I have sold two of my largest holdings in Micro Focus and Burford Capital realising some quite substantial profits. Micro Focus I sold for a 64% profit and Burford for a 137% profit.
I sold Micro Focus because of a somewhat shaky trading update that the HP software (the business Micro Focus is buying) has experienced a 10% decline in licence revenues. Micro Focus said this was ‘disappointing’ but ‘short term’ and said it still expected to meet earnings targets. The market didn’t like it and the shares were sold off quite heavily this morning. I think there is now a reasonably high chance of a profit warning so decided to play it safe and sell (only to watch the share price rebound somewhat). I still like Micro Focus in the longer term so it goes back on the watchlist.
I sold Burford because the share price appears to have lost momentum. There doesn’t appear to be a reason for this but I’m going to put my money elsewhere. I still very much like Burford so it goes back on the watchlist too.
I’ve used the proceeds to top up some of my existing holdings, including Bioventix (to 7.1%), Fevertree (to 5.6%) and Liontrust (to 5.5%). I have decided to hold on to some of cash for a bit to see what opportunities come up.
I’ve now reduced my portfolio to 19 holdings and my plan is to stick to no more than 20. I might try to get more concentrated if the opportunities arise but I’m going to see how it goes.