Equities Portfolio Review – May 18

Overall, May was a kind month for my portfolio, although May was a volatile month. Profits have been on an unblemished run since late March, but that record came to an end at the end of May with the uncertainty over Italy’s political scene causing a sell-off in stocks over the world and that hit many of my portfolio’s shares. That said, with some much-welcome dividends, the portfolio value added 1.5% in the month – outperforming the wider FTSE benchmark.

Here is a list of transactions:

Deposits: £1,000 (currently have £14,000 ISA limit left)
Dividends: Petrofac, Photo-Me

Purchases: International Airlines Group (LON:IAG)

Sales: Associated British Foods (LON:ABF), Photo-Me International (LON:PHTM)

Mixed feelings about these sales. Photo-Me triggered a stop as it drifted past the 15% loss. In the end I was grateful to get out, as a subsequent profit warning led these shares to gap much lower to 110p, which would have been much bigger loss. Having read some updates my opinion of the valuation has changed a little and some of my initial analysis was wrong. They enjoy many monopoly situations in places such as malls, but with the photo machine business in decline, mall operators can simply choose to allocate this space to something that pays them better. This leaves their growth depending on the washing machine business which I have my doubts about longer term. The company are managed well, but even a forward P/E of 11.7 is a bit much.

ABF was disappointing as I did call a bottom nicely, getting in at 2503p. The shares recovered almost immediately after that and once they reached almost 2800p I put a stop in at 2650p which the share then hit, leaving me with a very small profit. I’d like to replace this share with another defensive one but the current uncertainty is seeing me err on the side of caution, and even re-buying this might be an option if the price goes back down.

Pure Passive Investor. Always looking for ways to make money (but not myself) work harder.

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