Mark Watson-Mitchell’s COVID-19 Recovery Portfolio: An update

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Mark Watson-Mitchell’s COVID-19 Recovery Portfolio: An update

Mark Watson-Mitchell provides his readers with an update on the performance of his COVID-19 Recovery Portfolio. 

On Tuesday 24 March I wrote that several people had asked me which companies I would select for fresh investment, seeking a good recovery bounce before the year end.

Accordingly, I compiled a quick hit list of ten stocks – my CV19 Market Recovery Portfolio.

Since that date the selections have progressed very well – showing a handsome 48.35% advance in less than three months.

In the same intervening period, the FTSE100 has gained 16.22%.

So today I give below my update views on the Portfolio constituents.

Billington Holdings (LON:BILN) @ 242p now 314p +29.72% – designer, manufacturer and installer of structural steelwork

The shares have been up to 340p since the portfolio started; however, they have since eased back somewhat.

The recently announced 2019 results were extremely good, but the group has subsequently been impacted by Covid-19. Its fabrication facilities are all working at full capacity, it has a strong balance sheet and it has reorganised itself to cope with the current crisis.

Hopefully, we will not have to wait until the September interims to find out exactly how the company is trading currently.

The shares, which topped out at 450p in late February this year, could well move back up again to their recent peak.

Capital Drilling (LON:CAPD) @ 34.5p now 63.5p +84.06% – drilling and mining services contractor mainly into Africa

The group’s AGM is being held tomorrow, so we can look forward to a constructively bullish statement on current-year trading.

The shares have put in a very good recovery performance, hitting 70p at one stage a couple of weeks ago.

The strength of gold at the higher levels encourages expectations that the group will pick up more longer-term contracts in due course.

The shares continue to have strong attractions.

Finsbury Food Group (LON:FIF) @ 55p now 65p +18.18% – cakes, bread, bakery snacks manufacturer

Frankly this has been a disappointing performer, even though it is now up over 16% since inception.

We should be getting a pre-close trading update within the next month or so.

However, the shares at just 65p may well hold at around this level for some weeks yet.

Inland Homes (LON:INL) @ 41p now 53.5p +30.49% – residential and mixed developer of brownfield and strategic land

The group’s interim results are due within the next couple of weeks or thereabouts.

Upon the lockdown it was hit with its sales offices being closed and a number of transactions being suspended.

The sites are now back open again and the group has been bolstered by a placing and subscription of 18.33m new shares @ 47.5p each, raising a gross £9.9m in the process.

Now the shares look to resume their previous upwards path and remain a strong hold.

MPAC Group (LON:MPAC) @ 185p now 235p +27.03% – packaging machines for FMCG, healthcare and pharmaceutical sectors

Despite its near 30% improvement this group’s shares are looking undervalued currently. There is a trading update due to be announced in mid to late July.

Obviously with operations in China it will have endured some Covid-19 hassles, but the basis of its global business is helping manufacturers get even more efficient in their processes.

That will mean more business, if not now, then very soon.

The group has a strong balance sheet, is well financed and has plenty of headroom in uncommitted facilities.

At the current 240p the shares have a lot of headroom as well and are going higher.

Ramsdens Holdings (LON:RFX) @ 85p now 155p +82.35% – foreign currency, pawnbroking, precious metals and retail jeweller

I am looking forward to the group holding its AGM on 6 July, hoping for a bullish trading statement for the balance of this current year to end-March 2021.

It will have been impacted by the virus, but it is supported by its strong balance sheet, its good cash position and, if required, the ability to turn its jewellery stock into cash.

I remain a fan of the company and rate its shares as an excellent recovery stock.

Rank Group (LON:RNK) @ 97p now 168.5p +73.71% – operates gaming services, Grosvenor Casinos, Mecca and Enracha

The group’s online operations must have seen a big uplift during lockdown.

However, the closure of its venues will have been very impactful, both in the UK and internationally.

The question is whether we will see a pre-close trading update ahead of its June year-end.

The shares are not for chasing until more is known on just how the group is faring currently.

Strix Group (LON:KETL) @ 122p now 194.4p +59.34% – market leader in kettle safety controls and hot water on demand products

Well it looks as though the new factory in China is still progressing according to plan, with the building being finished next January and going into production in August next year.

The group has made a solid start to the current year and has reorganised its finance facilities to not only go through the virus period but also to invest in its future growth.

In just over a month we should see just how the group is trading when the company announced its first-half trading update.

The shares are a strong hold.

Sureserve Group (LON:SUR) @ 31p now 46.5p +50.00% – compliance, energy services, property services and construction

The end-May reported interim results to end-March showed a strong 129% profits advance on just a 7% revenue improvement. Net debt was down impressively whilst its order book gives a 90% visibility in the year’s balance.

There is still a lot more to go for with this very well-managed little group.

Its shares appear to have further to climb.

TClarke (LON:CTO) @ 71p now 109.75p +54.58% – electrical, mechanical and ICT services provider

This group’s shares have been creeping better in the last few weeks.

It holds its AGM on 24 June and all of its sites should be in operation within weeks.

Its order book was some £408m a fortnight ago so the balance of 2020 looks good business-wise.

The AGM trading update statement is eagerly awaited.

Click here to see the original COVID-19 portfolio piece.

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