I did well in my Greenblatt-esque Fantasy Fund, back when the Fantasy Funds were available. I figured if Stockopedia was to resurrect the idea I'd see if quality companies might be a good idea.
There's been some discussion about compounders lately. I figured I'd share a list of 6 as a mini-portfolio. I own all of the shares listed below. So they're not just crapshoot stocks. Here they are:
- Computacenter (LON:CCC) 2378p
- Cranswick (LON:CWK) 3310p
- IG group (LON:IGG) 700p
- Macfarlane (LON:MACF) 107p
- Oakley Capital Investments (LON:OCI) 468p
- Renew Holdings (LON:RNWH) 735p
You can verify for yourself that these are accurate bid prices, as given by Stockopedia. For reference, the FTSE All Share Index (FTSE:ASX) is 4228
You should assume an equal-weight of the portfolio. My plan is to revisit the portfolio in a year, assuming I remember.
Well, I don't really want to go through each of the holdings. The common thread with them is that they have good returns on capital, their FCF is higher than the preceding 5 years, and they have increased divvies at least 5% annually over the last 5 years on average. And they don't keep issuing shares.
To take a share at random, IGG has increased its net profits by 24% annually over the last 5 years. Its ROCE is 28%, and its dividends have risen 6.6% annually on average. Astonishingly, it is on a yield of 6.8%, a PE of 7, and a P/FCF of 5.
And well, without going through all the numbers, MACF is on a PE of 9.1, CCC on 14 (hardly a demanding ratio), CWK on 15, and RNWH on 12.
How much cheaper do you want this stuff anyway?
OCI is a little different. It's a PE (Private Equity) fund. It's on a PBV of 0.7, although that might be entirely accurate. Directors have made large top-ups recently, giving me confidence in likely future performance.
I reckon investors are in for a reasonable shout at these prices. Shall we see?
Wish me luck.
