Capita

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My Approach to Investing

Summary

I focus my efforts on small and mid-sized companies searching for those where the growth prospects are not reflected in the share price. I am disciplined about the valuation I am prepared to pay; I don’t like to pay over 20x forecast earnings and favour companies that are paying a growing dividend and have a prospective dividend yield of at least 2.0%. I search for companies generating strong cash flow and if not having net cash, then debt levels that is low to moderate. Where possible I like to meet management and understand what makes them tick and if they have a decent stake in the business so much the better; our interests are aligned! I like companies that are beating expectations and earnings forecasts are being upgraded. Ultimately I am looking for the “double whammy” that comes from a re-rating and from faster than expected earnings growth. Having found a potential investment I look at the share price chart as it can help with timing; so often resistance and support levels work. I size a position based on my assessment of the potential Risk and Reward of the stock. I hold between 20 and 30 holdings, making use of investment trusts for overseas or thematic exposure.

The most important number to me is the return of the Portfolio! I try not to get too emotionally involved with individual companies; if I cut a holding and it immediately bounces, so be it. All that matters is the return of the Portfolio, each month, each year, each decade!

I invest principally in the UK

I invest mainly in UK stocks as that is where I have gained my experience. There are clearly opportunities to invest in overseas companies, and it is fair to say that it is now much easier to get the information you need. I think that for a private investor, such as myself, with limited time resources, it is better not to spread my net too wide. For me, it makes sense to focus my efforts on a market where I have experience and familiarity.

I focus on mid and small-sized companies

I focus on mid and small-sized companies but not exclusively.

The FTSE 100 Index comprises the largest 100 companies and by value accounts for around 70% of the UK market, The FTSE 250, (the next 250 companies) accounts for about 25% of the market by value, and the FTSE Small Cap, FTSE Fledgling and FTSE AIM, the remainder.

The table below shows the percentage returns over 1, 3, 5, and 10 years to 31st December 2020

My Approach to Investing

Summary

I focus my efforts on small and mid-sized companies searching for those where the growth prospects are not reflected in the share price. I am disciplined about the valuation I am prepared to pay; I don’t like to pay over 20x forecast earnings and favour companies that are paying a growing dividend and have a prospective dividend yield of at least 2.0%. I search for companies generating strong cash flow and if not having net cash, then debt levels that is low to moderate. Where possible I like to meet management and understand what makes them tick and if they have a decent stake in the business so much the better; our interests are aligned! I like companies that are beating expectations and earnings forecasts are being upgraded. Ultimately I am looking for the “double whammy” that comes from a re-rating and from faster than expected earnings growth. Having found a potential investment I look at the share price chart as it can help with timing; so often resistance and support levels work. I size a position based on my assessment of the potential Risk and Reward of the stock. I hold between 20 and 30 holdings, making use of investment trusts for overseas or thematic exposure.

The most important number to me is the return of the Portfolio! I try not to get too emotionally involved with individual companies; if I cut a holding and it immediately bounces, so be it. All that matters is the return of the Portfolio, each month, each year, each decade!

I invest principally in the UK

I invest mainly in UK stocks as that is where I have gained my experience. There are clearly opportunities to invest in overseas companies, and it is fair to say that it is now much easier to get the information you need. I think that for a private investor, such as myself, with limited time resources, it is better not to spread my net too wide. For me, it makes sense to focus my efforts on a market where I have experience and familiarity.

I focus on mid and small-sized companies

I focus on mid and small-sized companies but not exclusively.

The FTSE 100 Index comprises the largest 100 companies and by value accounts for around 70% of the UK market, The FTSE 250, (the next 250 companies) accounts for about 25% of the market by value, and the FTSE Small Cap, FTSE Fledgling and FTSE AIM, the remainder.

The table below shows the percentage returns over 1, 3, 5, and 10 years to 31st December 2020

ABOUT ME

I launched this website in January 2012 so that I could share with other investors how I manage my investment portfolio; the JIC Portfolio.

There is complete transparency with the current portfolio and all transactions shown. I explain all trades through my blog and hope the site provides food for thought to more experienced investors as well as helping those who are new to managing their own portfolios. I believe JohnsInvestmentChronicle is unique: There are plenty of “tipsters” who will remind you of the “good ones” and quietly forget the disasters; I do not have that luxury as the Portfolio is there for all to see, backed with real money; mine! I have to confront my mistakes and deal with them; there is no hiding place! Above all, this is a true expose of the trials and tribulations of a private investor!

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Current thoughts on my positions - Part V

Sep 164 min read

Current thoughts on my positions - Part V

Rated 5 out of 5 stars.(2)

L&G Gold Mining ETF 3376p, 2.8% of JIC Portfolio and 4.5% of Funds’ Portfolio. With the gold price hitting new highs, the US dollar is...

621 views2 comments

JIC Portfolio Trades - Revisiting an Old Position - funded by trimming another turnaround story and cash

Jul 163 min read

JIC Portfolio Trades - Revisiting an Old Position - funded by trimming another turnaround story and cash

#jicportfoliotrade Capita (CPI.L FTSE Small Cap Index, Market Cap £364m, 20.8p, 2.0% of JIC Portfolio, (Medium Risk/High Reward, target...

630 views0 comments

Time to wield the knife - Cash up to 11.8% - Calnex, Venture Life and Capita sold

Dec 14, 20212 min read

Time to wield the knife - Cash up to 11.8% - Calnex, Venture Life and Capita sold

#jicportfoliotrade Time to wield the knife! Cash increases to 11.8% of JIC Portfolio. Below I outline the sale of three positions. This...

668 views0 comments

Capita - Trading update - steady progress

Dec 13, 20213 min read

Capita - Trading update - steady progress

Capita (CPI.L FTSE 250 Index, Market Cap £761m, 45.25p, 2.5% of JIC Portfolio, (Medium Risk/High Reward, target position 5.0%....

354 views0 comments

Three Trades in JIC Portfolio

Nov 18, 20212 min read

Three Trades in JIC Portfolio

#jicportfoliotrade Lundin Energy (LUNE.SS, Market Cap £8212m, SEK 320, 5.0% of JIC Portfolio, Medium Risk/High Reward = 5.0% target...

609 views0 comments

New Holding added to JIC Portfolio

Nov 9, 20215 min read

New Holding added to JIC Portfolio

#jicportfoliotrade Capita (CPI.L FTSE 250 Index, Market Cap £779m, 46p, 1.5% of JIC Portfolio, (Medium Risk/High Reward, target position...

717 views0 comments

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