21 Holdings: a sorry tale for investors

As part of my due diligence on another potential investment, I recently came across 21 Holdings (ticker: 1003.HK), a Hong Kong-listed holding company with a market cap of only HK$205m. This has proved to be a truly terrible investment over the last few years: a story of repeated, dilutive equity issues, share consolidations and dubious acquisitions: 100,000 shares at the end of 2007 have now been consolidated to a single share. During the last six years, the company has raised over HK$800m through numerous equity issues and spent around HK$600m, on what have proved largely worthless acquisitions.

Hopewell Holdings (54 HK) research

After recently initiating a position in Hopewell Holdings (ticker: 54 HK), I have also published a detailed research piece on the company on Seeking Alpha – Hopewell Holdings: Value and Growth. If you’re interested, check it out now, as it’s only available to non-paying subscribers for a few weeks.

NEW BUY: Hopewell Holdings (54 HK)

Earlier this week I initiated a position in Hopewell Holdings (ticker: 54 HK), a Hong Kong-listed property and holding company, at an average share price of around HK$25.60. The shareholding represents just under 3% of my portfolio.

Jardine Matheson (JM SP) research

I have written a research piece on Jardine Matheson and Jardine Strategic, which has been published on Seeking Alpha – Jardine Matheson: High Quality At A Low Price. These have been long-term holdings of mine.

BUY – ADDITION: Aurora Investment Trust (ARR)

I’ve just added to my position in  Aurora Investment Trust (ticker: ARR), buying at 154p, which represents a discount of around 17% to NAV. This is now the largest position in my portfolio at over 8%. I think it is almost certain that the trust will be wound up in the next 6 months or so; with potential upside of 15-20%.

Great Eagle Holdings (41 HK) research

I have recently produced a detailed research piece on Great Eagle (ticker: 41 HK), which has been published on Seeking Alpha – Great Eagle: A Bargain at Half Its SOTP Valuation. At the current share price, I think the shares are a genuine bargain.

SELL: European Investment Trust (EUT)

In the last couple of days, I have sold my entire shareholding in The European Investment Trust (ticker: EUT) at an average price of 738p. This was a major part of my portfolio. I bought an initial position back in 2010 and had added to it since, most recently in October last year when the discount widened to around 17%. The shares have performed very well since then: the NAV has increased by 30%, whilst a narrowing of the discount means that the share price has increased by 43%. I sold because the current discount at around 8% is right at the bottom of the range in which it has moved in the last few years.

SELL: North Atlantic Smaller Companies IT (NAS)

I have sold my shareholding in North Atlantic Smaller Companies IT (ticker: NAS) at price of 1542p, almost exactly a year after buying it. During this period the trust’s NAV has increased by 26%; however, a significant narrowing of the discount to around 17% means that my return has been 36%.

SELL: Vodafone (VOD)

Having recently written about Vodafone after the announcement of the Verizon Wireless transaction (see here), I recently sold my entire shareholding at a price of around 219p. I had bought the shares in mid-2012 mainly because of the potential value that would be unlocked by such a transaction. Since then the shares moved sideways for the best part of two years, and have only increased decisively over the last six months, as the likelihood of a deal with Verizon increased. The overall return during this period, including the generous dividends, has been good. Arguably, Vodafone remains undervalued; nonetheless, given that the main reason for buying no longer exists, I decided to sell.

Performance update: year to end August 2013

It is now a year since I have been following the Discount Investing strategy; or, more accurately, since I have been consistently measuring the investment returns from it. In the past 12 months, my portfolio has returned nearly 25% (in pounds sterling), more than 5 percentage points ahead of the benchmark, the FTSE All-World Total Return Index (also in pounds sterling), which has returned just over 19%.