Portfolio update

I’ve made a couple of portfolio changes in the last couple of days. My holdings in JD Sports (LSE:JD) and Kentz (LSE:KENZ) are up 11.2% and 7% respectively since the end of the year. Not bad for 10 days! I looked at the market cap of both companies and compared to what I had assessed fair value to be. Both are trading at around my estimates so I decided to significantly reduce the positions, by about 60%.

I feel that I value companies quite conservatively so don’t usually liquidate positions in good quality companies if they reach my fair value, as I like to buy and hold over the long term. JD and KENZ are definitely high quality companies with great growth prospects and sound management. But when I took a look at the portfolio I realised that these two companies where some of the largest positions (tends to happen when prices appreciate so much). I wasn’t comfortable with this given they represented what I considered the lowest margin of safety holdings.

But I was perhaps also biased by the current valuations in the market overall, and I have been quite keen to increase my cash position over the year to protect me from any decline in the overall market which may present good buying opportunities.

JD Sports returned a total of 110%, or 52% annualised since I bought it in April 2012. I still think the stock is a good long term holding which is why I have retained a position which stands at 2.3% of the portfolio.

Kentz delivered lower returns of 69% but due to the shorter holding period it is equivalent to 125% annualised which I can’t be anything but pleased with. It didn’t take long for the market to realise what a great company this is. My position size is now 2.7% of the portfolio.

Cash now stands at 16% of the portfolio due to the sales and also some gains on hedging USD and CAD.

Finally an update on my last post on Barnes & Noble, I said I may initiate a position but as of yet I still have none. I probably wont buy, but could change my mind. If I do it will be a small position, <2% of the portfolio to reflect the risks.

Disclosure: JD, KENZ – long, BKS – no position


Founder of Investing Sidekick. Works as a research analyst and is an avid value investor, always searching for undervalued shares.

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