The STRIDE Blog

#3 Little Acorns: value stocks hold their own in tough market

stride-3-little-acorns-value-stocks-hold-their-own-in-tough-market-socialThere's been little Christmas cheer in the markets over the last couple of weeks - I've seen my portfolio dip 1.37%. I'm still beating the S&P 500 though, which is down 2.89% over the same period. 

There has been a run of bad news since my last post. Japan has fallen into recession, oil prices have dropped further and Russia has hiked interest rates from 10.5% to 17%. The energy sector losses alone saw some global markets record their biggest losses for months.

So while Little Acorns has yet to set the world on fire, I'm pleased that my stocks have held their own during this tough time - and I'm still on the lookout for my final four slices. 

4 weeks in - summary

While it was disheartening to see my portfolio total go down, I do feel confident in my stock selection. My portfolio dropped less than some of the biggest indexes, proving my holdings to be strong and resilent to some real market pressure. (See the S&P 500 dip charted below)

  SP500_dec_14

 

There is conflicting news around at the moment regarding emerging markets - some say they are healthy, others say not - and many of the current opportunities I'm watching are in these markets. I do trust STRIDE and many of my holdings are in the far east because, despite the state of the markets, the businesses all have very strong ratings, low debt, low P/E and most of them pay dividends.

I will check out any businesses that STRIDE recommends as a consider buy, even if they are in unpopular markets. In fact, as we've seen over and over again, these can represent the best bargains when those markets recover, even if it means watching the value of the stocks drop in the short-term.

Avant, my one Japanese stock, has taken a bit of a hammering; predictable considering what's going on in Japan right now. And even if my trading platform supported it, I just wouldn't feel comfortable buying anything in a place as volatile as Russia. 

My favourite watch listed business currently is Monadelphous, an Australian engineering group providing construction, maintenance and industrial services to the resources, energy and infrastructure sectors. This company is cash rich, has almost no debt and is currently trading way below its fair value.

Monadelphous has recently announced the acquisition of a water infrastructure business with ongoing contracts across Australia and New Zealand. It is forecast for 2.82% growth, paid a dividend this year of 7.37% and has a deep, wide economic moat. All great signs as far as I'm concerned. As soon as STRIDE tells me the share price has stopped falling and it's time to buy, I'm in there.

I do realise some people will think I'm mad for considering this business. It's well known for working with the Australian mining sector which is currently taking a huge dive. But it has lots of long-term contracted revenue for all sorts of engineering projects across many sectors and is not solely dependent on mines for its income, as the price seems to imply. 

Biggest gainer since last post is C-QUADRAT :  +12.01%

Biggest loser SEAL: -27.84%

Current overall portfolio value: $105,234.93

Here's my portfolio update email from 18th December. Compare with my last update here. 

Merry Christmas and catch you in the new year!

LA_email_19.12.14

Topics: 3D Value Investing, International Investing, Independent Investor, Little Acorns Portfolio

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