We return to “The Bombed Out but Bouncing Back" (BOBBB) portfolio to see whether our tweaks to the filter have made any difference to performance.
The column is a couple of days late because of disruption caused by the Easter break, a period that since pagan times has been synonymous with rebirth (the name Easter being derived from Oestre, the Germanic goddess of dawn, from which the word oestrogen is derived).
Has the break brought about a rebirth of the BOBBB?
Well, it's a case of little acorns.
BOS Global and Proxama head for the exit
BOS GLOBAL HOLDINGS exited the portfolio with a £30 loss, all of which is down to the assumed £15 dealing costs (£15 to buy; £15 to sell).
Proxama, which hung in there for a while, bowed out with a humungous loss.
We bought at 0.45p and sold at 0.3p, and once dealing costs had been factored in we took a bath to the tune of £360.
Ouch.
On the plus side, one of the remnants of the portfolio, Corero Network, is actually in profit and showing signs of being a decent investment; this might really be a company that is “bouncing back”.
READ Software firm Corero bags multi-year contract with big-name internet service provider
Meanwhile, Fitbug is losing the BOBBB money but the share price remains above the 50-day moving average so it stays in for another week.
Graphene Nanochem is also losing money, but it also stayed in for another week.
The sales of BOS and Proxama took our cash stash up to £1,810, and under our new rules no purchase may be less than £1,000 so this week we blow the whole lot on one stock.
Which one?
There are quite a lot to choose from this week: Ambrian, Arian Silver, Braemar Shipping, City of London Group, CloudBuy, former BOBBB constituent Hayward Tyler, Inspirit Energy, Intercede Group, Keras, Mirada, Oilex, Papua Mining and SpaceandPeople.
All of the above have seen their price rise over the last five day, 10 day and one month periods, and all have a share price that is above the 50-day moving average.
Ship it in
With only enough money to buy one stock, the deciding factor is the narrowness of the bid-offer spread and on this count Braemar Shipping Services PLC (LON:BMS) gets the nod.
The international provider of shipping services is a decent sized company, valued at £87mln, and that generally means there is a liquid market in the shares, which is conducive to market makers offering a narrow spread.
In Braemar’s case it is quoted at 288p (bid) and 290p (ask, or offer), so we’ll buy at 290p.
There does not seem to be any company-specific reason for Braemar’s recent revival, but on a macro level investors may be buying into the stock in the hopes of a pick-up in world trade.
The three brokers that follow the stock all rate it a “strong buy”, with a median price target of 330p, which offers the potential of a 17% gain.
Based on earnings per share estimates for the financial year just ended, the price/earnings ratio is an eye-watering 34.4, but the projected dividend yield of 5.0% is comforting, even if it looks like earnings per share this time round will not fully over the dividend.
But enough of the fundamental analysis … this is meant to be a voodoo momentum portfolio, so let’s see how it is doing.
Scores on the doors
Company
No. of shares
Total cost
Average price paid
Current bid price
Current value
Profit/ loss £
Profit/ loss %
618
£1,807
292.43p
288p
£1,780
-£27
-1.5%
Corero Network
16,200
£1,190
7.34p
7.34p
£1,256
£66
5.6%
Fitbug
692,000
£1,191
0.17p
0.15p
£1,038
-£153
-13%
Graphene Nanochem
16,100
£1,190
7.39p
6.5p
£1,046
-£144
-12%
- Cash: £2.54
- Total value of original £10k portfolio: £5,122
- Profit/loss on closed trades: -£4,619
- Unrealised profit on current holdings: -£259
- Total profit/loss: -£4,619
Unless my eyes deceive me, our total loss last week was £4,766, so on paper the portfolio actually increased in value by £147.
It’s not much, but it’s a start, and maybe just enough to consider rebooting the portfolio using a few of the cash conserving tweaks we have introduced since we started the experiment on 7 March.