Time to take a good look
STOCK market investors have witnessed huge swings in the value of their shares during the past couple of weeks. Market volatility has been extreme.
The recent turbulence provides a good excuse to re-appraise holdings. Look at each of your shares and ask a single question: would I buy this share today at this price? If so, hold on. If not, sell.
And that brings us to the nitty-gritty of what to do with the individual shares that Midas has bought since last summer.
For the time being, we will leave untouched all the shares tipped here since the beginning of April. It is too soon to assess their prospects.
But what of our earlier selections? First, a look at those bought since the end of last July and subsequently sold. We have shown profits on eight.
Our star performer was British Energy, headed by chief executive Bill Coley, with a gain of 50%. Xstrata came close (up 48%). The others where we sold at a profit were McBride (16%); Jessops (34%); Bellway (27%); Enterprise Inns (11%); Go-Ahead (10%); and Management Consulting Group (18%).
We sold one share at a loss, St Ives, down nearly 15%.
So we did extremely well on the shares we bought and sold. Our experience with those we still hold has been far more mixed. Now we need to decide what to do with them.
We have little hesitation about keeping most of the shares in our portfolio. Bespak, best known for making asthma inhalers, (up about 12%) shows promise and is undervalued. Food manufacturer RHM (down 13%) looks cheap, even if earnings stagnate.
Taylor Woodrow (up 8%) remains a solid investment. Scottish & Southern (up 10%) is defensive with a reassuring yield. Specialist public relations group Next Fifteen (down 11%) should rebound if the company manages to devise a way of cutting its tax bill. Shares in newspaper and magazine distributor Dawson Holdings (down 24%) are propped up by their high yield. Forth Ports (up about 6%) remains a favourite for the long term as we believe the firm will unlock the value of its property or will be taken over.
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We are confident that Star Energy (down 9%) will come good particularly once the market begins to appreciate the long-term value of the company's gas storage projects.
Retail Decisions (down 4%) is now the subject of a possible bid. If that comes off, we could see a big gain. Titanium Resources (up one%) is a low-risk play in the high-risk mining and minerals sector.
Devro, the company that makes sausage skins the world over, (down almost 2%) looks cheap. And Wagon and XP Power (down a nasty 10 and 15% respectively) represent solid value.
The two that are troubling us are packaging group RPC and software company Adamind. RPC sees profits squeezed when energy costs rise: our fear is that this will be reflected when the company reports full-year figures next week .
Adamind - which gets the wooden spoon as the worst-performing share in our portfolio - has yet to prove itself. Adamind should show profits this year, and it has won some useful contracts, but at the moment the market is out of love with small, high-tech companies such as this. Despite reservations, we will hold both - for now. Next week, we will try to identify one or two bargains to emerge from the recent market turmoil.
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