It’s the end of the month, so it would normally be time for to review any stocks in the SIF Folio that were nine months old. But I didn’t buy any stocks in October last year, so there aren’t any to review this month.
Rather to my surprise, there is a new stock in my SIF screen that’s eligible for the fund. Bloomsbury Publishing is best known as the Harry Potter publisher. It’s a popular stock with readers of the Small Cap Value Report and also features in Ed Croft’s 2018 NAPS and SNAPS portfolios.
Despite the importance of J. K. Rowling’s schoolboy wizard, Harry Potter isn’t the only magical ingredient in Bloomsbury’s catalogue. The group also publishes non-fiction ‘coffee table’ books and has a growing academic publishing business. The latter is more profitable than you might expect, as community member Beginner explained in a comment on Paul’s piece in May.
Isn’t it too late to buy?
This is a stock I’ve watched for some time, but not got around to buying. This indecision has caused me to miss out on a 38% gain since the firm upgraded its profit guidance in March.
It’s a useful reminder of the benefits of a rules-based approach to investment. Buying and selling shares often feels uncomfortable at the time. But by following a pre-determined strategy, it’s often easier to force yourself to stick to a consistent approach.
Bloomsbury doesn’t look as cheap as it did six months ago, but I don’t think it’s necessarily too late to buy. May’s full-year results were pretty good. Sales rose by 13% to £161.5m and pre-tax profit was 10% higher, at £13.2m. Paul Scott reviewed the figures at the time and was impressed.
Stockopedia’s computers also liked the numbers. The company’s StockRank of 99 and StockRank style of Super Stock were maintained following May’s figures.
Alongside this, it’s worth noting the stock’s Balanced RiskRating. This is the second-lowest of Stockopedia’s five proprietary measures of volatility. According to Stockopedia’s research, stock market history suggests you can enjoy comparable returns from lower volatility stocks to those from more volatile shares. This contradicts conventional wisdom, which says that to achieve higher returns you must accept higher volatility.
You can read more about the RiskRating…
