Final Post
A Goodbye and Portfolio Update
Looking back, I initially started this blog for 3 reasons:
I had just finished my CFA Level III exam and wanted to put the theories and thoughts from my studies and from Fund Managers into practice
I wanted to show potential employers that, while I had no professional experience, I did have an understanding of how equity analysis works.
And, most importantly, I genuinely enjoy looking at businesses
This will be my last post for the foreseeable future. I have recently accepted a role to work at a boutique UK Global Equity Fund. The fund has a contrarian value theme and looks to buy stocks that are below their intrinsic value without falling into the traps of low P/E multiples and cyclical highs. I feel incredibly lucky that I am able to do the thing that I love full time and am very excited for this new chapter.
Unfortunately, one of the stipulations is that I need to stop this blog. The investment industry has a large number of rules and regulations for a reason, and the reputation of my new firm is paramount. I have also had more than enough ethics drummed into me through CFA to know that investors into the fund come first, the fund (my employer) comes second, and I come third.
For anyone looking to break into the industry, I couldn’t recommend anything more than starting your own blog. Writing my ideas down and sharing them with the world (or at least my 5 subscribers) helped make sure that I kept ideas true, well thought out, and concise. This blog came up during my interviews and I am sure that it played as strong a role as my CV.
While I didn’t get the time to write up reports on many companies (only 4 on here) I looked through hundred of companies and the experience was invaluable. A final look at my holdings:
Colefax
When I bought Colefax the business was trading at £7.80, generating strong cashflows, and buying back shares at a fast pace - all despite a slowdown in the luxury market.
Since then the business has published flat H1FY25 accounts - this seems bad but given the market and how competitors have fared it is a great show of how well positioned the business is in its market. For reference, Sanderson Design published their accounts in Oct-24 and revenue dipped 11%, PBT dipped 76% - mainly driven by increased SG&A.
Some highlights: H1FY25 eps up to 53.2p (H1FY24 - 47.3p) mainly led by share buybacks, cash balance of £18.6m, and £7.3m CFO.
Sales were mainly led by a strong increase of 7% in the US (exactly where I believe they should be targeting), while sales in other regions struggled (bar Continental Europe).
Not really much else to say here for Colefax, it will continue to be the most boring stock in your portfolio. It generates cash, and gives the cash back to shareholders. Currently shares are selling for £8.20, a 5.1% increase from when I purchased them.
De La Rue
Since I highlighted De La Rue, a lot has happened. I purchased shares at £1.04.
The offer for 40% from Disruptive Capital and Pension SuperFund Capital was changed to an offer for 100% of the Currency division, at £1.25 a share (Jan-25). The deal would value the Currency division at £245m and is conditional on the £300m sale of the Authentication division going through - something I am sure (as sure as one can be) will go through given its strong performance.
De La Rue management followed this offer up with an announcement that a formal sale process had begun (Feb-25). This was done after 'receiving approaches from separate third parties'. De La Rue expects interested parties to submit expressions of interest by the end of March.
I was somewhat upset at this, as I believe that if the Currency division wasn't sold it would be worth considerably more over the next 3+ years. But, given I am having to exit my position, it is nice to see some short term appreciation in value. Current share price is £1.18, an increase of 13.5%. Should the sale go through at £1.25, there would've been a total increase of 20.2%.
AssetCo
Similarly to De La Rue, AssetCo has had big external changes. AssetCo PLC announced that it is planning to split its share capital into two groups, A Shares and B Shares, and change its name to River Global. The plan is intended to reflect the value of the company's two main businesses, River Global and Parmenion.
This split, with in being voted on now and expected to be offically announced at the AGM in March, will give a share in Parmenion and a share in River Global (and the cash) for each share in AssetCo. The difference between what I had suggested in the previous note on AssetCo and now, is that the split out stake in Parmenion will be listed and trading on AIM. This is a big win as it provides much greater liquidity for value realisation.
I'm genuinely surprised at how muted the reaction to this news is. From my rough estimates the River Global shares should be worth a conservative 16p per share and the Parmenion shares should be worth a conservative 49p per share. AssetCo shares are currently at 34p, significantly below the c65p valuation.
I bought AssetCo shares at 30.4p, so a current 11.8% increase. I would be surprised if this didn't rise significantly higher after the split in March.
Disclosure
I have sold all my positions, as required by my new role