Billion dollar Boom?

Not much news to report from my current share portfolio this week, although there was an interesting RNS from an indirect holding.

As previously reported, I hold shares in a company called UBC Media which will change it's name on Tuesday as it reverses in it's recent acquisition 7Digital. The enlarged group will hold 20% of Audioboom, a recently floated (by reverse takeover) social media site that describes itself as the audio equivalent of YouTube.

The RNS announces that CBS Radio Limited ("CBS") and Sky Sports Limited ("Sky Sports") have agreed to become major new content partners on Audioboom's social media platform.

This potentially sounds very exciting.

Rob Proctor, CEO of Audioboom, commented, "CBS and Sky Sports are two of the world's biggest broadcasters and we are delighted they are using our technology and platform to further utilise and share their wonderful audio content. They are two of the most significant channel partners we have signed and are a great boost to the expansion of our sport and entertainment vertical audio markets.
"CBS also gives us fantastic reach and exposure in America which is a key and rapidly expanding market for us. Agreements with world class companies such as these illustrate the potential global reach of Audioboom as it continues to build momentum and become a major social media company."

It's very early days for Audioboom, and make no mistake this is a highly speculative investment in a company that will report negligible revenues in 2014, however, given the lofty valuations of successful social media sites, and the potential to be acquired by a major player (e.g. Twitter, Facebook etc.) then success could easily mean a $1bn plus valuation, and a hefty windfall for 7digital.

Whilst both 7Digital and Audioboom are highly speculative, they are also operating in an exciting and potentially very lucrative space. I don't directly hold shares in Audioboom, but I do like the fact that through 7Digital I will have a finger in both pies.

It would be fantastic if one or preferably both companies blossom, although I am mindful of the possibility that neither may prosper. It will be interesting (and hopefully lucrative) to watch developments over the medium and long term.

On a separate note, my virtual trade in Vesuvius is pretty much flat so far, although I notice that Directors are still keen buyers with a further purchase reported on Friday, and a small tick up of around 3% in the share price.

I am adding Vodafone and Morrison to my virtual trading portfolio. Vodafone is yielding over 5% and is off it's recent highs as investors "park" there special dividends elsewhere. My buying price for Vodafone is 207p. Morrison's I mentioned in my blog 31 May. Just to emphasise that these are all virtual trades, and I'm doing this just for a bit of fun. Of course I will continue to report on my actual holdings and purchases at regular intervals as usual.

Virtual portfolio                 Price paid                      Current  price               Price sold

Vesuvius                            £4.57                             £4.58
Vodafone                           £2.07                             £2.07
Morrison                            £1.93                             £1.93

                                                                 

Vesuvius - set to erupt?

Regular readers of my blog will know that my investing style is to try and find interesting companies at what I perceive to be bargain basement prices, and then hold for the long term in the hope that the share price multi-bags. I have been very fortunate to have had a number of successes, and I hope there will be many more to come in future.

However, just for a bit of fun, I've decided to try some virtual trading. I intend to report on my virtual trades via this blog to see if I'm any good at it. I don't intend to move away from my long term buy and hold strategy because it has worked well for me so far. In the distant past, I have found it to be very frustrating after thoroughly researching a small/micro-cap company only to watch as the company's share price multi-bags (long term) when you thought how clever you were selling it earlier to realise a (mere) double digit gain.  As mentioned yesterday, my mantra is if the story remains in tact, and the company is growing at an acceptable rate, then just buy at a good price and hold (I would add top-up on the dips when Mr Market turns miserable and throws the baby out with the bathwater!!). What is it that Warren Buffett says? Our favourite holding period is forever (or words to that effect).

Anyway, here goes, my first trade is to buy shares in a company called Vesuvius at £4.57.  Please note that I haven't researched this company in any depth. What I do know is that the company was originally part of Cookson group until relatively recently. The company demerged with it's spin-off called Alent group.

Vesuvius is a global leader in metal flow engineering, developing, manufacturing and marketing mission-critical ceramic consumable products and systems to demanding applications, primarily in the global steel and foundry industries. Vesuvius also supplies fabricated precious metals to the jewellery industry in Europe and has significant precious metals recycling operations.

Why the trade? Firstly the share price is off it's recent highs of £5+, Directors have been recent purchasers of the shares (not insubstantial amounts), the company pays a dividend of over 3% (easily covered by earnings), it boasts a single digit p/e ratio, and doesn't have much interest on the BBs.

Whilst their interim management statement wasn't exactly inspiring, investors might have missed the fact that margins have improved and management are confident in meeting expectations for the full year.

In addition, Peter Lynch likes "spin-offs". He says:- "Spinoffs of divisions or parts of companies into separate, freestanding entities often result in astoundingly lucrative investments."

I'll let you know when I make a virtual sale, and keep you updated with my virtual trading activity.

Nothing to lose, or indeed nothing to gain.