2013 portfolio review

With 2013 behind us it is once again time to take a look at the performance of the portfolio. As expected I wasn’t able to repeat the performance of the first six months of the year, but I came unexpected close with a 20.4% return in the second half of the year. This means that I was able to outperform the global equity markets with a wide margin in 2013:

Year Return* Benchmark** Difference
2012 18.53% 14.34% 4.19%
2013 53.04% 17.49% 35.55%
Cumulative 81.40% 34.34% 47.06%

* Return in euro’s after transaction costs, dividend withholding taxes and other expenses
** Benchmark is the MSCI ACWI (All Country World Index) net total return index in euro’s

I don’t think I achieved these returns by taking on an above average amount of risk. I’m at the moment 95% long and 10% short for a net long exposure of 85%, and the majority of the companies I own have a rock solid balance sheet. But the only good test is a real-life bear market, and while I’m curious to know how I would perform in such a scenario I’m certainly not hoping that I’m going to find that out in 2014. Ignoring the short positions and netting the pair trade in the Prisa capital structure my portfolio currently looks as follows:

Portfolio at 2013 year-end

One of the biggest contributors to the positive performance was Conduril. I made this my largest position earlier this year when it was trading at €30/share, and since then the market price has risen to €51/share making it an even bigger bet. Despite the run-up in price I think it’s still by far the cheapest company I own so I’m not yet thinking about selling. Conduril wasn’t the only company that contributed to the positive result, although there were also a handful of stocks that cost me money:

Ticker Purchase Date
Entry* Sell Date Dividend price** 2013 Return
EHL.AX Nov 19, 2013 0.245 0.225 -10.2%
FFP.PA Oct 28, 2013 42.49 42.22 -0.6%
PDRX Oct 17, 2013 3.02 3.80 25.8%
L1D.SI Sep 16, 2013 0.148 Sep 26, 2013 0.147 -0.7%
AWDR.OL May 15, 2013 90.00 3.10***
129.00 64.1%
AKPS.OL Apr 8, 2013 26.50 May 8, 2013 35.90 35.5%
BUR.PA Mar 20, 2013 346.83 4.4 566.00 64.5%
PVCS.L Mar 3, 2013 28.83
18.85 14.50 15.7%
ALJJ Feb 12, 2013 0.732 Jun 7, 2013 0.84 14.8%
UTSI Feb 11, 2013 2.90
2.77 -4.5%
TLI.L Nov 21, 2012 47.75 Nov 8, 2013 41.50 -13.1%
CDU.LS Sep 27, 2012 22.00 1.50 51.00 138.6%
AIG Sep 10, 2012 35.30 0.20 51.05 45.2%
RELLA.CO July 19, 2012 37.80 46.00 21.7%
CNRD.PK Mar 29, 2012 18.50 2.00 36.92 110.4%
SODI.OB Mar 26, 2012 3.45 4.35 26.1%
DSWL Mar 6, 2012 2.40 0.22 2.24 2.5%
SALM Feb 21, 2012 5.46 Apr 3, 2013 0.05 7.85 44.7%
IAM.TO Jan 24, 2012 0.48 Jan 11, 2013 0.52 8.3%
ARGO.L Jan 3, 2012 12.50 1.30 14.10 23.2%
0684.HK Nov 16, 2011 2.26 Jul 5, 2013 2.42 7.1%
ASFI Nov 7, 2011 9.51 8.42 -11.5%
Average 31.5%

* Entry price or closing price 2012
** Exit price or current price
*** Stock price in NOK, dividend in USD

Not a single stock performed truly terrible, although Emeco has been very volatile and was down significantly more before recovering a bit the past weeks. The other ‘big loser’ that I still own is Asta Funding. It’s the first stock I wrote-up on this blog, and the stock price is now back to the same level as two years ago. I think my original analysis wasn’t great, but since the company did create intrinsic value the past two years it’s now a substantially better deal and I’m happy to hold this. The downside is in my opinion well protected thanks to the cash rich balance sheet, and hopefully the upside will take care of itself in 2014…


Long all stocks discussed except those marked as sold

8 thoughts on “2013 portfolio review

  1. Undertherockstocks

    Congrats on the results! I’ve enjoyed following your journey.

    Several names in your portfolio overlap with mine, and like you I agree the strongest test will be a bear market which I would be happy to not see for a while!

    Re: PDRX have you any indication when the 2013 annual report may be available?

    1. Alpha Vulture Post author

      First reason is just some timing noise: I sold WSP holdings just before year-end, and another merger arb situation was also completed at the end of December. I’m now reinvesting some money again in new merger arb situations. Six months ago the situation was different and I was actually looking at selling some positions. Second reason is that I have allowed my Prisa pair trade to grow in size. A lot of the stocks I own can’t be bought on margin so I need a bit of a cash buffer to maintain a long/short position.


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