600 up more than 200% since its low

As I mentioned last week, one of the columns I like to read in the FT weekend is ‘Trader’s Diary’ by David Schwartz. However, it is rare that Schwartz has ever mentioned a company that I also have an interest in. This week there was a connection though, apparently he holds shares in 600 group which is a company I briefly held in 2004. I remember at the time being attracted by an 8%+ dividend. I held the shares long enough to receive the juicy dividend, but either by luck or judgment I sold the shares shortly afterwards for a slender profit. I’d like to think that it was judgment, but it’s likely to have been a combination of the two! Anyway, the share price fell shortly afterwards and languished at low levels for some considerable time. Subsequently, I didn’t really take much interest in its fortunes.

However, the share price has been recovering from less than 10p in 2009, up to its present value of just over 30p. Schwartz believes that there is far more upside to come. His argument is very persuasive, so I’ve just had a quick look at the half-yearly results and balance sheet. From a cursory glance it does look to represent good value. It appears to be currently valued at about £16m with a net tangible asset value of £21m. The results at half way do look encouraging, as does the outlook statement. My only concern would be that there appears to be less than £0.5m cash.

When I visited the 600 Group BB, the last post was March 19^th. I like quiet BBs it often means that the shares have been overlooked, although of course it could be for good reason. Not in this case though I suspect, probably just unfashionable (another good sign).

What did make me laugh is that Cockney Rebel was amongst the last few posters. Over the years, it’s amazing how often CR and I end up looking at the same companies! We’re either making good choices or alternatively making the same mistakes. Touch wood, I think it’s been the former rather than the latter.

I would point out that it is not my intention to purchase shares in 600 Group, but I would research the company more thoroughly if I was looking for bargains at present.

The ‘My Portfolio’ section of the FT was written by John Lee this week. I would describe John Lee as a medium/long term value investor, and occasionally I have held one or two of the same stocks.

One of the stocks John Lee and I have both held is Clarkson the shipping company. I bought shares in Clarkson in 2002 for about £2 with a 7%+ dividend attached. The share price did initially fall back to £1.40ish I seem to remember, but Clarkson continued to pay the dividend, and I patiently held. I did eventually sell them for a very good profit, but in hindsight I should have held on further. Clarkson’s shares are now about £13, and I believe that they have had a progressive dividend policy. John Lee may still be a holder, although I have no idea since he hasn’t mentioned them in his column recently.

If any of you have read my blog on a regular basis (and many thanks if you have) then you will understand why I tend to hold shares for longer than I did when I first became interested in stock picking. One of my rules is buy as cheaply as you can then hold on tightly unless the story (big picture) changes. It’s incredible how many potential multi-baggers are out there if you just catch them at the right time.