OPAY moves to new highs as SIPP portfolio is consolidated

This last week has again seen OPAY reach new (adjusted) highs. The share price is within touching distance of hitting 400+ when the company is quoted on the FTSE250 - anticipated to happen in early December.

Further to my last blog, I've continued updating and consolidating the shareholdings within my SIPP. This continues to be (generally) in-line with the criteria I have set myself when reviewing SIPP performance earlier this year, ie:-
1) Investment companies to have a market value of greater than £500 million
2) Investment companies to have a yield of at least 3%.
3) Investment companies to be without significant debt, or able to cover debt from cash reserves (if this does not make sense that is because I am NOT a trained financial analyst).

I have been able to finance the purchases by monthly contributions to the SIPP (£750 per month) and from the sale of my entire shareholding in International Personal Finance (IPF) whose share price has recently spiked to 425+, and by trimming my shareholding in Fidelity Asian Value IT (FAS).

The current shareholdings are as follows:
1) BlackRock Smaller Co IT (BRSC) : 894 shares

2) Fidelity Asian Values IT (FAS) : 1190 shares
3) GlaxoSmithKline (GSK) : 620 shares

4) GVC Holdings (GVC) : 1000 shares
5) Hill & Smith Holdings (HILS) : 375 shares

6) International Capital Group (ICP): 643 shares
7) International Personal Finance (IPF) : SOLD

8) Laird (LRD): 402 shares

9) Lancashire Holdings (LRE) : 1000 shares

10) Optimal Payments (OPAY) : 10000 shares

11) RPS Group (RPS): 686 shares

12) Segro (SGRO) : 1300 shares

13) Brown Group (BWNG) : 492 shares

14) Ashmore (ASHM) : 300 shares

15) RSA Insurance (RSA) : 200 shares

16) Unilever (ULVR) : 58 shares

17) BAE (BA.) : 185 shares

18) Pearson (PSON) : 72 shares
19) Cenkos (CNKS) : 870 shares

Financial Data for SIPP
Target at 31^st December 2014 = £86,000

Actual Value on 31st December 2014 = £75,780 (under performed by £10,220)

Current Value (12^th October 2015) = £89,896 (approx), including cash of £2,621

Target for 31^st December 2015 = £107,160

Value at commencement of blog (1^st August 2012) = £51,684.02

Monthly contributions since commencement of blog:
36 months @ £300 = £10,800

3 months @ £750 = £2,250
Total = £13,050

Capital Growth = £89,896 less (£51,684.02 + £13,050) = £25,152 or 39%

OPAY roars on prospect of entry to FTSE250

OPAY has leapt to new (adjusted) highs today, which suggests that once the company is quoted on the FTSE250 - anticipated to happen in early December - that the share price could top 400.

Further to my last blog, I've continued updating my SIPP.  This is generally in-line with the criteria I have set myself when reviewing SIPP performance earlier this year, ie:-
1) Investment companies to have a market value of greater than £500 million
2) Investment companies to have a yield of at least 3%.
3) Investment companies to be without significant debt, or able to cover debt from cash reserves (if this does not make sense that is because I am NOT a trained financial analyst).

As such I have made initial purchases in:-
Brown Group (BWNG): 190 shares @ 324
Ashmore (ASHM): 300 shares @ 263
Intermediate Capital (ICP): 275 shares @ 541
RSA Insurance (RSA): 200 shares @ 656
Unilever (ULVR): 31 shares @ 2642
BAE (BA.): 185 shares @ 438
Pearson ((PSON): 72 shares @ 1124

I have been able to finance the purchases by contributions to the SIPP and from the sale of my entire shareholding in Standard Chartered Bank (STAN) whose share price has recently collapsed with little prospect of recovery in the short-term.  As such, I've decided to cut my losses and move the capital into other companies where the prospects seem better.

Financial Data for SIPP
Target at 31^st December 2014 = £86,000

Actual Value on 31st December 2014 = £75,780 (under by £10,220)

Current Value (25^th September 2015) = £87,867 (approx), including cash of £570

Target for 31^st December 2015 = £107,160

Value at commencement of blog (1^st August 2012) = £51,684.02

Monthly contributions since commencement of blog:
36 months @ £300 = £10,800

2 months @ £750 = £1,500
Total = £12,300

Capital Growth = £87,867 less (£51,684.02 + £12,300) = £23,883 or 37%

SIPP update continues

I've recently decided to bite the bullet and close the book on my ill-fated purchase of XChanging (XCH). As such, I've sold off my entire 3000 shareholding, recouping (after costs) £3,087.43. This has resulted in a loss of just under £2,000 or approx 40% of my initial investment.
Disappointingly awful.

Pending the adjustment of my OPAY shareholding - which should follow once the company is quoted on the FTSE250 - I've decided to commence updating my SIPP.  This is in-line with the criteria I have set myself when reviewing SIPP performance earlier this year, ie:-
1) Investment companies to have a market value between £500m - £3,000m
2) Investment companies to have a yield of at least 3%.
3) Investment companies to be without significant debt, or able to cover debt from cash reserves (if this does not make sense that is because I am NOT a trained financial analyst).

As such, taking advantage of the monies recouped from the sale of XCH, I have been able to make initial purchases in a couple of companies:-
Laird (LRD): 190 shares @ 400
and
RPS Group (RPS): 330 shares @ 229
I have also brought the shareholding in BRSC up to 10% of the SIPP value, approx £8,300, by purchasing another 140 shares @ 939.

Financial Data for SIPP
Target at 31^st December 2014 = £86,000

Actual Value on 31st December 2014 = £75,780 (under by £10,220)

Current Value (10^th August 2015) = £84,010 (approx), including cash of £2,285

Target for 31^st December 2015 = £107,160

Value at commencement of blog (1^st August 2012) = £51,684.02

Monthly contributions since commencement of blog:
36mths @ £300 = £10,800

1 month @ £750 = £750
Total = £11,550

Capital Growth = £84,010 less (£51,684.02 + £11,550) = £20,776 or 32%

Mid-year update

The SIPP has undergone a fair bit of turmoil over the past few months. 

When my last blog was posted (25^th March 2015) the value of the SIPP was approx £89,170. At that time, my 10,000 shares in OPAY were worth over £32,000 and they are now worth £26,600.  Unfortunately, some of my other shareholdings have also taken a bit of a hit, and my overall SIPP value now stands at just over £81,100. This is disconcerting seeing as my target for 31^st December 2014 was £86,000 with my target for 31^st December 2015 set at £107,000.
That said, if things pan-out well with OPAY, the December '15 target could be achievable.

Back in March, my SIPP consisted of 17 shareholdings and to take advantage of the OPAY rights issue there had to be some reduction in the number of holdings.  The shareholdings sold were:-

Premier Foods (PFD): 5100 shares recouping £2,275.21

Lavendon Group (LVD): 1400 shares recouping £2,417.78

Telit Communications (TCM): 400 shares recouping £920.05

Selling Telit (TCM) wasn’t a good move as the shares increased in value significantly on good results and have traded at over 340 (equivalent to £1,360) since March.  Similarly, Lavendon Group (LVD) has also climbed above 200 from the sale price of 173, but has now retreated back to under 180; whereas selling Premier Foods (PFD) when I did was a good move.

In May, Meggitt (MGGT) was another disposal at 514 per share (recouping £2,302.63) and that company has slumped to 450 despite rumours of a merger in the news with Cobham (COB). Both of these companies are now looking like decent dividend/recovery plays, and require further investigation.

Looking back now, the disposals to finance the OPAY rights issue were good decisions on the whole. The gamble now is will OPAY perform this year? Personally, I think 320 is within reach very soon after the company enters the FTSE250, and we could see 400+ before the end of the year. If we do see 400 then the SIPP will be worth approx £95,000+.  This will be short of my target, but not far short.

A recent strategic decision regarding my SIPP (to ease the burden of management) is to dispose of shares in companies with a market value of under £1 billion and, instead, put up to 10% of the value of the SIPP into an Investment Trust that effectively specialises in companies of this size.  After some investigation of performance and make-up of suitable investment trusts, I selected BlackRock Smaller Companies Trust (BRSC).  Since 1^st March, the following purchases have been made in BRSC:-

24-March:  202 shares costing £1,645.46 (including commission & fees)

11-May:  199 shares costing £1,758.39

27-May:  175 shares costing £1,599.07

13-July:  178 shares costing £1,688.50

 Total shares purchased = 754 costing £6,691.42 or 888 per share (approx), with BRSC currently trading at 925-930.

These purchases were almost entirely financed by the sale of my shareholding in the JPMorgan Emerging Markets IT of 860 shares, recouping £5,174.02.

I have also consolidated my holdings in both Segro (SGR) and GVC Holdings (GVC).

On 2^nd-July, a further 400 shares in Segro (SGRO) was made at a cost of £1,649.70 (ave. 413) and this was a good move with the shares currently valued at 430+.

On the same day, a further 500 shares in GVC Holdings were purchased at a cost of £2,250.58 (ave. 450) as a potential successful bid for BWin was in the offing.  That hasn’t proven fruitful (yet) and the shares have slumped to 420; but there is renewed activity over the bid, and it could yet prove successful.

The shareholdings in International Personal Finance (IPF) and XChanging (XCR) have proved most disappointing. Due to changes in financial policy in Poland, where IPF obtain 60% of their profits, the share-price in IPF has dropped 25% to 380 (from approx 500).  As such, I’ve trimmed my shareholding by 360 to 1440 which are worth about £5,500. Xchanging is even worse.  There appears to be very little liquidity in XChanging, and this is something I didn’t take account of before making my purchase. I bought XChanging at an average price of 170, and they are now at 116, down over 30%. Why did I buy at 170?  Because I thought they had the capability to move above 200, but right now I’d just like to reduce my loss to something more bearable.

My latest purchase is 430 shares at 570 in the Intermediate Capital Group (ICP), and this financial company (which pays a healthy dividend) should benefit from increased confidence in Europe post the Greek economic settlement, and tick along quite nicely even if the European economy doesn't roar in 2016.

Target at 31^st December 2014 = £86,000

Actual Value on 28^th July 2015 = £75,780 (under by £10,220)

Current Value (29^th July 2015) = £81,100 (approx), including cash of £1,193

Target for 31^st December 2015 = £107,160

Value at commencement of blog (1^st August 2012) = £51,684.02

Monthly contributions since commencement of blog = 36mths @ £300 = £10,800

Capital Growth = £81,100 less (£51,684.02 + £10,800) = £18,616 or 36%

Update on OPAY - a happy dilemma

After taking some advice from a mate in the City, I'm re-jigging this posting and just confirming the numbers.
Now that the dust has settled, and OPAY has been resumed trading on the markets, the share price has settled down to approx 565 per share. That means my OPAY shares are worth £22,600.
My overall SIPP value stands at £89,170 including cash of £3,943.30

Where I go from here with OPAY, I'm not too sure.
To take up the rights issue - 5 new shares for each of my 3 existing shares - I will have to find another £11,332 plus dealing costs (if any). I'm entitled to 6,666 new shares at £1.67 each.
What I may do is sell off part of my options to the rights issue to finance exercising part of it.

Should I exercise the option, I'd have 10,666 shares worth approx (£22,600 plus £11,332) £33,932
This implies a share price on Day-1 (post rights issue) of £3.18 approx.
This takes no account of any "market approval" of the rights issue, but there may (or may not) be an uplift on Day-1.

If I do not exercise the option, but decide to sell it, then I should be able to sell the option to the rights issue at £1.51 per (new) share - this is £3.18 less the option price of £1.67.  That will give me approx, £10,000 in cash, and I will retain my 4000 shareholding which will be worth (at £3.18 a share) approx £12,720.  Note: £10,000 + £12,720 is approximately equal to the current value of the shares which is £22,600.

I have a couple of weeks to ponder this over, and decide whether to take:-
1) the £10,000 in cash (this seems to be the simplest option);
2) finance the rights-issue either in part;
3) finance the rights-issue in full;
4) Post rights-issue: whether to hold-on for a few weeks or sell-off a major portion and rebalance my portfolio.

OPAY seeking reverse takeover entry into FTSE250

Tremendous news this morning regarding the largest shareholding in the SIPP, as OPAY announce record annual figures for the year ending 31st December 2014, and the intention to purchase financial services company Skrill.
This is very exciting news as the combined company could have a share value of 660+ (close on Friday 20th March was 418) and cost savings plus the enhancement brought about by an entry into the FTSE250 for the enlarged group has seen forecasts this morning of a potential share value of 900+. Considering my initial purchase back in March 2012 was at 165, and I've been adding to that with my latest purchase at 307, my current holding of 4000 units is looking good.

Must admit, I thought the company was ripe for a takeover bid, but never thought the company would try and grow exponentially with a reverse takeover and move from AIM into the FTSE250.

Overall, my SIPP has been looking very positive since the turn of the year.
I've been reviewing it more recently, with some additions to the Investment Trusts.
Despite my success with some of my AIM purchases (see OPAY above), some of my stock-picking has been a bit haphazard, and so I've decided to gradually phase out those companies who have a market value of under £300 million from my SIPP. To replace them, I've decided to invest in an IT that specialises in companies of that value: namely BlackRock Smaller Companies Trust (BRSC). I've started off with a purchase equivalent to 2% of the SIPP value and acquired 202 shares, and intend to increase this shareholding by the equivalent of 1% of the SIPP value  per-month during the remainder of 2015, until it reaches an initial maximum of 10% of the SIPP value.

I recently decided to reverse my decision to invest in the smaller companies of the US and I've sold-off my entire holding of 500 shares in the Jupiter US Smaller Companies IT (JUS) and transfer that into my holding of Fidelity Asian Values (FAS), making the total holding 1,990 shares. I feel more positive about growth in the Asian markets than I do about the North American markets. And I also feel the same about Emerging Markets, and my holding in the JPMorgan Emerging Markets IT (JMG) has done well in recent months, so I've topped-up my holding there to 860 shares.

I've doubled my holding in GVC Holdings plc (GVC) to 500 shares as I think this company which operates in internet gambling, has potential to grow significantly. For the same reason, I have also more than doubled my shareholding in Hill & Smith Holdings (HILS) to 375 shares.

Lancashire Holdings (LRE) is a specialist insurance company, and is a tremendous cash generator. Although declared annual dividends are at about 1.80% pa, the company has a history of exceptional special dividends. As such, to take advantage of this I have increased my shareholding to 1000 shares (from 200). 

I have also recently doubled my holding in Premier Foods (PFD) on the premise that they could be due a significant re-rating as they traded at 80+ for much of 2013 (current share price is 44). The transition in supermarkets from large out-of-town shopping centres to smaller local units means that shops have to focus on a limited number of products (due to lack of shelf space and storage) and should (in theory) favour the larger brands, and that will be good for Premier Foods in the long-run. 

Finally, I have trimmed my holding in Telit Communications from 1250 shares to 400 shares as I felt this company was too specialist for my portfolio. I feel similarly about the shareholding in XChanging but, as I'm currently sitting on a large paper loss, I'm waiting for an upturn to sell into. 

Update on the SIPP

When I first started writing the "Pension Builder" blog, I was buying and selling a great deal of shareholdings in individual companies. The period showed a fantastic opening performance due mainly to some good stock-picking. Buying and selling also incurs a fair amount of trading costs and, in an attempt to reduce those costs, I reduced trades by buying better quality and more researched companies.

The last 12 months has suggested that - perhaps - that policy wasn't right for me. It may well work for others, but it wasn't working for me. I think that's because I am not in a position to be able to put in the research required to make it work. I think I'm better using a "scatter-gun" approach whereby (hopefully) most of the share purchases grow, and some grown spectacularly.

As such, those who read this blog will be aware that I've been increasing the number of individual companies in which I have a shareholding with my SIPP.

1) Fidelity Asian Values IT (FAS) : 1337 shares
2) GVC Holdings (GVC) : 250 shares
3) GlaxoSmithKline (GSK) : 620 shares
4) Hill & Smith Holdings (HILS) : 180 shares
5) International Personal Finance (IPF) : 2000 shares
6) JPMorgan Emerging Markets IT (JMG) : 600 shares
7) Jupiter US Smaller Companies IT (JUS) : 500 shares
8) Lancashire Holdings (LRE) : 200 shares
9) Lavendon (LVD) : 1400 shares
10) Meggitt (MGGT) : 450 shares
11) Optimal Payments (OPAY) : 4000 shares
12) Premier Foods (PFD) : 2500 shares
13) Scapa Group (SCPA) : 2080 shares
14) Segro (SGRO) : 900 shares
15) Standard Chartered Bank (STAN) : 280 shares
16) Telit Communications (TCM) : 1250 shares
17) XChanging (XCH) : 3000 shares

Cash £7,514.92 

The larger shareholdings - OPAY and IPF - I am intending to reduce significantly when the opportunity arises. 
With OPAY, my intention is to sell-off 25% of my holding (1000 shares) at about 405-410. For IPF, the sell-off will happen when the share price is around 540-550 when I will dispose of about 50% of the shareholding.
You will notice I have increased my shareholdings in companies like TCM, XCH, STAN, LVD, and MGGT. 
Overall, I'm looking for opportunities to expand into growing and undervalued companies as I want to hit my 20% target for annual growth in 2015 as soon as possible. 

Total SIPP Value (as at 3rd Feb 2015) £77,245 including cash.

Profits taken on Booker Group

After a good run, I’ve decided to take a substantial profit on Booker Group (BOK) and sell-off my entire holding. The dividend potential wasn’t great, and my opinion is there is not much more growth (if any) to come in the short term, bar keeping pace with the market.

Another sale has been Segro (SGRO) which is just off it’s 52-week high of 414, and I’ve decided to trim my holding down to 900 shares and bank some profits.

New additions to the SIPP portfolio are:-

GVC Holdings (GVC) which includes Sportingbet amongst its portfolio of assets. The company looks set for a re-rating as profits are rising and the dividend yield is over 8%.

Lavendon Group (LVD) is a supplier of construction equipment which is growing in market share in the Middle East. Presumably, because of the slide in oil price, this share has also slid from 247 down to 160-170 where is appears to be holding. With a good Annual Report expected, this share could be set for a significant short-term re-rating.

Overall, the SIPP portfolio is looking fairly healthy with a current value of £76,760 of which £15,691 is in cash thanks to the sale of the Booker Group shareholding.

With the gamble of a unbelievably large cash injection into the EU countries by Mario Draghi, and the Greek election result which should see a renegotiation of the austerity measures holding back the European economies, I’m hopeful that economies will spring to life in the coming months.

End of year report for 2014

The value of the SIPP at the time of writing is £75,780 which is well down on my target for 31st December 2014 of £86,000 - but it is still up £5,380 for the year. If we take away the 12 monthly contributions of £300, and we are left with "growth" of just £1,780, or just 2.50%.

Currently, the SIPP portfolio consists of:-
Booker (BOK) : 4,500 shares valued at £7,080 (approx)
Fidelity Asian Values IT (FAS) : 1,337 shares valued at £3,250
GlaxoSmithKline (GSK) : 620 share valued at £8,800
International Personal Finance (IPF) : 2,000 shares valued at £8,700
JPMorgan Emerging Markets IT (JMG) : 600 shares valued at £3,600
Jupiter US Smaller Companies IT (JUS) : 500 shares valued at £3,400
Optimal Payments (OPAY) : 4000 shares valued at £13,950
Scapa Group (SCPA) : 2,080 shares valued at £2,740
Segro (SGRO) : 1,140 shares valued at £4,440
Telit Communications (TCM) : 850 shares valued at £1,900
XChanging (XCH) : 1,740 shares valued at £2,670

That balance is cash of £15,183.86