PMP bought

Another so-so slightly disappointing week for my portfolio. As I had hoped, there was a positive trading update from one of my largest positions, JD Sports, but the reaction to it has been pretty muted. My portfolio hasn’t progressed much for the past three months or so and I’ve been trading quite a bit more than I would like as momentum has often been faltering.  This is making me more bearish about the markets in general. I’m going to do a bit of thinking about how to anticipate and react to a market correction and will write about it in a later post. In the meantime I’m going to try to let my cash balance drift up a bit and restrain myself from over-trading.This week I sold out of Boohoo for a 14% loss as the share price continued to struggle to make any headway following last week’s very positive trading update. There is clearly a lot of supply in the market, likely from large institutions selling, so it seemed prudent to offload it now and wait for a better opportunity. It had fallen below my stop loss so I shouldn’t be trying to make exceptions.

I also sold out of Facebook for an 8% loss, following Mark Zuckerberg’s announcement that it would be changing its newsfeed algorithm to prioritise posts over friends and families over news and brands. This has created some uncertainty and the shares sold off a bit as a result. I sold as the momentum deteriorated though a pretty rapid decline in the dollar was responsible for most of my loss. All my US holdings have taken quite a significant hit from this (5% or so o average), though most are holding up well as the market there has continued to perform very bullishly. It’s definitely starting to feel quite euphoric in the US markets at the moment – another reason I’ve started to feel more bearish.

On a more positive note, I sold out of my largest position Craneware for a 55% profit. I like the business and it’s doing very well, but I was starting to struggle to justify the valuation, even with quite generous assumptions for further growth. I was also swayed by the illiquidity of the shares, which would be difficult to sell in a market downturn.

These sales raised quite a lot of cash in the portfolio. I’m not in a rush to reinvest it all though I spent a bit of it on Portmeirion, following a good trading update.



Portmeirion makes pottery and owns a few high end brands, including the fairly well-known Spode brand. Portmeirion is a fairly high quality business but pretty far from the highest on my watchlist. My decision to buy now is primarily driven by the low valuation and the recovery in trading momentum. It is a bit different to the higher momentum opportunities I would typically go for, and is an attempt to diversify my portfolio a little from higher-rated growth stocks to cheaper stocks.


  • Business economics: Making pottery does require some capital investment and every few years Portmeirion spends quite a bit on capital investment. It has decent margins and returns on capital. For the last few years Portmeirion has been throwing off a lot of cash and it has little debt.
  • Track record: Portmeirion has grown profits steadily but not spectacularly over the last few years. Recently it has had some issues with trading in certain geographies, particularly in South Korea, though this now seems to be recovering.
  • Competitive advantage: the competitive advantage comes mainly from Portmeirion’s range of luxury brands. It’s not clear that the brands command the strongest of competitive advantages though they seem to allow Portmeirion decent margins. I think the market for higher quality crockery is likely to be fairly niche and stable, so the risk of competition eroding profits is unlikely to be that high.
  • Growth prospects: I think Portmeirion has good growth prospects. In particular, it has a lot of opportunity for further international expansion. It is currently growing at a fast rate in many of its export markets, including the US.


The main factor drawing me to Portmeirion is the valuation, which seems very cheap for a fairly high quality growing business. Trading momentum seems to be recovering, with sales growth accelerating in the most recent half and Portmeirion guiding modestly ahead of previous expectations for the year just past and putting out a rosy outlook statement. The share price has been stagnating for more than a year since its profit warning but is now showing signs of recovery along with the share price.


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