Shares to buy, hold and sell: Marina Bond
Bond has 10 years' experience of analysing small and mid-cap companies and previously ran the Rathbone Smaller Companies fund.
Here are the latest stocks she has bought and sold and the one she's holding on to.
This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.
BUY: GB GROUP
"GB Group specialises in identity management services for companies. Originally it focused on verifying customers' identities remotely, but it now provides additional services to help its customers develop their relationships with clients. The group is paid per click and is cheaper than a manual identity check. It also charges an annual licence fee for its software.
"Despite a recent strong run, GB is still a good buy. I bought it on the strength of its management team, having previously successfully backed them at another company. I tend to follow the management teams, particularly on this fund because I am looking for recovery situations and it requires a good team to turn a company around.
"Overall, GB Group is conservatively managed and I feel very comfortable that it can still produce margins and generate cash in quite difficult environments. The company is not well researched by analysts or well-known by investors. It is off-the-radar and as such, the valuation still looks good."
HOLD: WILLIAM SINCLAIR
"This is perhaps a less exciting share, but it is certainly one that I plan to hold for a long time. Again, it is not well-researched by analysts or investors. William Sinclair produces peat and other types of 'growing media'. It sells into the retail garden sector, which has proved incredibly resilient during the recent downturn and has continued to benefit from the ageing population. The sector is seeing growth of between 2 and 4%, which is not spectacular, but is certainly enough to be supportive for companies.
"I like companies like this – I believe that this is the type of company where I can really find value. New management came into the company about three years ago and made a number of changes. They sold off some low-margin export businesses and introduced better account management. It was all common sense, but has given the business a welcome boost.
"The company has also started developing non-peat growing materials as the management believes that the peat industry may – and should – be regulated at some point in the future. The firm's market share in this new product is now around 35% and growing.
"In our fund, we make sure we pick stocks that are at different stages of their recovery process. Having all early-stage companies would be too risky, while having too many late-stage companies wouldn't deliver the same returns. In the case of William Sinclair, the new management came in around three years ago and the group is already well on the road to recovery."
"Cruise group Carnival owns the ill-fated Costa Concordia and Costa Allegra liners. Its shares sold off significantly after the dreadful accident off the island of Giglio that caused the Concordia to sink. A lot of people have been saying that this might represent a buying opportunity for Carnival shares, but I have sold out.
"I had been holding Carnival because it is tied into the US economy and the recovery that is going on there. It had done well, but I have a strict sell discipline on this fund. If something goes wrong – a profi ts warning, or a weakening of a company's cash position – I automatically sell. In this case, I don't yet know what went wrong but I do know that the management will have a lot to deal with over the next few months.
"It is not just dealing with the incidents themselves, but there are likely to be future court cases and compensation and as such, the problems are diffi cult to quantify. I am always looking for a company with a trigger to improve, rather than the other way round. At some point, I may move back into it, but now is not the right time."
A catch-all phrase that can range from assessing the price of a property or vehicle before offering it for sale or the net worth of assets in an investment portfolio to the prices of shares on a stock exchange.