Plc (MIRI)
Sale Price: 20.8p
Mirriad Advertising Plc (MIRI) is in the speculative section of the BHB Portfolio and so far has been doing very well. I still believe there is more to come from this stock however, I sold just over a 3rd of the shares to bank some profit and remove some risk. This stock is also quite volatile as these speculative stocks are and so I will probably get the opportunity to top up again at a lower price. The price I sold at was also close to analysts expectations for the short term so it is probably ready for a pull back anyway.
Skyworks Solutions Inc (SWKS)
Sale Price: $126 / £102.50
This sale was tough as I really like Skyworks Solutions (Inc) for the long term and waited a long time to reopen a position with them. I do like the fundamentals of the company and the lack of debt is really good however, the price is starting to look over priced from a fair value point of view and it is now above the analysts consensus. They are part of the growth portfolio due to the dividends still being low so it feels like a good time to bank some profits. I only sold half of my position and would really like to get the shares back again at a lower price. I couldn’t sell the full position as the tech sector does seem to be bullet proof at the moment and I think them for the long term.
BHB Radar & Wish-list
There are a lot of stocks either in my price target range or almost there at the moment. A lot of stock already in the portfolio such as Anglo Pacific Group Plc (APF), DS Smith Plc (SMDS), Tesco Plc (TSCO), Royal Dutch Shell Plc (RDSB), GlaxoSmithKline Plc (GSK) as well as recently opened position Walgreens Boots Alliance (WBA. So I will be keeping an eye on these to see if it is worth adding to the positions.
There are also a few stocks I am semi interested in that are moving towards my buy price such as Cisco Systems Inc (CSCO), Molson Coors Beverage Co (TAP) and Coca-Cola Co (KO) are dropping to a more valuable price. All of these I still need to do more research on before buying to ensure the fundamentals are OK.
I will be taking a much more cautious approach to buying in the short term as I feel we there could be a pull back across the market at any moment, especially in the American markets.