See you in the queue...
While there’s no shame in going with the tried and trusted, I’ve secretly harboured a desire to make it on to the front cover of a magazine and I guess this is my one chance in life. I’m proud to say I’ve come up with a portfolio that would make even Marc Hasenfuss blush. (Freudian slip. I assume you meant “flush”? – Editor.)
However, to my credit I’ve put my money where my mouth is and bought each of the following stocks for my personal portfolio. If you go belly-up backing me at least you’ll know I’m feeling your pain and know I’ll be standing in the soup line next to you.
Small cap shares have been out of favour with institutional investors and there are plenty trading beneath their net asset values. While NAV isn’t the be-all and end-all of investing, it stands to reason shares will ultimately correct that situation as confidence returns.
You’ll remember that both Beige and Buildmax (my second pick, below) scored very highly in a recent cover story we did collecting data from McGregor BFA on various fundamental factors. With some aborted and less than successful transactions over the past few years, Beige hasn’t covered itself in glory and every time it seems to be coming right it lurches into another negative story. However, it’s a case of two steps forward, one step back.
It’s trading below its NAV, improving cash generation, and while there’s perhaps too much paper in issue, it’s a growing business.
This is a stock that hurt me in 2010 but I stuck with it all the way down below 20c and its rights issue. I have to bow to the superior knowledge of the guys at Brait and Coronation who have put a lot of their own money into recapitalising this business and assume they aren’t in the stock to make chump change, so why should I miss out?
Even with more shares in issue, the stock trades below its NAV and you have to go with the smart money in this case.
I can’t lie. Every time I walk into Global Trader in Melrose Arch I get a little jealous that they all make those pin-stripe suits look so good. Maybe if I win the trading challenge I’ll invest in a few of those and cultivate the swagger.
Jokes aside, I like the team at Purple Capital. I think they’re entrepreneurial and I think they like the idea of being the men who rock the boat – and those are the kind of people who are fun to back.
Global Trader as a business is reaping some good revenues and the transaction with sports betting business Voltbet is another that could add some serious volume to their retail base. It also trades beneath its NAV. In short, I haven’t got a cooking clue about commodity stocks. But my theory is simple: if the share trades beneath its NAV and Brian Gilbertson can give the hint he’s about to hit even one home run then Pallinghurst will fly.
Piet Viljoen said not to expect fireworks from his listed investment vehicle, but even the best will feel some pressure to do something this year. At the time of writing the stock was trading below its NAV – which is primarily made up of cash – so it can be the defensive corner of my portfolio, with Viljoen picking up the pieces from any fallout from my riskier stocks.