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Simon Thompson's Bargain Portfolio


The idea behind our annual Bargain Shares Portfolio is very simple. It’s to invest in companies where the true worth of the assets is not reflected in the share price, usually for some temporary reason, but where we can reasonably expect that it will be in due course.

Our portfolios are based on the investment ideas of Benjamin Graham (see box ‘Rules of Engagement’) and they have beaten the FTSE All-Share index in 13 out of the 16 years in which we have run them. During that time, they’ve generated an average return of 22.7 per cent in the first 12-month holding period compared with an average increase of 4 per cent for the FTSE All-Share.


Latest Updates

  1. Investment company watch

    Investment company watch

    By Simon Thompson | 05 January 2017

    Shares in three small-cap investment companies have produced stellar gains in the past year, with prospects of more upside in the coming months

    This unrealised profit of $157.5m, if confirmed, compares with implied second half of 2016 consensus revenue and operating profit expectations of $48m and $35m respectively. We doubt anything from the Petersen case has been included in consensus estimates for 2016, which therefore suggests material increases to 2016 revenue, profit, EPS and book value per share estimates will be seen.

  2. A quartet of small-cap value plays

    A quartet of small-cap value plays

    By Simon Thompson | 28 December 2016

    Simon Thompson highlights four undervalued small-caps

    Trading on a modest premium to book value, rated on less than nine times EPS estimates of 5.6p, falling to only eight times EPS estimates for the financial year to March 2018, and offering a 3.2 per cent prospective dividend yield, the shares still rate a cracking buy.

  3. On a roll

    On a roll

    By Simon Thompson | 20 December 2016

    Simon Thompson casts his eye over five small cap companies in the news including three constituents of his Bargain Shares portfolios.

    By my reckoning spot net asset value is around 221p a share, or almost 13 per cent higher than at the last monthly update. This means that the shares are trading on an unwarranted 14.5 per cent share price discount.

  4. Targeting record highs

    Targeting record highs

    By Simon Thompson | 21 November 2016

    A quartet of Simon Thompson’s small cap companies are targeting all-time share price highs

    The judge found for the plaintiffs effectively on all points which means not only is there is a case to answer, but the probability of ultimate success for Burford and its client has increased. In the event of a successful outcome, it’s worth noting the state has settled similar such cases at 50¢ on the dollar, so there is potential for a significant windfall payout for Burford's shareholders on the US$3bn action.

  5. Manufacturing currency gains

    Manufacturing currency gains

    By Simon Thompson | 05 October 2016

    A pair of manufacturing companies with significant overseas exposure are benefiting from significant currency tailwinds

    The point being that with currency tailwinds strengthening in recent weeks, and sterling hitting a 31-year low against the US dollar, the full benefit of sterling's recent devaluation further underpins profit estimates. In fact, if the cross rate remains at this level I believe there is scope for further foreign-exchange-led earnings upgrades

Our portfolios

Mr Bearbull's Global Fund Portfolio

A portfolio of instruments designed to capture the rise of emerging markets

Mr Bearbull's Income Fund Portfolio

A collection of high-yielding shares that's beaten the market since 1998

Chris Dillow's Benchmark Portfolio

Simple portfolios picked using simple rules that often beat the market

John Baron's Investment Trust Portfolios

A portfolio of investment trusts designed to generate growth and income

David Stevenson's SIPP Portfolio

Our columnist describes how he manages his pension fund and what he puts in it

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