Dip, Ship, Travel: My UK Portfolio Postcovid

James Morton has invested for years through his possession of ISA. He is primarily investing in funds and has reasonable performance but is looking for more growth opportunities to increase overall returns.

James, an IT analyst, said he saw an opportunity to invest when stock prices fell sharply in March 2020.

“I’ve been reading about investing in the last few years. Obviously, some people can make a lot of money by helping early, very successful companies. But investing in startups in both companies. As someone who isn’t particularly involved in, these are hard to find opportunities. ”

“If you can be nervous about buying when others seem to be selling, a downturn in the stock market can be a good investment opportunity. Of course, choosing a stock that will recover in the long run It’s a challenge. “

Fine Foam Pharmaceutical

James did not describe himself as a “natural” stock picker, so he chose to diversify by investing in a wide range of companies. “One of the things I’ve learned over the years is not putting all the eggs in one basket,” he says.

He says he focused on several sectors that were particularly badly hit by Covid-19, including companies in the travel and leisure industries. These include airlines, cruise operators and hotel chains. He has also invested in pharmaceuticals, IT, computing, defense and engineering.

Not everything has recovered, but he points out that he holds shares for a relatively short period of time. “I’m not trying to turn these stocks around as quickly as traders do one day,” he says.

One of his better holdings is the pharmaceutical giant GlaxoSmithKline (GSK), The stock price plummeted in March 2020. After the first recovery, it continued to fall in 2020, reaching a much worse than the initial fall.

But since then it has begun to rebound and is now significantly higher than the price James bought and not far from the 2020 peak before the Covid-19 crash at 1,715p (the price as of May 19 is correct). )is. ..

Morningstar analysts have given the share a four-star rating, noting that it is still below the “fair value estimate” of 2,050p. As one of the largest pharmaceutical companies, we have an innovative new product lineup and an extensive list of patent-protected medicines. Both mean that the company has a broad economic moat and protects the company from the products of its competitors. According to Morningstar data, it is also a trusted dividend payer and currently has a yield of 4.48%.

Portfolio disruption

James is listed on the FTSE Games Workshop (GAW). The inventor of Warhammer manufactures in the UK but sells its products globally.

Games Workshop’s share has increased significantly since early 2017 and has followed a strong growth trajectory in 2018 and 2019. After the market turmoil in early 2020, this increase continued until market share peaked at 11,780p in August 2021.

Since then, it has been declining and the company’s stock is currently trading at around 7100p. Stocks currently generate about 2.76%. Over the past five years, shareholders have seen 52.63% of total annual earnings. However, year-over-year shareholders see an annual loss of 31.5%.

James says he is still in a positive territory with this stake. At least so far, his investment in the travel sector has not been very successful. He is the Consolidated Airlines Group (IAG), Its stock price plummeted during the pandemic and has not yet recovered in a meaningful way.

Equities are now below the levels seen at the end of March 2020, according to Morningstar data, and a stock market crash is imminent. Year-over-year investors see a total loss of 34.46% — shareholders also see losses in both the 3-year and 5-year timeframes.

But nevertheless, Morningstar analysts say the company may offer better returns in the future. It has a five-star rating, reflecting the fact that it is trading well below the “Fair Value Estimate”.

Our analysts have also achieved industry-leading margins and return on investment as this group is the highest quality of European legacy airlines and focuses on fleet efficiency and cost control. I’m observing that. The group has gained the flexibility to survive the crisis by plunging into a coronavirus pandemic in a financially better condition than its peers.

“We believe the group can take advantage of the recession to drive more cost efficiency and drive 3.5% annual EBIT growth from pre-coronavirus levels in 2019 to 2026,” they say.

Stable hands

A photo similar to James’ investment in Carnival (CCL), One of the largest operators in the cruise ship industry. Again, this is a 5-star rating, reflecting the fact that the share is well below pre-Covid-19 levels. Since then, there has been a moderate recovery.

Morningstar points out that this is a company with high stock price uncertainty and no economic moat. He added that the decline in travel could lead to long-term “long-term changes” in consumer behavior, challenging the economic performance of already vulnerable businesses.

James said he expected the stock to rise faster, but feels it will continue to be a good play in the long run.

“Many of my parents’ friends are enthusiastic about cruises and will pay a fair amount of money. Many people haven’t been on vacation for years, but this year more people book their trips. You can see it, “he says.

“The cost of living crisis could limit spending on vacations and cruise trips within the next two years, but I don’t think this will be a permanent change. Those who have money There are many. Have fun. I don’t think this will change radically. “

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Dip, Ship, Travel: My UK Portfolio Postcovid

Source link Dip, Ship, Travel: My UK Portfolio Postcovid

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