The low p/e, small cap., high yielders vs. FTSE all-share

In January I started a study to see how a small portfolio of low p/e, small cap., high yielders would perform against the FTSE all-share index. The nine selected shares are listed in the link below:-

http://michae1mouse.blogspot.co.uk/search?updated-max=2014-01-06T12:56:00-08:00&max-results=3&start=12&by-date=false

Whilst I don't own shares in any of the nine companies, I did make some initial observations after some cursory research which can be seen in subsequent blogs:-

http://michae1mouse.blogspot.co.uk/2014/01/21st-century-technology-plc.html

http://michae1mouse.blogspot.co.uk/2014/01/fairpoint-and-h-group.html

http://michae1mouse.blogspot.co.uk/2014/01/ms-international-and-hydro-international.html

http://michae1mouse.blogspot.co.uk/2014/02/quarto-group-tandem-and-walker-crips.html

So how is this portfolio performing so far? Well whilst the FTSE-all share has fallen from 3605 to 3554, a 2.3% decline, the value portfolio has got off to a flying start, and is up 10.1% for the year to date. In fact just three of the selections are showing a loss whilst the other six have made impressive gains.

The star performer is Tandem with a gain of 40%. This has been driven by the release of better than anticipated end of year results and a positive outlook. Whilst revenues and EPS were down on last year, as expected, the dividend payment has been hiked by 4.5% and they state that revenue for the first quarter is well ahead of the corresponding period in the prior year.

The next best performer is MS International with a 16.1% gain. I can't see any specific company news to have driven the share price forward, but there have been some confidence boosting Director purchases.

Fairpoint has currently recorded a gain of 15%. Fairpoint recently released a good set of prelims. where, although revenues were slightly down, adjusted EPS had improved, they reported strong cash flow and improved the dividend pay-out by 9%.

An encouraging trading statement from Walker Crips has driven the share price 13.4% higher and Director purchases appear to have added to the growing confidence.

H&T has gained a respectable 9%. This was even better until recently when an expected bargain basement purchase of certain assets from Albermarle and Bond fell through. H&T also released their final results where they reported on a challenging year with EPS falling 63% and a reduced dividend (60%) to 4.8p. More positively, net debt had been reduced by 25% to £20.7m.

Quarto Group recorded a more modest gain of 4.6%. Following a challenging year, the group appears more confident about the outlook, they remain focussed on debt reduction, maintained a generous dividend and have recently entered into a joint venture with a Brazilian distributor.

Bisichi Mining is little changed with no notable news flow.

Hydro International is down 4% following final results where EPS halved to 5.15p. They predict a difficult year in 2014, although the dividend was maintained and longer term the management appear confident about the growth prospects.

Finally, the worst performer to date is 21st Century Technology which has lost 12%. Whilst there has been no new news, it appears that the value investor Peter Gyllenhammar has been unwinding his significant percentage holding in the company. The share price has risen a little in the past week or so following his disposal.

It's early days yet, and I'll try to revisit the performance of the portfolio on a fairly regular basis, but certainly it's got off to a flying start in 2014.