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Bombed Out portfolio has second good week in a row

Bluebird
There'll be bluebirds over the BOBBB portfolio ...

I have some good news for those of you tiring of my gallows humour over the performance of the “Bombed Out but Bouncing Back” virtual portfolio.

This week we sold all three remaining stocks in the portfolio, at a profit.

Braemar Shipping, which was bought at 290p a share was lobbed out at 317p, bringing in £1,944 and a profit of £137.

Bonmarche, bought at 98p and sold at 103p, netted a profit of £69 and added £2,035 to the coffers.

Lastly, Corero, which was bought at 7.25p a pop, was sold for 7.75p, bringing in £1,240 and crystallising a small profit of £52.

The fact all three were sold at a profit justifies the decision to limit purchases to stocks with low bid/offer spreads, and even opens up the possibility that the stock screen might actually have a future as a generator of share ideas, rather than a generator of reasons to be snotty about day trading.

If you need a reminder of exactly what the criteria are for the stock screen, all is explained on the link below.

READ Bombed out but bouncing back - a virtual portfolio of recovery stocks

Liquidating the entire portfolio gives £5,219 to reinvest.

One of the other tweaks to the original stock screen was to insist that all share purchases must be of at least £1,000, so that gives us the firepower to buy five shares.

New candidates for the virtual portfolio

The ones that meet the investment criteria this week are:

Bilby PLC (LON:BILB), the building services company

Bluebird Merchant Ventures Ltd (LON:BMW), the owner of the Batangas gold project

Boxhill Technologies PLC (LON:VOX), the weather lottery outfit

Brave Bison Group PLC (LON:BBSN), the company once known as Rightster and which specialises in digital media and social video distribution

READ the Brave Bison investment case

Inspirit Energy Holdings PLC (LON:INSP), a developer of combined heat and power boiler technology

MediaZest PLC (LON:MDZ), the provider of marketing solutions to retailers

MySQUAR Ltd (LON:MYSQ), the mobile device services company focused on Myanmar

READ the MySQUAR investment case

Newmark Security PLC (LON:NWT), the security systems specialist

READ the Newmark investment case

Oilex Ltd. (UK) (LON:OEX), the dual-listed oil explorer focused on the Cambay field project in India

Sepura PLC (LON:SEPU), a provider of communications solutions

South African Property Opportunities PLC (LON:SAPO), a closed-end fund that owns a number of properties in South Africa

As you can see from the links to what we call our “big picture” articles, three of the 11 candidates thrown up by the screen are companies that are well known to Proactive Investors.

We have no favourites here on the ‘Bombed Out but Bouncing Back” (BOBBB) portfolio, however, and the deciding factor on which companies to add to the portfolio will be determined by the bid offer spreads.

So, although we know from following the companies closely that Brave Bison and Newmark are bouncing back, the bid/offer spreads – at around 18% - are just too large to justify purchasing them.

The five stocks that make the cut this week

This week’s purchases, therefore, are: MySQUAR, Sepura, Oilex, Bilby and Bluebird.

MySQUAR: bought 59,000 shares at 1.75p, at a total cost of £1,047.

The share price has been held back by concerns that a fund-raising is inevitable, but since its £2mln share placing, those fears have dissipated.

The shares were placed at 0.85p, but as the shares have almost doubled in the last month, we have to pay more than twice that.

The shares are still down 59% over the last six months and down 76% over the last year, so there is still plenty of ground for the shares to make up.

Sepura: bought 6,350 shares at 16p, at a total cost of £1,031.

I am not sure what is going on here, as the walkie-talkie maker has already accepted a takeover bid from China’s Hytera Communications.

That was in February; in April the UK authorities kicked off a review of the proposed takeover.

Hytera’s offer is worth 20p a share so the market must be expecting the authorities to give the green light to the deal.

Oilex: bought 255,000 shares at 0.4p, at a total cost of £1,035.

It’s probably not a stock you’d buy on fundamental grounds, as it is loss-making. On the other hand, according to our stock screen, its market capitalisation is less than its net asset value.

Bilby: bought 2,000 at 51p each, at a total cost of £1,035.

“Bilby provides gas heating installation and maintenance of plumbing and electrical systems, building repair and upkeep. Demand for social housing backed by legislation creates a positive environment for Bilby’s services resulting in a strong, transparent recurring revenue stream,” according to Northland Capital Partners, which recently became Bilby’s house broker.

It has a target price of 75p, so here’s hoping …

The shares have lost almost two-thirds of their value over the last year but are up 30% over the last month, with a solid trading update last month luring the buyers in.

Bluebird Merchant Ventures: bought 4,600 shares at 2.25p, at a total cost of £1,050.

It’s a pre-revenue company that signed an agreement back in March to form a joint venture to reopen two high-grade gold mines in South Korea.

Its flagship interest in the Batangas gold project in the Philippines but given the political situation there, which has clouded the mining sector, it has no plans to spend much money on Batangas, so the South Korean assets will give the new management team something to get their teeth into.

Scores on the doors

Company

No. of shares

Total cost

Average price paid

Current bid price

Current value

Profit/ loss £

Profit/ loss %

Bilby

2,000

£1,035

51.75p

48p

£960

-£75

-7.2%

Bluebird Merchant

46,000

£1,050

2.28p

2p

£920

-£130

-12%

MySQUAR

59,000

£1,048

1.78p

1.7p

£1,003

-£45

-4.3%

Oilex

255,000

£1,035

0.41p

0.37p

£944

-£92

-8.8%

Sepura

6,350

£1,031

16.24p

15.75p

£1,000

-£31

-3.0%

 

  • Cash: £21
  • Total value of original £10k portfolio: £4,847
  • Profit/loss on closed trades: -£4,781
  • Unrealised profit on current holdings: -£372
  • Total profit/loss: -£5,153

So, thanks to dealing costs and bid/offer spreads, on paper the portfolio has now lost more than half of its value, but the fact that all three stocks we held last week were exited at a profit gives a small amount of hope that the BOBBB is “BBing” itself.

John-H.jpg


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