Adding Armour to the value portfolio
On January 6th I put 4% of the UKVI ‘aggressive’ fund (aggressive being a new term outlined here) into Armour Group at 7.46 pence. The 4% came from existing cash from the sale of Victoria. At the time Armour came top of the UKVI valuation table, with a ‘returns yield’ of about 40% and according to their web site “Armour Group is the UK’s leading consumer electronics group within the home and in-car communication and entertainment markets”.
The company trades on the AIM index, which I’m not so keen on as they have live outside of the tax haven of an ISA wrapper, so it’s not for those investors who only have money in an ISA, but I have a little bit outside the wrapper so that’s okay.
The key data are as follows:
ROE10 = 9.2%, ROE5 = 7.5%, ROE3 = 5%, P/B = 0.18, market cap = 5.3M
As is typical of many value investments, the trend in earnings is downward, but that’s fine as earnings mean reversion is one of the main causes of share mispricing. Typically companies rebound faster and better than expected.
This leaves my cash position at about 14% which is spot on the current cash target. The cash target for the ‘aggressive’ portfolio being half that used in the ‘defensive’ portfolio described in detail here.
As ever, please check out the trades, portfolio and performance pages.
I’ve also added a new page for the new soon to be up and running Trade Alert membership service, which will allow interested parties to ‘mirror’ my trades.
