For quite a while it seemed that June would be a quiet month. It turns out that two major profit warnings, from Somero and Craneware, takes quite the shine off of things. Neither of these were events that I thought likely given their track record of solid trading during positive economic conditions. Just goes to show why diversification is so important. Curiously both of these warnings stemmed from difficulties in North America and maybe this is the start of a trend? A joke obviously but it wouldn't be the first time that a conclusion has been extracted from two data points. Hopefully July will prove much less exciting, as the financial markets start winding down for the summer, and I'll be able to relax in the sunshine.
Purchases
K3 Capital Bought at 127p - June 19
As mentioned below I doubled my holding here on the morning of their positive trading update. The driver for me was that trading appeared to have stabilised and that, for now, there remains the potential for a hefty rebound in 2020. This must rely on a number of the large deals completing in the year but if the board can't manage to get a few of these over the line then the whole expansionary business model must come under suspicion. It's nice to see that a few directors have followed me in increasing their holdings and we've all done well with the share price bouncing 90% in the three weeks following the update!
NewRiver Retail Bought at 195p - June 19
According to their recent results NRR have an EPRA NAV of 261p and an annual dividend of 21.6p which they intend to maintain while working to improve the dividend cover from 84% of UFFO. With the NAV falling by 10%, mostly as a result of the portfolio valuation falling by 6.4%, the share price has been weak of late. In addition Neil Woodford has (or had) a large holding here and has been steadily liquidating. In consequence the share price has fallen from recent highs of ~250p down to below 200p. When the price fell to 216p, giving a yield of 10%, I almost bought but held off due to the Woodford issue. However when it fell below 196.4p, implying an 11% yield, I decided that this was a fair point to top up and unsurprisingly there was plenty of liquidity on offer!…
