Was there a saying that not much happens during the summer months in the markets? You certainly can’t say that for my portfolio which had a very turbulent Q3. Seven of the stocks in my portfolio returned more than -10% over the quarter, while 7 returned move than +15%. Broadly speaking netting off and returning just above positive territory for the period on an average basis. The table with the portfolio returns are now updated. The broadly flat performance lagged marginally the FTSE AIM(+1.6%) and S&P which retuned very impressive 8%.
Stand out performers were Google, Distribution Finance, Journeo and GetBusy. All of them had earnings which allayed some investor concerns and the returns followed.
Top underperformers were Hilton Foods, Billington and Transense. Hilton foods had a disappointing update which indicated some cost overruns in the Canadian construction for Walmart as well as some salmon contamination in their Greek facilities. Billington just had an update and the results were significantly down due to the tough market environment. It is a solidly run company but unfortunately they are a price taker and many of their competitors with significant fixed cost base are undercutting the market to recover their costs. I suspect the shares will languish until the start of 2026. I think the management is very good and has skin in the game so I am sticking with it. Transense, had a disappointing update(see previous post).
Trades during the period
Buys: As indicated a few months ago, I purchased Hermes, Meta, TJX and FRP. All of them have done well so far. While Hermes was down for the quarter, I am flat since I purchased the shares as I bought them post the dip in July at about EUR 2100 levels. FRP has rebounded as expected(+18% since purchase) so I am monitoring this closely as it is more of a tactical position. If the shares do go up another 10-15% I will likely liquidate.
Sells: While there was some tactical trading during the quarter, the only position which I exited is Transense. After being invested for over 2yrs in the shares, I felt that the progress that the company is making is too slow. When I acquired the shares, the market cap was covered by their royalty income, while currently they are running at -2m per year loss. I doubt they will be able to ramp up the SAW technology so much that they meaningfully increase their profits before 2030(when the royalties expire).
During the period I’ve managed to research a few more stocks, but unfortunately hasn’t been able to build up any positions yet.