Portfolio review 1H2012

With the first half of 2012 behind us it seemed a good idea to me to quickly review my portfolio. Not because a time frame this short is really useful in evaluating how good or bad certain picks have been, but a portfolio is not a static entity. Some positions could become more attractive over time because of new developments, insights or changes in price, while other positions become less attractive.

The performance of the various positions is summarized in the table below. As is visible I have a few positions with a small loss and some positions with a pretty good return with SALM being the icing on the cake. I wish I could attribute this to buying undervalued companies with good downside protection, but this is not yet even getting close to getting a sufficient sample size. Besides: the company with the highest return was (and still is) also the riskiest company based on the amount of leverage.

TickerPurchase DateAVG PriceRatingDividendpriceReturn
ORGN.PKMay 10, 20121.458.5->7.50.381.4526.2%
CNRD.PKMar 29, 201216.509.0->8.514.92-9.6%
SODI.OBMar 26, 20123.098.02.96-4.2%
DSWLMar 6, 20122.118.5->8.00.022.8435.6%
SALMFeb 21, 20122.658.0->8.50.075.64115.5%
IAM.TOJan 24, 20120.598.50.590.0%
ARGO.LJan 3, 201214.698.51.312.84-3.7%
URB-A.TONov 28, 20110.998.0->7.51.023.0%
0684.HKNov 16, 20112.218.50.0252.09-4.3%
ASFINov 7, 20118.339.00.069.5114.9%

I have also included how I would change the rating of the attractiveness of the various positions based on today’s stock price and information. I have summarized my reasons for the changes below. In most cases more details can be found in the comments on the original write-up or in a followup posting.

  • ORGN.PK: Have to say that this stock really showed the value of this blog for me. Got great feedback from multiple readers and realized that it’s currently trading closer to fair value than I initially thought. The positive return thanks to the fat dividend is purely luck and only showed I didn’t fully understand the risks (and luckily in this case the rewards!) of the interest rate swaps (now terminated).
  • CNRD.PK: Small re-rating based on some errors in my original write-up, mainly because there was less excess cash on the balance sheet than I thought.
  • DSWL: I’m more convinced than ever than I’m right that it isn’t a fraud thanks to the increase in regular dividend plus a special dividend this month. But since the stock price is also up a decent amount I think it’s less attractive today.
  • SALM: It’s up a lot, but still trading at a near 20% FCF yield. The refinancing possibility next year (missed this in my first write-up) and massive insider buying after I bought it are the reasons to upgrade my rating. But it was a close call: the increase in share price is obviously not positive for the risk/reward ratio.
  • URB-A.TO: The discount has been getting smaller since I initiated my position, and the recent transaction was also a small negative development.

So far there isn’t anything in my portfolio that I think I should sell right now. Cash is in my opinion one of the least attractive assets with an almost guaranteed negative real yield. But if a better opportunity comes along I do have two positions on the hot seat.

Disclosure

Long everything mentioned in this post.

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