I will follow-up later with a longer post explaining my thinking behind my portfolio changes. For now just getting on paper the changes effective as of market close today:
- Reduce Nagacorp position to 4% of portfolio.
- Sell full holding in Scorpio Tankers.
- Increase position in Irisity to 4% of portfolio (still Speculative).
- New holding Cheetah Mobile at 3% of portfolio (Speculative bucket).
- For the remainder of my cash (about 7%) buy equally into Philip Morris and British American Tobacco (Long Term bucket).
This means I will be fully invested. Going forward for something to go in, something has to go out or be reduced.
21 thoughts to “Quick update on portfolio changes”
Maybe fits into your dental series?
p23 Interview with Polen Capital
Sorry for the unrelated comment but you should take a look at Games Workshop in the UK. Basically a high margin, high ROIC IP/licensing biz (built around tabletop games using its own IP) that is fully vertically integrated and runs (now) best-in-class specialty retail stores (margin-wise) to boot. Insane improvement in profitability metrics and revenue growth since new mgmt took over in 2015/2016 and on the verge of seeing growth pick up again in 2H19/2020 as they bring new production facilities online. Mostly US/Europe rev base with optionality in Asia over the next few years. Basically the Louis Vuitton of board games.
Thanks, I remember reading about this company a few years ago. Looking at the stock performance I should have looked deeper.. thanks for the idea!
I don’t know Tonly in detail. Yet their finsncials at first sight apper rather mediocre… No growth, random up/down, thin margins, no huge investments (at least on R&D, which being electronics that should be it).
Probably I am missing stg…
Well you can read my analysis on it 🙂 but you are somewhat right, its not a great company, its just that you can buy it at a great price
Great results for Naga, especially considering they had a one-off gain of $60m from EGM licensing last year.
Lots of levers to continue the trajectory into 2019 and beyond.
Corp gov remains a concern but i think the regime have learnt their lessons after getting burnt during the conversion price debacle. For me, more likely a new bond then another share placing.
That being said, i don’t like reading about the contingent CEO bonus. I hope he writes it off instead of continuing to defer it.
Will also continue to monitor the project in Russia more closely. Unfortunately, not much information disclosed to shareholders.
Im also a bit confused now how to do. Agree the report was great, I think the stock is trading so strongly on the color given on the VIP junkets. Its now clear how big of an impact they do and the comment on brining on more junkets is obviously very positive. That was my main takeaway from the report
Both how Russia and Naga3 expansion will be handled with matter a lot for the coming 1-2 years stock performance. If handled very well stock could double from here. Track record though is diluting shareholders in this process. Maybe now when its a large cap, as you say it will be handled in a better way.
Imho, Naga3 less concerned about. If built and financed correctly with continued stability of the political regime then the power of its monopoly will naturally yield good results.
Suncity will expand it’s presence next year and they also signed a new junket which will be operating in q1 this year. When all 4 big junkets are operational and ramped up we should see interesting things.
At some point a split of the shares may be good. A board lot now is a bit over hk$20k. Stock needs to be more liquid in my opinion. That being said, it had immense volume today. Biggest I’ve seen.
If everything works out then perhaps it can double in 2 to 3 years.
I’m also taking a bit of profit of the table, sold 1/4 of my position. It’s unfortunate that the majority owner still does not completely scrap his bonus entitlements. He should understand now as majority owner that he will become more rich if the stock prices appreciates. He does have high ambitions, so if he want to become more successful he needs to stop this kind of stuff. I’m still betting on that. And also because the company is ridiculously profitable. I will load up more shares on a decline, which I hope will happen at some point.
I’m curious why you cut your Nagacorp position in half; is it profit taking because of the run up lately, or are you concerned about other things?
Profit taking and as you know I dont really trust the majority owner. Naga3 coming along soon, new potential convertible bond? Who knows..
I’ve seen that you have a lot of Asian companies. Do you know Pax Global from HK market?
Indeed I do, I think I have it in my watchlist of stocks on the portfolio page. i have a half deep dive on that. i thought it looked pretty attractive at first, but got more hesitant on corp governance and the mgmt of the company. Whats your thoughts
Care to comment why you changed your mind on Scorpio?
Yes I will when I find time to post, short answer I have low visibility on a turn around, I dont have access to day rates anymore. The stock was a gamble and Im kind of putting a stop loss on the position..
Superior performance is either achieved either by selecting great & growing businesses and staying onto them, or by having a superior mind capable of seeing further/faster than others and constantly swapping your portfolio.
The greatest investors of all times (you name them 😉 ) … never tried to play the second game. Personally, I will never be as good as those great investors, but learning such basic lesson from them is the absolute least I can do.
Bottomline: you change quite often !
I agree that is two ways of achieving positive alpha. My main goal is to find great businesses for my long term time bucket. But i also have the other buckets for quicker turn around. So do you approve of deep value investing? It doesnt really fall into your two ways of achieving superior performance..
My approval is irrelevant x-P …
Deep value to me sounds “normal value”-expanded. Issues mentioned for value investing, apply here too… 😉
My only mindteaser now is guessing which is Fundsmith undisclosed position…
I would classify my Tonly Electronics holding as deep value for example. Same with Dream International. Maybe not ideal companies to hold for 10 years, but they should revalue at some point if they keep growing..