Monthly Recap – April 2018

Monthly Recap Image April 2018

March Buys And Sells…

3 purchases this month and a school boy error sale.

Finally decided to pay up for Focusrite (TUNE) after this update on 9-Mar – “Revenue for H1 expected to be over £38m, up from £32.0m LFL, a 25% increase on a constant currency basis. Net cash £19.7m, up from £14.2m on 31 August 2017 and £9.4m on 28 February 2017. Confident for the current financial year and beyond”.

Learning Technologies (LTG) issued a great Trading Update in January but never actually specifically mentioned Profit. On the 19-Mar the results confirmed “Revenue up 85% to £52.1m (£28.3m last time), Adjusted EPS up 74% to 2.064p (1.184p last time), the FY Dividend is up 43% to 0.3p and there’s now Net Cash of £1.0m (-£8.5m last time) – Current trading is ahead of expectations”. Even on a lofty PER of 39.4 I decided to buy in.

I sold out of Quixant (QXT) for a small loss a couple of months ago (almost to the day) as it didn’t seem to be doing much. However, on 22-Mar it reported “Strong revenue growth of 21% to $109.2m (2016: $90.4m), Adjusted Pre Tax Profit up 28% to $17.7m (2016: $13.8m), Fully Diluted EPS of $0.197 (2016: $0.139), Net Cash of $4.5m (2016: -$0.1m). FY Dividend of 2.6p (2016: 2.0p) – The 2018 financial year has started well, giving us confidence that the year will continue to be one of strong growth and now we anticipate delivering growth ahead of our previous expectations”. On a PER of 21 I bought in again about 10% lower than the previous time.

(Overly) Excited about the gaming industry, I actually bought my previous Quixant (QXT) holding mentioned above on the same date I bought into Gfinity (GFIN). The difference, one was actually making money and good money at that, selling physical goods. The latter had never made a profit but looked like it was going to have a huge on-line gaming presence (it may well prove to be the case, but it is not the case at present (nor was it when I bought it but it was saying all the right things)). Whenever I buy a company that’s not yet making a profit it disappoints almost every time. Almost every time I hold a company that falls below my Stop it almost always falls further, much further. With those 2 rules broken, gladly I didn’t break the never average down rule. Sold out at an embarrassing loss and had many words with myself over this one.

Buy Date Stock Code Buy Price Sell Price Sell Date % Movement
9-Mar-18 TUNE 370.00
19-Mar-18 LTG 86.00
22-Mar-18 QXT 391.00
23-Aug-17 GFIN 24.20 10.70 28-Mar-18 -56%
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