I apologise for the near month-long gap since the last “Bombed Out” virtual portfolio, which is supposed to be reviewed on a weekly basis.
Has the long gap made much difference to the performance?
When the portfolio was last updated, the FTSE 100 closed at 7,433, and it is now slightly lower at 7,414, whereas over the same period the value of the portfolio had risen (before the latest changes) to £10,124 from £9,895, so once again we see evidence of how diving in and out of stocks may not be the way to go.
This is an experimental “momentum-based” portfolio, however, so we’ll press on with the strategy, but we’ll have a quick pause to see which stocks have benefited most from a bit more of a “buy and hold” focus.
While some of us were sunning ourselves in Symi …
Directa Plus Plc (LON:DCTA) has turned a 0.8% fall into a 2.5% gain while Rosslyn Data Technologies PLC (LON:RDT) has all but wiped out its 5.1% shortfall from a month ago.
In contrast, Kefi Minerals PLC’s (LON:KEFI) losses lengthened, from 5.1% to 13.1%, while NCC Group PLC’s (LON:NCC) star has waned a bit further, as it is now down 2.6%, versus a 1.2% loss back on 15 August.
The star performer has been marketing services company St Ives PLC (LON:SIV), which was down 1.8% when last we checked but is now sitting on a paper profit of 11.4%. There has been no news flow, other than the resignation of a non-executive director, but momentum stocks seem not to depend on hard news to drive the share price.
Not surprisingly, given its decent share price performance, St Ives has retained its place in the “Bombed Out” recovery stocks portfolio, but all the others head for the exit, incurring dealing costs along the way.
The new intake sees the return of Bilby PLC (LON:BILB), which was one of the few successes of the original incarnation of the “Bombed Out” portfolio, and the inclusion of a stock that Proactive has followed practically from day one: Sound Energy PLC (LON:SOU).
Also making its debut is respiratory diseases specialist Synairgen plc (LON:SNG), but before we get to the newcomers let’s pay a quick visit to the departure lounge.
Heading for the exit
Directa Plus: Bought at a cost of £1,998; sold for £2,033. Profit of £35.
Kefi Minerals: Bought at a cost of £2,004; sold for £1,657. Loss of £347.
NCC Group: Bought at a cost of £1,997; sold for £1,928. Loss of £69.
Rosslyn Data: Bought at a cost of £1,999; sold for £1,969. Loss of £30.
Coming in through the out door
Bilby: The building services provider had a good run in the initial (disastrous) incarnation of the “Bombed Out” portfolio, generating a £390 profit on an initial £1,035 investment in just over a month, which is good going in anyone’s book.
Having been sold at 72p back in June, the stock has been bought back at the 68p level.
“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, and who are we to argue?
Bought: 3,790 @ 69p each at a total cost of £2,592
Sound Energy: The glamour stock of 2016 has lost a third of its value over the last year but it is worth noting that the stock is still trading at about five times the value it was quoted at back at the beginning of 2016.
READ Sound Energy advances as route to gas commercialisation starts opening up
Such can be the lot of explorers, but the Morocco-focused gas junior has regained its mojo of late, following a funding offer for its eastern Morocco gas project.
The indicative non-binding proposal comes from Advisory & Finance Group Investment Bank, a Moroccan financial institution that funds Oil & Gas Investment Fund, Sound’s partner, and soon-to-be major shareholder.
With a cornerstone investor on board, we might see a welcome reduction in the share price volatility of Sound.
Bought: 4,900 @ 52.5p each at a total cost of £2,588.
Synairgen: It’s been a tough 12 months shareholders in the respiratory diseases specialists, with the shares down two-thirds, but they are starting to see some light at the end of the tunnel/
Last week the shares picked up as the company said there had been significant industry interest in its new idiopathic pulmonary fibrosis treatment ahead of the start of clinical trials.
Richard Marsden, Synairgen’s chief executive, said: "Based on PXS-5382A's potential across a number of disease areas and the promising data seen to date, we have received significant interest from companies looking to license the programme for multiple indications.”
The company is to start a Phase I (safety) trial of the new treatment for sufferers of idiopathic pulmonary fibrosis in the fourth quarter of 2017 after completing pre-clinical studies.
PXS-5382A, an inhibitor that aids breathing in patients by targeting the LOXL2 enzyme, is being developed with Australian firm Pharmaxis.
Results from the Phase I trial are scheduled for the middle of 2018, after which the aim is to find a partner to license the drug due to size of the potential market and number of indications it could address.
The chances of Synairgen still being in the “Bombed Out” portfolio in the middle of 2018 are slim-to-none, but considering this company was considered dead and buried when AstraZeneca pulled the plug a year ago on its collaboration on an asthma drug called AZD9412, let’s hope the stock does not – if you’ll forgive the pun – run out of puff.
Bought: 23,390 @ 11p at a total cost of £2,588.
Here’s where we currently stand
Company
No. of shares
Total cost
Average price paid
Current bid price
Current value
Profit/ loss £
Profit/ loss %
Bilby
3,790
£2,592
68.4p
65p
£2,463
-£129
-5.0%
St Ives
2,850
£1,996
70.03p
77.25p
£2,202
£206
10%
Synairgen
23,390
£2,588
11.06p
10.5p
£2,456
-£132
-5.1%
Sound Energy
4,900
£2,588
52.81p
51.25p
£2,511
-£76
-3.0%
- Cash: £1
- Total value of original £10k portfolio: £9,633
- Profit/loss on closed trades and dividends: -£236
- Unrealised profit on current holdings: -£131
- Total profit/loss: -£367