However, I do have one bit of good news. GVC is performing at last. I first bought it in 2012 at about £1.60 and realized a chunk of profit during one of the one of the 2012 pull backs. I sold at 229 realizing 43% profit and pocketing a dividend which added another 7 percent to my bundle.
The share was suspended for a time while it absorbed its purchase of part of Sportingbet. When GVC re-listed I had to pay 263 to get back in so I lost a potential 15%.
This is currently my very best investment and as usual with these top performers there is something a little different. In this case we have a company providing services to the gambling industry internationally. It has a policy of running the business for cash and aggressively distributing that cash in dividends. It announced that it would move to a quarterly distribution before it was suspended. It has restarted paying dividends earlier than first announced and it has reported that it expects results for the current year to be ahead of market expectations.
Immediately following its first ex dividend date the price started to pull back very sharply. You can imagine that I felt very nervous especially since, currently, this was my only holding. (Attentive readers will know I've pulled out of my other shareholdings.) Nevertheless I felt confident in this share and bought more, twice, once as the price was falling (never catch a falling knife) and once at the bottom (still catching a falling knife but sometimes you're lucky).
The price fall has been caused by one of the major shareholders disposing of its stake (they been in the company for a while and they must be sitting on a hefty profit). The problem when one big seller tries to dispose of a big stake is to find a buyer. Too early to say for sure but it looks as though this a buyer has been found and a huge sale yesterday, or was it a negotiated buy, brought the price slide to an end. Early to say but it looks as though my faith in the business may have paid off. Good thing too I have now well over 20% of my portfolio invested in just this one share. Not to be recommended! Incidentally I should repeat my ever present warning: I do not recommend ANY shares or ANY strategy. I am simply describing my own efforts to play the game.
So why have I been so convinced that this share is worth holding. Two reasons: I purchased the bulk of my holding when GVC's PE ratio was below 6 (earnings yield of almost 17%) and that was on a historical basis (i.e. not taking into account EPS increases, and the dividend yield was about 12%. And, it appears, there are no obvious nasties in the business. It screams cheap.
Anyway, net result is a sigh of relief that my gamble paid off and I look forward to banking those chunky dividend payments.
So back to the real world of hard decisions. It looks as though I may have to go back into the market. I'll give that some thought later today All the QE money is inflating the stock market and if it goes on that train beckons. I shall just have to be a bit smarter in picking my shares.
I have another radio program to recommend which addresses the horrors of Quantitative Easing and the looming disaster that it is hiding. http://www.bbc.co.uk/programmes/b03dfpjt As I listened I was chilled to the core. All that money we are printing (governments are us) is redistributing wealth to the rich and distorting commodity as well as stock markets. And no-one cares.
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