Higher One Holdings ($ONE)

June 16, 2014 3 Comments

One of Warren Buffett’s most successful investments was in American Express, just after the ‘Salad oil scandal’ hit. A company had been faking inventory to receive loans secured against it, and American Express was one of the casualties when the scam was uncovered. The stock plunged 50% and allowed Buffett to secure a strong growing business at a cheap price. Higher One (NASDAQ:ONE) is a financial services company offering debit card accounts and electronic payment facilities targeted at HE institutions and students. It is being hit with its own set of scandals which leaves the stock trading at a forward P/E ratio of just 7 despite returns on equity of 15% (which have historically been much higher at ~30%).

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The dangers of retail

June 9, 2014 1 Comment

Asset prices throughout the western world, from property to shares, are at all time highs and show no signs of slowing. Quantitative easing and low interest rates, rather than encouraging new investment and entrepreneurship are simply fuelling price increases in existing assets. Now is the time to be fearful in my opinion, however that doesn’t stop me trying to find great investments even if it is that much harder at the moment.

I recently ran a stock screen of US companies to try and find some interesting prospects. The results were very interesting so I wanted to share them with you, and highlight some possible value traps I noticed going through the list, particularly retailers, along with some stories of my experiences investing in them.

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Does Zamano scam people?

June 3, 2014 6 Comments

Zamano (ZMNO:ID) is an Irish company trading at just 2.4x free cash flow excluding net cash. It is profitable yet has a chequered history with regulators, being fined multiple times in the past, and regulated out of existence in some countries. Critics say it scams consumers, yet the company has battled through and now has a viable business to business segment as well. The market is clearly very negative about the company, are they right or is this a bargain purchase?

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Craven House Catalyst

May 28, 2014

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.

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Pental Limited (ASX:PTL)

May 19, 2014 3 Comments

Pental is an Australian consumer goods company that has grown revenues by 16% per annum since 2006 yet is trading at a TTM P/E ratio of just 8. It previously had a large speciality chemicals business which was disposed of in 2013, which means its financial history isn’t what it first seems by looking at the company statements alone. My interest was widened when I noted that a member of the board personally holds almost 20% of the company.

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Ridley & how not to hedge

May 9, 2014 6 Comments

Ridley has been a star performer in my portfolio this year. Only 7 months after I purchased it for $12.45 I have sold it for $24.32. So that’s almost a 100% return right? Well not quite, the currency moved against me by 13% which knocks that 100 down to more like 70%. Ah but that’s where my hedge comes in, it should make up the shortfall – that’s what I thought. Well imagine my surprise when it contributed just 5% to my return. I made an error which has cost me dearly – don’t make the same mistake.

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Free markets vs government

May 6, 2014 Leave a comment

The recent news of Pfizer’s (NYSE:PFE) prospective takeover of AstraZeneca (LSE:AZN) has had me contemplating what governments should do (if anything) about this. There have been wide calls in the media and by the public in the UK for the government to block any takeover as it would put British jobs at risk and it’s not in our national interest to sell our best assets to foreigners.

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Goldplat selloff

May 2, 2014 2 Comments

I wrote up Goldplat (AIM:GDP) only a few weeks ago just after I had purchased shares. The position is down almost 30% – hitting all time lows, and now represents an even better buying opportunity in my opinion. Here’s my take on why the share price has fallen so much and if the market knows something we don’t.

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