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Monthly Archives: October 2015

PostIt Note

3M has been acquired today, with a large cap sizing, to mop up some of the cash accumulated in Obliquity London (dividends + Volkswagen sale). There’s very little to write about, it’s a model Obliquity stock and had been on the watch list for a while. Timing doesn’t look too good in the very short term as it’s just gone up in the past few days, but better get in now than later at a higher price.

Insulation

In an internal trade, the Stamp Collection has “sold” Kingspan, an insulation manufacturer, to Obliquity London. It had been rejected for the main portfolio, back in 2012, for being too small, undiversified and family-owned, but it’s maturing nicely, diversifying both through acquisition and organic developments. Still not cheap, but larger and stronger, so good enough for graduation. It also doesn’t fit so much any more in the stamps portfolio which is about special situations and small oddballs.

Keep steady…

Of the recent buys, Pearson has seen a harsh profit warning, but nothing that distracts from the underlying case, so we’ll do nothing, other than lament the unfortunate timing.

… if not forgetful

In a slightly more comical development, I saw the value of SIG plc drop on a profit warning in the FT’s portfolio tool. This is a company bought at inception, when I went through a lot of companies over a few weeks, and the funny thing here is I was convinced it was the similarly named packaging manufacturer SIG, which it turns out is not listed (though it may have been at the time in 2012). The SIG in the portfolio is a building supplies manufacturer that I vaguely recall looking at but probably not decide to buy. It seems okay but may be in need of a more thorough review. I guess it’s a good indicator of sufficient diversification.

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Panmure Gordon

I am already forgetting to keep to my rule to blog before trading, so catching up with today’s trade: the acquisition of Panmure Gordon for the Obliquity Stamps collection.

The rationale is simple: it seems a reasonably well run business with a solid balance sheet, on a very cheap rating on classic value metrics, probably due to the cyclical business and recent acquisitions. It also diversifies me a bit from my usual fare of packaging companies and pipe manufacturers. On a macro level it could benefit from big banks withdrawing from some areas due to regulatory headwinds.

Back to the future: AIM 2012 IPOs

Morning mist in burn forest

Burnt Forest (credit: Charles Peterson, petechar on Flickr)

Talking of AIM IPOs, on a tangential point I’ve been looking at the historical list of AIM IPOs and been through all of 2012 ones, to see if there was something to be learned from their fate 3 years later. Taking out investment vehicles, Chinese/Malaysian companies (mostly frauds, very fashionably that year) and resource companies (oil and gas, miners, not all fraud but a lot of dodgy stuff and I’m not covering that sector) we’re left with just 10 companies still standing. A couple of the 2012 listings apparently got taken over legitimately, and a couple of bankruptcies might have been non fraudulent failures but what a track record.

I’ve been wondering if there might be modest alpha in a simple “IPO survival” strategy. It seems the get-rick-quick schemes drop like flies quite quickly. The remaining businesses are probably legit although it’s still a mixed bunch. It may have been a bad year.

Here’s the list of 2012 AIM IPO survivors (ex invest. cos, China and resources):

Name Sector
VENN LIFE SCIENCES Health Care Providers
CLINIGEN GROUP Drug Retailers
GOOD ENERGY GROUP PLC Alternative Electricity
REVOLYMER Speciality Chemicals
BELVOIR LETTINGS Real Estate Services
SNOOZEBOX HLDGS Hotels
UTILITYWISE Business support services
RETROSCREEN VIROLOGY, now HVIVO Biotechnology
BLUR GROUP Internet
WANDISCO Software