2nd Jan '23 by Bluesky Ventura

37 comments 5641 reads

Review of 2022 Performance

Well, a disappointing 2nd half-performance (-3.8%) also led to a yearly negative performance of -21.10%. My selection process hasn't spared me this year's carnage many stock pickers have suffered, and I can safely put to bed any thoughts of having mastered the stock market or investment process superiority as suggested previously based on 2020/21 performance, see link for previous article https://www.stockopedia.com/co..... The FSTE All share, faired much better (-4.6%) and probably beat some stockpickers. The specific selections and their performances for the year can be found in the below table. Red indicated positions exited and green indicates a new position for my portfolio.

Although disappointed by the share price performance, I have actually been more satisfied with the business performance of the companies, and overall my valuation estimates remained stable over the year, suggesting no real deterioration of the fundamental business. Most companies have been able to pass on price increases, or resize the business to prevailing market conditions. So personally I am optimistic for 2023 with my valuations looking as attractive as Q1-2020 in the middle of the covid -19 pandemic. I decided to put more money to work as the difference between the share price and my valuation estimates have diverged.

Selections for 2023

The Top 10 list for the 2023 first half is provided below.

This is for me personally to publish a list and compare performance which I can't manipulate post the event.

Red indicates the position is completely closed

Green indicates a new position is being built

IG group (LON:IGG)

IG Group Holdings plc is a United Kingdom-based global financial technology company. The Company develops technology, platforms, products, and exchanges for a range of trading and investment opportunities around the world

This has been the number 1 stock pick for me since 2022 and remains so in 2023. I first bought the IG group (LON:IGG) in Nov 2016 when the stock price collapsed due to pending European regulation to clean up the industry which was eventually introduced in 2018. The rationale for investing remains unchanged since then.

Expectations and a strong track record of revenue and profit growth…

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Bluesky Ventura

15th Mar '23

IG group (LON:IGG), released Q3 results today. https://www.stockopedia.com/sh...

I mixed bag of results, with revenues from customer trading down in a quieter period, and interest income from customer deposits offset the gap, IGG has benefited from increasing interest rates.

Overall happy with IG group (LON:IGG) hanging on to most of its customers and profitability from the COVID period.

My 2023 end valuation is 1932p assuming all the additional interest income. ( A pleasant hedge I was not expecting.) Disappointed to see a sell-off, but happy to hold for the long term.

AS always DYOR,

BSV

24th Mar '23

Warpaint London (LON:W7L) beat expectations, which was not too surprising considering the low level of expectations. Still very happy with the continued growth £16M (2023) v £13.2M (2022) with 7 days of the first quarter to go, which represents 21% growth, at robust margins.

Expectations are still being sandbagged and I've penciled in 18% growth for the year-end and EPS of 12.8p, which to me looks more realistic.

My 2023 year-end valuation is unchanged at 329p.

As always DYOR

28th Mar '23

CMC Markets (LON:CMCX), A late profit warning trading update yesterday, revenues expectation decreased from £300M to £280-290M, due to quieter trading conditions. Company to still expects 30% of growth by 2025 with the increasing operation cost and investment over the past year.

https://www.stockopedia.com/sh...

It is not overly surprising as IG group (LON:IGG) reported quieter markets also, but were able to offset results with interest income.

My year-end 2023 valuation has reduced from 412p to 330p with reduced revenues and profits.

As always DYOR.

2nd Apr '23

Quarto (LON:QRT) released results late on Friday, and with the rise in the share price, it was well received by some investors.

A fall in -7% decline in sales was a surprise but compensated with the growth in profits and reduction in net debt. The company is on a much better footing with a stronger balance sheet and a more efficient operating model.

Although Quarto (LON:QRT) still appears to offer good value, I fear 2022 could represent a high point and the company no longer offers a return to growth. I expect sales and margins to fall in 2023 with more difficult market conditions.

I don't think Quarto (LON:QRT) is overvalued but believe there are better opportunities in the market. and have been exiting all my positions during the first quarter. I no longer hold any stock.

Good luck to all holders.

6th Apr '23

£g4m, see the deterioration of trading in the 4th quarter, and full-year results are below expectations. Sales came it at £152M(expectation of £155M), and more worryingly gross margins decreased to 25.7%, which looks a little like a fire sale to reduce debt at the company.

Still, the company was able able to grow the top line, and growth drivers of, consumer transition to online, European expansion, the secondhand trade-in market, and AV.com, I would expect the top line to continue to grow. A focus on cost efficiency measures hopefully with see the margin recover margins.

My 2023 year-end valuation estimate is 248p (previously 356p).

As always DYOR

BSV

Xpediator (LON:XPD), report a new offer an additional 2p (44p with an additional 2p special dividend). This continues to undervalue the company and management's recommendation of the offer of sound disingenuous.

A quick reading of the update and between the lines, the transaction is timetabled for the 3Q of 2023, and the recommended valuation is justified by the company losing key markets and geographies if the transaction does not go through. It seems the transaction has more the 50% of shareholders voting in favour of it.

It seems the owner/occupiers of the business value the business higher and would like to own all of it. They seem to have guns to the head of other shareholders. If other shareholders don't vote yes they can destroy the business.

I won't be voting in favour for this terrible offer and would encourage management to develop a backbone.

14th Apr '23

Carclo (LON:CAR) provides a trading update with a few numbers. the headline being a reduction in 2023 profits in comparison to 2022. Still, a change in focus from capital intense growth to cash and profit generation has to be welcome and is already demonstrating improved performance. It would be nice to have seen some actual numbers. I'm not sure if this is 2023 profit warning or a 2024 upgrade.

For now, I did not change my forecast as no actual numbers are provided.

If there is a sell-off I will be adding substantially.

As Alway DYOR.

Paul Scott

16th Apr '23

Hi BV,

Just seen this thread, and I have to say, kudos to you for putting your ideas out there, and submitting it to scrutiny & comments, I know what that feels like, and how difficult it can sometimes be when people take swipes at you, especially when things are not going well!

Your article is really well put together I think, and I very much like the graphs you've created too.

Well done, great work!

Best wishes, Paul.

26th Apr '23

£WL7 reported full-year results today. In summary excellent progress being made, but cost looked higher then expected.

2022 Highlights included European sales increased by 56% to GBP28.1 million (2021:
GBP18.0 million), USA sales, in sterling terms, increased by 79% in 2022 to
GBP5.3 million (2021: GBP3.0 million), Direct online sales continue to accelerate, with an increase of 106%

Growth in 2023 is likely to accelerate further;

40% growth in Q1 with margins improving
Continuing brand sales momentum being seen in 2023: Technic products will be launched
in an initial four Asda superstores on a trial basis, New Look stores
in the UK, the Group is now rolling out W7 product to a further
200 New Look stores, and significant further expansion in the US with H-E-B stores,
CVS BIRL stores, where initial sales have been ahead of expectations,
as well as launching in Sallys and Nordstrom Rack.

For now, I leave my fair value share price at 329p.

10th May '23

A $POLY trading update today shows continued strong trading at the company. https://www.stockopedia.com/sh...

The share price is being driven by the potential listing on the re-domiciliation to the AIFC (Кazakhstan) and delisting from the LSE. UK government regulation allows the holding of AIFC-listed stocks, although not all investment platforms will allow this.

I am surprised at the sell-off this morning as all the delisting information has been well-known for some time. The share price dropped this morning, going all the way down to 125p, providing an opportunist to buy more stock.

Alphaflight

Do any UK broker platforms allow for AIFC stocks? Even IBKR doesn't allow for AIFC listed equities....

I'm not surprised with the sell off. Basically UK retail investors will struggle to own this share once it moves to AIFC by the looks of things.

It is a shame that UK government foreign policies are forcing the world's best precious metals miner (Polymetal) to delist from LSE I have to say. With gold hitting its all time high last week in USDs, this mining company has to be the cheapest valued company on the LSE right now.

I'm not sure. I deal in the stock via Halifax and Tradefair which still allow you to trade the stock. worst case they will have to send me the share certificate.

16th May '23

I've attached a nice article from seeking Alpha.

https://seekingalpha.com/artic...

It mentioned a number of brokers that can hold the AIFC listing (such as Halyk Finance, Freedom Finance, or Wood&Co;

Bluesky Ventura: Thanks this was an interesting article, much appreciated!

The Phoenix

Well timed on Polymetal International (LON:POLY) Blue Sky , it's been a very tough 18 months plus for most of us and unfortunately can't see much of a turn around until interest rates start coming down at the end of this year. (Hopefully)

6th Jun '23

N Brown (LON:BWNG) reported final

The result looks as bad as expected, with the full and final settlement with Allianze. (Loss of -£51M)

Things don't seem to be getting better in FY2024, challenges of a high inflationary environment and low consumer confidence are expected to remain throughout FY24, with full-year product revenue expected to decline at a slightly improved rate to that seen in FY23.

As a result my Fair value price has decreased to 71p (from 105p).

I continue to hold my position.

13th Jun '23

For the year ended 31 March 2023, CMC Markets reported a net operating income of GBP 288 million, up 2% YoY, with trading net revenue up 1%. Interest income increased significantly, but investing net revenue was weaker due to subdued market conditions. The company achieved significant milestones, including regulatory approval for the imminent launch of CMC Invest Singapore and the successful transfer of over 600,000 ANZ Share Investing clients. Operating expenses increased by 26% to GBP 217 million, reflecting the investment in people and technology. The company's outlook remains positive, with expectations of 30% net operating income growth from 2022 to 2025 and expansion into new markets via its investing and institutional businesses. The company will focus on delivering ongoing product diversification and development of a multi-asset interface across its core trading business. The Board recommends a final dividend of 3.90 pence per share, resulting in a total dividend payment for the year of 7.40 pence per share.

The future valuation is very much dependent on achieving growth from the investments the company is making over 2023 and 2024.

my valuation remains at 330p.

15th Jun '23

$W7L trading up-date significantly ahead of expectations.

Warpaint London, a supplier of cosmetics and owner of W7 and Technic brands, has reported that its strong trading has continued into Q2 2023. Sales for the five months to 31 May 2023 were £29.7m, a 45% YoY increase, and the Board now expects that the Group's full year 2023 performance will be significantly ahead of its prior expectations. The company maintains a strong balance sheet with cash balances of £7.5m as at 31 May 2023 and no debt.

It seems the growth is set to continue for some time.

I upgraded my fair value share price to 385p.

20th Jun '23

$G4M report results inline with revised expectations.

Gear4music (Holdings) plc, the UK's largest online retailer of musical instruments and equipment, has announced its financial results for the year ending 31 March 2023. Despite challenging market conditions, the company reported revenues of £152m, 3% higher than the previous year and 26% higher than FY20. The gross margin fell to 25.7% due to a reduction in inventory, and EBITDA was £7.4m, 34% lower than FY22. Net debt at year-end was £14.5m, down from £24.2m in 2022. The company is committed to reducing overhead costs and increasing product margins to return to profitability in H2 of FY24.

$G4M continues to be uncertain about the future but is still expected to grow with improving product margins.

My 2023 year-end valuation estimate is 224p (previously, 248p, 356p).

As always DYOR

BSV

3rd Jul '23

At the end of the first half, it was nice to return to growth with the process I use. The yellow results show the actual results with the actual s selling price when positions were totally sold. The FY returns column shows what the results would have been if I had held all positions for a full six months.

Positions marketed in red have been totally sold out.

Actual returns were 8.2 % plus dividends, even if I held all positions for six months the returns would have been 4.2%.

I will be posting my top 10 positions based on my ranking process for the next six months later today in a new post.

wish every good luck

2022 is not the year for stock-pickers, New List for 1st Jan 2023 - Top 10

Review of 2022 Performance

Selections for 2023

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Bluesky Ventura

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