๐๐๐ง๐ ๐๐ฉ๐จ ๐๐ฃ๐ ๐ฅ๐๐ง๐๐ค๐ง๐ข๐๐ฃ๐๐ ๐ช๐ฅ๐๐๐ฉ๐: ๐ ๐ช๐ก๐ฎ ๐ฎ๐ฌ๐ฎ๐ฐ
Dear Copiers, Followers and Fellow Investors,
July proved to the best month this year, especially on a relative basis. While most indices ended the month in the red, our portfolio was up nearly +6%. The contrarian investments into the UK (especially), China (close to 0) and Small Caps (big outperformance vs blue chip in the US), all played out, while big tech ($NSDQ100) was suffering in the US and beyond.
Some of the biggest asset managers pointed out the strength of Europe and the UK, especially due to the political stability in the latter. Although the first 2 sessions of August were brutal, this post focuses on July and especially those stocks that contributed to this excellent performance.
๐ข $CPI.L (Capita) +46.82%
On July 4th, Capita announced the sale of Capita One (its standalone software division) to Orchard Information Systems for ยฃ200m. The sale price is circa 10X EBITDA and the sale is expended to significantly reshape the Capitaโs operational focus and enhance shareholder returns.
The news was very well received by the market and sent the price soaring over 21% on the announcement and another 20% in the next couple of days. The price bounced back from the low levels but naturally had a significant impact on the portfolio as we have a rather big exposure to this undervalued stock.
๐ข $CARD.L (Card Factory PLC) : +27.78%
On July 16th, Berenberg Bank set a target price of 154 GBX for the company, which when compared to the Card Factory PLC share price of 100 GBX at opening today (16/07/2024) indicates a potential upside of 53.9% (we started the month at 93 and finished at 119.6).
Other news that kept the share price growing towards the end of the month was the announcement of the upcoming admission of 750,000 ordinary shares to the Official List via the London Stock Exchange. This move indicates a potential expansion of the companyโs equity base.
๐ข $LOVE (The Lovesac Company): +24.7%
The news that helped the price go up so much, especially between July 8th and 16th:
Three retailers have signed leases at Atlantic Station, a mixed-use development located in Stamford. Lovesac, Golf Lounge 18 and Fresh & Co. will occupy 28,000, 9,000 and 3,000 square feet, respectively. RXR owns the property, which features 650 residences and 82,000 square feet of retail space. Brian Scruton of Cushman & Wakefield represented Lovesac in the lease negotiations.
Naturally, the performance also coincided with stronger performance of Small Caps vs Blue Chips in the US, as mentioned in the opening paragraph of this post.
๐ข $KIE.L (Kier Group PLC) +18.66%
Kier Group plc has reported strong FY24 performance with revenue and profit meeting market expectations, a year-end order book worth approximately ยฃ10.8 billion, and a secure 85% of FY25โs revenue. The company also highlighted a net cash position of ยฃ165 million, significant debt reduction, and the resumption of dividend payments. This positive momentum reflects Kierโs strategic position as a key player in UK infrastructure, benefiting from government investments and public sector contracts.
Thank you to my copiers and fellow investors for reading this month.
Please let me know if you have any questions.
Best regards,
MJ... Show More
