What a turnaround. From Q2 being a write-off at the start to making it all back, and then some by the end. Those that panic sold are probably rueing it by now.
In general news, I attended a day (out of two) of the Mello Conference in London. I didn’t get to hear many speakers, but it’s always good to hear Lord Lee espousing his views. Last year, Mello shared space with the London Investor Show and I found that much better value for money as there was lots more going on. Doesn’t sound like it will be repeated in the near future, which is a shame.
As of the start of Q3 I’m a bit ambivalent about the Market. it’s had a good run, despite the TACO tariffs and the ‘Big, beautiful, budget’ which is another step change in US Borrowing. This side of the pond, we have KACO whereby Kier Starmer has had more u-turns than a game of Snakes and Ladders. Again, Balanced budgets are going out of the window and it will be interesting (as in the apocryphal Chinese Curse) to see how the Autumn pans out. I’ve been deliberately on the sidelines, banking Dividends but being quite selective with purchases.
9th July
DOM – Dominos Pizza – Buy
Dominos should do a Hokey Cokey pizza just for me. This is quite a cyclical share, going up and down with International Sports events and general sentiment. Definitely one for trading as far as I am concerned. I’ve been in and out twice, so this is the third time, each around the 250p mark. Last time I sold I netted a 50% return over 2 years when it briefly reached the giddy heights of 400p. Fingers crossed for a solid 350p this time.
Buy @ 250p with a d/y of 4.7% and PER of 11.6. Net debt is quite high, giving a negative Book value but I do like the Franchise model with each Branch a standalone profit unit with its own incentives to be profitable, leaving a light Corporate model.
Portfolio %: 2.7%
Total Portfolio Holdings: 2.7%
This does take me down to 3% cash now, so I need to build up some reserves before buying anything else. HSS has been a bit of a duffer for me, but it’s taking off like a rocket currently and I’m back in profit. Considering selling up whilst I’m in the money. Not convinced it’s a prospective takeover target, but why has it jumped the best part of 50% in 3 months? Hmmm.
KGH is another that has had a decent run. It’s been on a spending spree so I’m wondering if there will be any indigestion absorbing all the disparate businesses.
WPP issued a Profit Warning today. We all beat ourselves up metaphorically with those shares we sold that subsequently went up but also spare a thought where we did make the right call. I was nervous about WPP, so sold at 845p in November. Since then, it’s been a consistent black run, almost halving. A plunge after today’s profit warning puts them at 430p. Not in any rush to buy back. The advertising landscape is changing with AI having so much of an impact. WPP is a behemoth and in all likelihood will get left behind. Whilst the absolute amount is coming down, it is also sitting on a massive debt pile. Not for me anymore, Lucky to get out when I did.
GRG issued soft results recently. Don’t think they are there yet, but could be worth a look. They are a staple on the High Street and if they can sort out the shoplifting epidemic, they will be in a good place.
Overall though, no bargains and the Macro outlook looks a bit iffy.