Shorting would give me the shivers

It’s been very quiet over recent days in regards to my own holdings, with little in the way of company news or share price activity. Remembering the Chinese curse “may you live in interesting times”, I shall not complain.

I did notice that Scapa (SCPA) released a positive trading statement yesterday, and that the share price rose by 11% as a consequence (currently 43p). I have mentioned Scapa in a previous blog as ‘one that got away’. Perhaps I should be kicking myself for not investing at 16p when the company first came to my attention. In a strange sort of way I never get too distressed by these situations because I take a great deal of comfort in the fact that at least my stock picking radar is still working. Anyway there are always plenty of opportunities out there if you keep your eyes open.

Kenmare resources also briefly moved back above 50p in recent days. I noticed in the press that, once again, there is talk of KMR being a possible takeover target. You might remember that I sold shares in Kenmare for over 50p a couple of years or so ago, and then watched as they fell back to 7p, but never bought back in. Curiously one of the reasons I never bought the shares again was that I suddenly got ‘cold feet’ because it is (certainly was) a company dependant on a single mining operation in Mozambique. However, it is this very feature that might make it attractive to potential suitors. Kenmare has been touted as a potential bid target for several years, and my gut feeling is that this will eventually happen at a premium to the current share price. I shall watch with interest and wish shareholders continued success.

One of the Directors at the Mission Marketing group has picked up a few more shares. After releasing its results 31 March, the shares fell back a little from their recent peak. As mentioned before, it’s not really the type of company that interests me for the long term, but if the shares were to fall back further then I would consider revisiting the accounts and outlook, and ponder upon a medium term investment.

Finally, I noticed into today’s Times that Simon Cawkell (Evil Knievel) has a short position in ASOS, a company that I mentioned in my very first blog ‘Magnificent micro-caps’. Over the past couple of days ASOS’s share price has continued to climb on the back of a positive trading update. At the close of play today the shares stood at £20.50. ASOS stands on a very high rating indeed, and I can understand the rationale behind SC’s short position. However, shorting shares has never been an option that I wish to pursue. It strikes me that whilst some shares can look very expensive, they can remain that way for some considerable time, and indeed get even more expensive. ASOS for example stands on a very high p/e ratio, but that hasn’t stopped the share price reaching an all time high in the last two days. Each to their own of course, but betting against a share doesn’t suit my temperament.

I believe SC was also short on Avanti communications. If true, then it appears he is having more success here as the share price continues to slide despite the recent bout of purchases by the Directors

Happy hunting.