Only one thing in the news - COVID-19.
It's not the only problem affecting the markets of course. Oil prices have been smashed by demand dropping off a cliff since nobody is going anywhere, and the Saudi's opening their taps. And until they have achieved whatever they have in mind, any business dependent upon oil is going to suffer.
The collapse in price of a key global commodity, such as oil, and the suspension of the vast majority of consumer spending in a number of economies on the planet is certainly making everyone sit up and take notice. With this happening against the backdrop of expensive markets, it's unsurprising we have seen significant reductions in share prices.
It's going to be interesting to see how far revenues, profits and cashflow have fallen once we start getting earnings reports issued, and whether any businesses are actually priced as bargains. I have a list of companies I'd like to buy into, but I'd like to see a bit of economic data first. Even though some of them are historically very good companies, there is a genuine whiff of existential angst in the air. I'm quite comfortable missing the bottom chunk of the recovery if need be, and I'm equally not fussed about getting in too early. Most quality businesses should recover over the next year or two.
As an investor keen on dividends, it is disappointing to hear of dividend cuts but these are unusual times. The investor community has insisted on spare cash being returned to us via dividends or share buy backs, so we should be not be surprised that an acute cash flow crunch leaves firms a little exposed. Three of my portfolio have so far reported cuts to their dividends, I'm relatively sanguine as this should help reduce the probability of needing to borrow to survive the next few months.:
Somero Enterprises - postponed dividend to 2021 (it's ok guys, you can cut it - we understand 😎)
Nichols - cut dividend as revenues are likely to materially impacted by COVID-19
Fulcrum Utilities - dividend had been postponed whilst asset sale completed, now formally cancelled
Nothing bought or sold during March, waiting for things to stabilise a tad, so keeping the powder dry just a little longer.
Portfolio performance
The portfolio was down -8.9% in March, losing less than my chosen benchmark the Vanguard FTSE All Share Accumulation which was down -15% over the same period.
Best performers this month:
888 Holdings +9%
Reckitt Benckiser +7%
Craneware +1%
Worst performers this month:
Dignity -52%
SAGA -47%
AB Dynamics -33%
No comments:
Post a Comment