Hvivo (HVO.L; AIM All-Share. Market capitalisation: £191m, 28.5p, 0.0% of JIC Portfolio. Medium Risk/High Reward = 0.0% target weight)
I have sold my position at 28.5p for a slight loss this morning (£453).
In my review of positions on Friday, I wrote: “The share price has been down a few per cent since the results. I’m broadly happy with my conclusion on Tuesday, but my conviction in this stock is not very high. It is fine in a 27-stock portfolio, but would this be a candidate for disposal if I were forced to reduce the number of positions to twenty? Yes.”
I’m not in a hurry to sell all the positions where my conviction is not high enough for them to be included in a twenty-stock portfolio, but with Hvivo, I fear that it could be hit by two changes in the upcoming budget. There is speculation that IHT relief will be removed from AIM stocks and that the capital gains tax rate will increase to marginal income tax rates. I think this could lead to selling pressure on the shares over the next six and a half weeks.
That alone would not be enough to make me sell if I thought there was a strong case for holding the shares. I think there are better uses for the cash within existing positions in the JIC Portfolio.
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