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James Yardley
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I am studying for the CFA and have experience working with a team of analysts. I paid off my student loan whilst at university by playing poker although I am now fully retired. I invested the remainder of the funds. Twitter: @JamesYardley1 DISCLAIMER: Each article or comment written by this... More
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  • Happy New Year And A Recap Of My Articles In 2013

    Happy New Year!

    It's the end of my first year on Seeking Alpha and I am very thankful I have found this great community. Seeking Alpha has helped my investment thought process and alerted me to many opportunities. This post gives a brief update on the stocks I have written about and I wanted to say thank you to the work of other contributors who have helped me to find some great investments.

    Performance of stocks written about including dividends

    Apple first recommended 24 Jan +27%

    ICAP first recommend 28 Feb +44%

    Barratt and Persimmon first recommended 28th March +32% and +26%

    Apple

    The biggest battle stock of the year has undoubtedly been Apple and it is the stock I have written about the most. This was a classic example of over emotion in the stock market. Despite being probably the most covered stock in the world I would argue the stock has repeatedly traded far away from its true intrinsic value.

    In September 2012 the stock was full of over exuberance with most analysts believing it was just a matter of time before the stock hit $1000. In April 2013 investors were in despair with the stock trading at $380. Its price to earnings ratio was almost a third of the average S&P company once you had taken out the cash. I bought further into the stock at $440 and then again at $390 to make it my largest position. I would argue this up and down story has been yet another piece of evidence against the efficient market hypothesis.

    Going forward I still believe Apple has upside although it is not as cheap as it was. I think Apple will have a strong Christmas quarter and I believe that 2014 will finally be the year that Apple puts the 'lack of innovation' criticism to bed.

    ICAP

    My most satisfying recommendation of the year has been ICAP. Another example of a stock trading on emotion after worries over the LIBOR scandal. I wrote about the stock in February and argued it should have a position in almost any portfolio because it was one of the few stocks which would benefit from rising interest rates. This proved to be the case following Bernanke's talk of tapering. The stock is now up 44% including dividends since my recommendation, although the stock initially fell 10% and gave you a great opportunity to buy more at an almost dividend 8% yield with what I considered little downside. I am now downgrading the stock to a hold based on valuation and recommend considering taking some profits after this substantial run.

    Barratt and Persimmon

    I have written a number of articles on the UK housing market and I recommended buying the UK builders at the end of April as the best way to play this recovery. Barratt is up 32% since then and Persimmon 26%. I expect the UK housing market and these stocks will continue to do well next year.

    Thank you

    Thank you to all the other Seeking Alpha contributors for sharing their great ideas. Valuable Insights wrote some great articles. I have benefited from investing in IMOS. My biggest mistake of the year was not investing in Micron MU which Valuable also trumpeted.

    Also thank you to Kingsley Park Capital, Jonathan Fishman and others for recommending Xyratex which was recently taken over. A fantastic risk reward play which offered very little downside and a lot of upside.

    The GeoTeam, Ashraf Eassa and hundreds of others have written fantastic articles offering great insight. Many thanks to you all.

    Looking Forward

    I believe that next year will be tougher than this one. I will continue to look for unloved stocks which have limited downside but a lot of upside. Apple, ICAP, Vodafone, Royal Mail and Xyratex all offered this at certain points in 2013. Overall though the market is a lot more expensive than it was. I am currently struggling to find an asset class I like and I hope to write an article on this in the near future.

    Disclaimer: Each article or comment written by this author is intended as general information only, and is not intended to provide specific advice, or due diligence to be relied on. As such, the information presented in any article does not consider any reader's personal investment objectives or financial situation; therefore, no article makes any personalized recommendations. See full disclaimer here

    Disclosure: I am long AAPL, IMOS, BTDPF, PSMMF, IAPLF, VOD, XRTX, .

    Additional disclosure: I am long the London Stock Exchange versions of Barratt, Persimmon and ICAP LON:BDEV, LON:PSN and LON:IAP

    Tags: IAPLF, AAPL, BTDPF, PSMMF, IMOS, XRTX, VOD
    Dec 31 1:15 PM | Link | Comment!
  • UK Housing Market And Barratt Update

    A lot has happened in the last few days since I wrote my UK housing market article so I thought I would quickly update my thoughts.

    First of all as I predicted in my article Osborne shows no signs of wanting to back down on the second element of help to buy. He used his speech on the economy to defend the policy and claim victory over some of his critics

    Secondly Barratt (OTC:BTDPF) announced its results on the 11th September. Revenues were up 12.2% and as expected improved margins led to a big 73% increase in underlying pre-tax profit. I need to look at the numbers in more detail but on the face of it this looked like a very strong performance. I thought as usual Mark Clare came across very well on the call.

    The stock dropped about 4% on the day on the results. Some exceptional items mainly related to Barratts debt refinancing dampened the headline profit numbers which might have been a factor. It might have had something to do with the conservative dividend which was relatively small at just 2.5p (although management said they expected this to increase rapidly over the next few years not just with improved earnings but with a lower coverage ratio).

    The biggest reason for the drop was the speech by Vince Cable in which he reiterated his fears of a housing bubble. More unexpectedly, Barclays chief executive, Anthony Jenkins waded into the debate as he 'warned of a property driven boom'. Is it a coincidence that all this happened on the day of Barratts results?

    The pressure keeps mounting. The next day on September 12th the Royal Institute of Surveyors sounded the alarm bells and called for the Bank of England to cap house price growth. Look out for the BOE's financial policy committee meeting next week. Carney has already said he's not worried about the housing market at the moment so I would be very surprised if we saw anything but it is still something to watch.

    Since the results we've had a host of broker updates. Panmure Gordan raised their price target for the 2nd time in three days from 330 to 320 maintaining a hold rating. There were reiterations from Jefferies, JPMorgan and Deutsche Bank. CitiGroup upgraded their price target from 315 to 330 and reiterated a neutral rating. Liberum Capital has upgraded to buy with a new price target of 374 from 358 previously. As a result of the upgrades following the results Barratt has bounced back strongly rising 4.5% today but it and other house builders continue to be incredibly volatile and I expect this to continue.

    The debate is heating up but my original view still holds. As criticism mounts Osborne may look for a way to placate the critics but nothing will really change. Osborne will continue to drive house prices up and Carney will keep interest rates low. The builders will continue to profit.

    Disclosure: I am long OTC:BTDPF, OTC:PSMMF.

    Additional disclosure: I am long london stock exchange equivalents LON:BDEV LON:PSN

    Sep 13 9:21 AM | Link | Comment!
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