Shares to buy, hold and sell: Paul Marriage

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.


"This is the UK's leading machine-gun manufacturer. We bought it at its initial stockmarket flotation in December and have bought more since.

It's a tiny company which launched with a market capitalisation of just £12 million, but we're happy to invest in a range of companies from the very small up to around £1 billion in size.

Manroy fulfilled our three main criteria for investment in a company: it has market leadership, an ability to grow its margins and generate cash, plus its management own the shares. Around 70% to 80% of the stocks in our portfolio will fulfil these criteria.

It came to market at a low valuation. Also, while it's new to the stockmarket, it's been around a long time as a private company and has a strong track record.

The company has contracts globally, but the Ministry of Defence (MoD) is clearly an important customer as ensuring that British troops are equipped with £15,000 machine guns is a basic requirement.

The shares have moved up from 75p to £1.70 in the short time we've held them, and we believe they are still very cheap. It's a really interesting little company that's winning plenty of new contracts and we're going to continue holding it."


"We bought Andor 18 months ago. It makes specialist digital cameras, but not the sort consumers would buy. Instead, these are used inside laboratories and cost thousands of pounds. They are very high-end.

This is a really innovative company: it does lots of research and development and has made a couple of interesting acquisitions in sensible areas that match its existing business well.

The company sells its cameras globally. We don't consciously look for non-UK earnings - we hold Booker, for example, which has 100% UK earnings and we're very happy with it - but around 40% of the earnings from our companies are in the UK, with the remainder (one third each) in Asia, the US and Europe, so we have quite an international portfolio.

Andor has seen strong share price performance and is now trading at four times its level at the start of 2009. It has met market expectations on earnings and profitability, and has also managed to reserve money to continue its investment programme into 2011 and 2012.

This isn't easy to do and shows the strength of its management.

It has a very dominant position in the market, with sales of around $75 million in a market worth $100 million. It is developing a strong new pipeline of products, so we're happy to hold into 2011 and beyond.

In general, we don't like to 'trade' companies; we want to find businesses that we can buy early and hold for five years. Only two of my top 10 holdings are new in the past 12 months.

We're happy with the valuation of small caps at the moment: while they're not outstandingly cheap, they are still trading at a discount to mid-caps, and dividend yields are attractive."


"We helped to refinance this group in 2009 when it had lots of problems. It makes electric sensors for a wide range of industries, but it had accumulated a lot of debt. The share price had slid from around 300p in May 2007 to under 30p in March 2009.

However, new management has since come in and managed to stabilise the business. The share price has re-rated to around £1, which is the point at which we sold out. We felt that much of the low-hanging fruit had been gathered by the management team and any improvements from here on in would be more difficult to achieve.

As it was, we sold a bit too early and the share price is now around £1.26, but we always like to sell so the next investor's got some upside. Occasionally, investors sell at the top, but it's usually a fluke.

We have 45 positions in the portfolio and we operate on a one-in, one-out basis. We don't have target prices; we simply want to populate the portfolio with interesting stocks. If we find a more exciting company with more upside, then we'll sell an existing company."

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