Way back on 23rd March this year we were being hit massively in a Covid-19 impacted market disaster. Prices had been slashed left right and centre and pessimism was the order of the day.
The bears, those who had iron constitutions, were playing the market hard, with stocks falling sharply across the board.
It was on that day that I wrote the following article for the masterinvestor.co.uk website.
I constructed an investment portfolio aimed at taking advantage of decimated prices, assuming that we would recover. Little did I know, or guess, just how long it would take for our UK equity markets to recover.
All I did was assess the investment merits of companies that I had been following for some time and make a call upon their recovery potential.
On that day I wrote the following -
"Anyone who tells you that he or she has seen all this market melee before is a liar.
I am very old and have endured many a market rout over the years, but I have to say that this recent crash is probably the worst.
So, what do you do with a fully invested portfolio bearing recent buy prices? Do you just sell out the lot and prepare to escape to your selected bolt hole when you are given permission to travel?
Or are you lucky enough to have supplies of fresh cash just burning a hole in your bank accounts?
To sell and get out?
First of all, I would not recommend dumping your stocks – you chose them for your holdings because you liked the story and the investment criteria to back up your selections, so hold tight.
Obviously the Covid-19 pandemic has thrown practically everything off kilter, hopes and prospects have been changed significantly and there is nothing you can do to repair them, other than hope that times get better and soon.
Is any recovery due?
With such improvements it will be inevitable that recently obliterated share prices will see some smart recoveries, with the indices responding similarly.
Various of my previous company profiles now look totally out of line, while some are still showing strength, but all have been impacted by the virus in some way or another.
So, what would I do?
Several people have asked me which companies I would select for fresh investment, seeking a good recovery bounce before the year end.
Accordingly, I have compiled a quick hit list of ten stocks – my CV19 Market Recovery Portfolio."
The CV19 Market Recovery
Portfolio Suggestions – 24 March 2020
1
Billington (LON:BILN) – 242p
High 450p Low 242p
Mkt Cap £35.37m
pe 7x
yield 4.73%
www.billington-holdings.plc.uk – designer, manufacturer and installer of structural steelwork
My new Target Price: 320p.
2
Capital Drilling (LON:CAPD) – 34.5p
High 75p Low 29p
Mkt Cap £48.39m
pe 6x
yield 3.36%
www.capdrill.com - drilling and mining services contractor mainly into Africa
My new Target Price: 80p.
3
TClarke (LON:CTO) – 76p
High 142p Low 71p
Mkt Cap £35.52m
pe 5x
yield 5.33%
www.tclarke.co.uk – electrical, mechanical and ICT services provider
My new Target Price: 120p.
4
Finsbury Food (LON:FIF) – 55p
High 105p Low 51p
Mkt Cap £74.32m
pe 7x
yield 6.26%
www.finsburyfoods.co.uk – cakes, bread, bakery snacks manufacturer for multiples
My new Target Price: 100p.
5
Inland Homes (LON:INL) – 41p
High 94p Low 32p
Mkt Cap £90.54m
pe 4x
yield 7.05%
www.inlandhomes.co.uk – residential and mixed developer of brownfield and strategic land
My new Target Price: 80p.
6
MPAC Group (LON:MPAC) – 185p
High 377p Low 128p
Mkt Cap £43.37m
pe 7x
yield 0.7%
www.mpac-group.com – packaging machines for FMCG, healthcare and pharmaceutical sectors
My new Target Price: 250p.
7
Ramsdens (LON:RFX) – 85p
High 260p Low 68p
Mkt Cap £31.92m
pe 5x
yield 7.24%
www.ramsdensplc.com – foreign currency, pawnbroking, precious metals and retail jeweller Liberum Capital has a buy rating with a price target of 180p
My new Target Price: 120p.
8
Rank Group (LON:RNK) – 97p
High 329p Low 78p
Mkt Cap £437m
pe 9x
yield 7.42%
www.rank.com – operates gaming services, Grosvenor Casinos, Mecca and Enracha
Peel Hunt has a buy rating with a price target of 240p
My new Target Price: 150p.
9
Strix (LON:KETL) – 125p
High 200p Low 111p
Mkt Cap £256m
pe 12x
yield 5.71%
www.strixplc.com – market leader in kettle safety controls and hot water on demand products
Peel Hunt has a buy rating with a price target of 170p
My new Target Price: 160p.
10
Sureserve (LON:SUR) – 33p
High 51.5p Low 26p
Mkt Cap £50m
pe 11.8
yield 1.59%
www.sureservegroup.co.uk – compliance, energy services, property services and construction
My new Target Price: 50p.
Later this week I will publish an update on the above portfolio's performance.
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