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Bombed Out but Bouncing Back portfolio rises 46% in 11 days

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One heckuva jump for MySquar this month

This week’s column is dedicated to Barnes Wallis, inventor of the bouncing bomb, for reasons that will quickly become obvious.

After several weeks of disastrous performance, albeit tempered by some recent signs of recovery, the ‘Bombed Out but Bouncing Back’ (BOBBB) virtual portfolio had an absolutely stonking week.

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

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The record shows, I took the blows and did it ... MySquar!

Thanks entirely to the amazing surge by MySQUAR Ltd (LON:MYSQ), the mobile device services company focused on Myanmar, a portfolio that on 4 May had lost more than 50% of it is original £10,000 seed money had reduced that loss to about 28% on 15 May.

As it happens, I was reassigned to Proactive Investors’ North American site last week, which meant I was not able to update the BOBBB portfolio midweek as I would normally do, but that worked in our favour as MySQUAR continued to shoot out the lights, as they say in North America.

I am not sure why “shooting out the lights” is seen as a good thing, but that’s what a week working on the North American desk does to one’s vocabulary.

A further bonus for the portfolio came in the form of Bilby PLC (LON:BILB), the building services provider, which today said performance in the financial year just ended had been better than expected.

READ Bilby booms as it upgrades forecasts for year just gone

Feeling a lot better about the way the portfolio is performing (even if it is only virtual cash it has been losing), I ran the screen again on Monday morning and was somewhat surprised by the outcome.

Bon soir old thing, cheerieo, chin-chin; poo-toodle-oo, goodbyeee

Out goes Bluebird Merchant Ventures Ltd (LON:BMW), the owner of the Batangas gold project, for a £260 loss.

It was sold at 1.75p a share, generating £790 to be invested in something else that has a bit more staying power.

The investment in Oilex Ltd. (UK) (LON:OEX), the dual-listed oil explorer focused on the Cambay field project in India, did not fare well, so we say farewell.

The shares were sold at 0.3p each, raising a nice round £750, crystallising a not so nice loss of £285.

Now comes the surprise.

I am not sure how MySQUAR no longer qualifies as “bouncing back” after rising 177% last week, but that’s what the stock screen is telling me.

Either way, after such a fantastic run since we bought it, I was happy to exit with a handsome profit.

We checked out at 6.1p a share, having bought in at 1.78p. The sales proceeds were £3,584 and the profit was a record-busting £2,536.

READ the MySQUAR investment case

Thanks to the wild success of MySQUAR, the portfolio has £5,145 to invest, which means five stocks can be purchased.

Will one of them turn out to be the next MySQUAR?

Probably not, but you never know.

This week’s runners and riders

The ones that meet the investment criteria this week are:

Countrywide PLC (LON:CWD), Craven House Capital PLC (LON:CRV), Intercede Group PLC (LON:IGP), Microsaic Systems plc (LON:MSYS), Mobile Streams Plc (LON:MOS), Proteome Sciences plc (LON:PRM), Richland Resources Ltd (LON:RLD) and Tavistock Investments PLC (LON:TAVI).

Some of those have turned up on the radar before and not made the cut. Craven House I am going to bin because its shares are quoted in dollars and it is just too complicated to work out the transaction costs.

With only enough dosh to buy five stocks, we have to winnow the list down and the criterion we use is to eliminate the stocks with the widest bid/offer spreads, so out go Richland Resources (17% spread) and Mobile Streams (13%).

That leaves the following new arrivals:

Countrywide: bought 560 shares at 58.5p each, at a total cost of £1,027.

I was once at a birthday party where an estate agent was very reluctant to say what she did for a living until she found out I was a journalist.

Apparently, we hacks are even less popular than estate agents.

Be that as it may, the estate agent chain has been on a good run of late and may be straying into “overbought|” territory, if you subscribe to the “relative strength index” theory.

According to Investopedia, the index is calculated using the average gains and losses of a security over a specific time period, with the preferred period being 14 days, for no readily apparent reason.

A value of more than 70 suggests a stock has been getting too frothy, which is where Countrywide is now, with an RSI (relative strength index, not repetitive strain injury) of 72.

Perhaps I should add this criterion to the stock screen?

Non-executive director Natalie Ceeney probably disagreed that they are overbought, as she recently bought 21,316 shares in the company.

Brandes Investment Partners also recently lifted its stake above 17%, so someone clearly loves estate agents.

Intercede: bought 1,740 shares at 58.5p, at a total cost of £1,027.

Shares in the digital identity software and services group have more than halved in the last year but received a fillip last week in the form of a contract win from a US aerospace and defence contractor.

Microsaic Systems: bought 35,500 shares at 2.85p each, at a total cost of £1,027.

This is another techie stock, but this company specialises in developing chip-based mass spectrometry instruments.

No, me neither …

Last Thursday, the company announced it had developed a new technology to enable real-time analysis of proteins in bioprocessing applications, such as in the manufacture of biologic molecules (proteins, antibodies and peptides) for therapeutic and diagnostic uses.

“This new technology has the potential to significantly accelerate the industrial purification of biologics,” the company said.

Analysis times can be reduced from days or even weeks to minutes.

Mobile Streams: bought 25,000 at 40p each, at a total cost of £1,015.

Up 57% today, which probably means it would not have made the cut had I run this screen in the middle of last week when I was scheduled to, the stock is defying gravity without the backing of any hard news.

A stock exchange announcement from the mobile devices content developer might be on its way soon, perhaps after a gentle prod from the London Stock Exchange’s regulators..

Proteome: bought 20,200 shares at 5.05p, at a total cost of £1,035.

The protein biomarker specialist has lost three-quarters of its value over the last year and Vulpes Life Sciences Fund deciding last week it had got cheap enough. It splashed out, buying 97,314 shares at 5p each to take its stake to 18.48%.

Martin Diggle is a director of Proteome and of Vulpes, so draw your own conclusions from that.

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

65p

£1,300

+£265

+26%

Countrywide

560

£1,027

183.43p

178.5p

£1,000

-£28

-2.7%

Intercede

1,740

£1,033

59.36p

54p

£940

-£93

-9.0%

Mobile Streams

25,000

£1,015

4.06p

3.5p

£875

-£140

-14%

Microsaic

35,500

£1,027

2.89p

2.65p

£941

-£86

-8.4%

Proteome

20,200

£1,035

5.12p

5p

£1,010

-£25

-2.4%

Sepura

6,350

£1,031

16.24p

15.75p

£1,000

-£31

-3.0%

  • Cash: £8
  • Total value of original £10k portfolio: £7,073
  • Profit/loss on closed trades: -£2,789
  • Unrealised profit on current holdings: -£138
  • Total profit/loss: -£2,927

As per usual, we’ve lost a few hundred quid straight off the bat from dealing costs and the bid offer spread, but I am moderately optimistic that Bilby will keep its good run going.

Sepura plummeted the day we bought it but after hitting a low of 9.81p on 8 May it is now up to 15.81p so I am also hopeful it will continue to bounce back.

As for the new entrants, who can tell?

We might strike lucky with app developer Mobile Streams, which is in the same sector as BOBBB star MySquar, but the main difference is we knew the reason for MySquar’s meteoric rise whereas we do not with Mobile Streams.

John-H.jpg


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