Direct Line Group shareholders will be pleased this morning. The Group released a solid set of half year results, and declared another special dividend alongside a 5% hike in the usual payout. In total shareholders will receive 14.4p (about 5% of the current share price). It looks like they are making a habit of this, and long may it continue. If you are looking at a dependable income stock then DLG should be right up there as a main contender.
As a shareholder in Trakm8, I was also interested to ascertain any snippets of information that related to their Telematics contract with the Group. The key snippets are these:-
"Our performance has also allowed us to continue to invest in the future of our business, to enhance our product propositions and improve our customer experience. We have rolled out self-install telematics boxes, which will enable us to reward better driving, and we've made it easier to buy our Motor products on smartphones and tablets."
"Distribution - In April, the Group launched its self-install telematics proposition in the UK following a successful pilot. This supports the Group's strategic aim of being a leading operator in developing the telematics market and enables it to offer telematics to a broader range of customers. Take-up remains strong for Direct Line new policies with one in five under 25 year olds electing for telematics, with take-up increasing to more than 50% for new business sales to under 21 year olds over the phone."
"In addition, the Group continued to improve its pricing sophistication for renewing telematics policies and announced an equity investment in The Floow, the supplier of smartphone applications and telematics data analytics for the Direct Line DrivePlus telematics product range."
"Furthermore, the Commercial division is piloting telematics propositions with Direct Line for Business and NIG customers."
It's also interesting that Trakm8 are working closely alongside the Floow on developing the Telematics for Direct Line. I wonder if this tie up will extend to other clients?
I notice that the Floow have been working with AIG, Accenture and a South African company called Tracker in the past 18 months. Trakm8 in turn would bring Eon, St Gobain, the AA, Fujitsu and Kubota to the party.
A strategic partnership between the two with this list a major clients would be interesting to say the least.
The Floow's comments on Accenture are intriguing:- "Accenture is a global powerhouse in many areas of technology consulting, including advising the world's top insurers on new technology and science. We created a Telematics Pilot that is being run in North America and this will form the basis to many products from Accenture, watch this space!"
Friday, 1 August 2014
Wednesday, 30 July 2014
Addition to the virtual trading portfolio
Rightmove released their first half trading results this morning. The highlights include a 20% hike in revenues, underlying operating margins of 74%, underlying earnings up 24% and a 18% dividend hike. Great results, but on all fundamental values the shares look expensive. On last years figures they currently trade on a p/e above 30 with a market cap. approaching £2.3bn and the dividend yield is not much more than 1%.
I couldn't justify paying this price for my own long term portfolio, although I greatly regret not buying them in the depths of the financial crisis when they were less than a fiver. This is surely a Warren Buffet stock. The company boasts an invisible moat, a virtual monopoly in the UK. What's the first website you'd visit if you're looking to buy a property? It's got to be Rightmove.
The company's model ensures outstanding gross margins, it generates copious amounts of cash and has a history of hiking the dividend payment each year. In fact the dividend was held even between 2009-2010.
So whilst I'm not a real buyer (I don't believe that it will multibag in the near future from here), I'm going to add it to the virtual trading portfolio believing that it can surpass the previous highs of this year. As I write the price is £22.96.
Virtual portfolio Price paid Current price Price sold
Vesuvius £4.57 £4.66
Vodafone £2.07 £2.04
Morrison £1.93 £1.73
Rightmove £22.96 £22.96
I don't think it's likely that there will be an opportunity to buy the shares and add them to my real portfolio at the bargain basement price which arose in 2009, but should the opportunity ever present itself when the shares once again look cheap then I'll more than likely snap them up, despite preferring to concentrate my efforts on the small/micro cap sector.
I couldn't justify paying this price for my own long term portfolio, although I greatly regret not buying them in the depths of the financial crisis when they were less than a fiver. This is surely a Warren Buffet stock. The company boasts an invisible moat, a virtual monopoly in the UK. What's the first website you'd visit if you're looking to buy a property? It's got to be Rightmove.
The company's model ensures outstanding gross margins, it generates copious amounts of cash and has a history of hiking the dividend payment each year. In fact the dividend was held even between 2009-2010.
So whilst I'm not a real buyer (I don't believe that it will multibag in the near future from here), I'm going to add it to the virtual trading portfolio believing that it can surpass the previous highs of this year. As I write the price is £22.96.
Virtual portfolio Price paid Current price Price sold
Vesuvius £4.57 £4.66
Vodafone £2.07 £2.04
Morrison £1.93 £1.73
Rightmove £22.96 £22.96
I don't think it's likely that there will be an opportunity to buy the shares and add them to my real portfolio at the bargain basement price which arose in 2009, but should the opportunity ever present itself when the shares once again look cheap then I'll more than likely snap them up, despite preferring to concentrate my efforts on the small/micro cap sector.
Tuesday, 29 July 2014
Virtual trading portfolio update
Some of you may remember that I started a virtual trading portfolio in early June. This was just for a bit of fun, but I thought I'd revisit it this morning to see how it's going so far. This is what I said back in June:-
"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"
Well what's happened since? Not a lot really. The current state of play is given below:-
Virtual portfolio Price paid Current price Price sold
Vesuvius £4.57 £4.59
Vodafone £2.07 £2.02
Morrison £1.93 £1.72
As you can see, both my virtual trades in vod and vsvs are pretty flat and mrw is down. Hopefully today's news from mrw about the appointment of Andy Higginson may provide a fillip for the share price.
As a measure of my success, I am going to assume that I have invested £1000 in each initially. My budget will be £10,000 to start with, and I am going to set a 3 month time limit as my maximum holding period for each share I purchase.
Those of you who read the blog on a regular basis will know that this is not my actual investing style. I try to find small/micro cap companies that I perceive to be undervalued and then hold for the long term. The virtual portfolio requires a totally different mindset, and I'll need to be a little more reactive to news stories and sentiment with my future trades.
"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"
Well what's happened since? Not a lot really. The current state of play is given below:-
Virtual portfolio Price paid Current price Price sold
Vesuvius £4.57 £4.59
Vodafone £2.07 £2.02
Morrison £1.93 £1.72
As you can see, both my virtual trades in vod and vsvs are pretty flat and mrw is down. Hopefully today's news from mrw about the appointment of Andy Higginson may provide a fillip for the share price.
As a measure of my success, I am going to assume that I have invested £1000 in each initially. My budget will be £10,000 to start with, and I am going to set a 3 month time limit as my maximum holding period for each share I purchase.
Those of you who read the blog on a regular basis will know that this is not my actual investing style. I try to find small/micro cap companies that I perceive to be undervalued and then hold for the long term. The virtual portfolio requires a totally different mindset, and I'll need to be a little more reactive to news stories and sentiment with my future trades.
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