Yesterday was quite a dramatic day for Craven House Capital ($CRV.L), the company announced it would delist from AIM and join the Specialist Fund Segment of the London Stock Exchange, along with securing funding for $150m of new capital priced at 1.25p per share. The stock exploded from around 1p to a high of 1.8p and has now stabilised at 1.4p.
I haven’t look at CRV for a while, and it was recently covered by another blogger, Expecting Value, which takes the count now to two bloggers that have been skeptical of CRV. I thought I would write a post setting out my thesis again and particularly addressing the issue raised that CRV could be inflating the valuation of its balance sheet.
My biggest portfolio holding is Craven House Capital (AIM:CRV), which today has a 30% weighting. It is a tiny nano-cap flying beneath the radar of most investors that I have held since 0.28p up to the current 0.47p. I still think this could double from here though and it’s been a while since I went over the stock so here is an up to date look.
For those that aren’t aware, Craven House Capital is far and away my largest holding, and sat at 22% of my portfolio yesterday. I have no other holdings above 10% which should give you an idea of how much I like this stock.
In my previous post I spoke of how management issuing new shares at 1.25p (a premium to today’s share price) was beneficial for existing shareholders and that I expected management to drastically increase the size of the balance sheet. Well today has confirmed that assumption was correct, as they have just announced a new deal which I calculate has increased my adjusted book value from £2.6m to £3.8m, a 45% increase.
Craven House Capital presents an almost unbelievable special situation. Selling at only 64% of its net assets, it is issuing new shares for almost 5 times the current share price, benefiting shareholders.
It’s that time of year again, doesn’t time fly. I haven’t made many trades during the second half of the year, perhaps that is why it has been a good half year for my portfolio! It returned 7.5% in H2 2015 versus -3.4% for the FTSE All share tracker and -1.0% for the S&P tracker. Performance was driven mainly by my 34% holding in Craven House Capital (LSE:CRV), which was 16% up in the half year on good news that it has signed a deal to raise £30m in equity at a price of 1.25p per share. That is significant for a £6m market cap company. Excluding CRV my portfolio was up 3.6%, so still outerperformed.
It’s that time of year again, I review my portfolio performance every 6 months as a compromise between short term volatility and waiting too long between reviews. The first half of 2014 has been a bit of a roller coaster for my portfolio, driven mainly by swings in the price of my biggest holding Craven House Capital. The rest of the portfolio has been much smoother, seeing nice steady gains.
H1 2016 has been a strong half for my portfolio, it returned +31.7% vs the FTSE All-share tracker return of…
Time sure flies, it’s time again for a half year review. I don’t put much weight on my half year results but it’s useful to keep track of what is going on. In many ways H1 2015 was a pretty dire 6 months for my portfolio, yet I managed a respectable 8.8% return compared to 4.5% for the FTSE All share tracker and 0.2% for the S&P 500 tracker.
I’m sure by now most have heard that Buffett’s latest letter to shareholders has been released. If you haven’t read it, you have probably already read articles on it. So I wanted to post here some quotes from which I drew some subtle implications that others may not have picked up on when reading.