Portfolio Performance (Month 15)

20160131 - Performance Chart

20160131 - Performance Table

Over the 3 months to 31 January 2016 my share portfolio has continued to outperform the benchmark indices, returning 1.0% for the 3 month period compared to -3.5% for the All Ordinaries Accumulation Index and -1.4% for the Small Ordinaries Accumulation Index.  Broadly speaking, the mining-related stocks in my portfolio (e.g., mining services companies) underperformed, while the general industrial companies outperformed.  My mining-related stocks had performed very strongly for the 6-9 months leading up to this 3 month period, but were marked down by the market in the face of continued declines in commodity prices in late 2015 and early 2016.  I still believe that there is significant value in the basket of mining-related stocks that I hold and so I have generally been happy to hold or add to these positions over time.  Note that I don’t hold any pure mining stocks because (i) I don’t know much about mining operations, and (ii) I don’t want that level of straight commodity exposure in my portfolio.

Some of the better performers during the period were:

  • Collins Foods (CKF), up 47% over the 3 months, which reported good results on the back of improving margins and a full year of contributions from their (very good) acquisition of a portfolio of KFC restaurants – the market finally seems to be understanding that the poorly performing Sizzler restaurants are not a big driver of the financial performance of the business;
  • Pental (PTL), up 36% over the 3 months, which rose after some analyst buy recommendations and positive research reports; and
  • Service Stream (SSM) and Thinksmart (TSM) were new additions during the period that both performed strongly.

I have made a number of portfolio changes after the completion of the Australian half-year reporting season and will post some updates on new and exited positions over the upcoming weeks.

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