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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. Running bumper profits

    Running bumper profits

    By Simon Thompson | 27 August 2015

    Shares in a quartet of small-cap companies have soared this year, and are trading close to multi-year and record highs, but this is not the time to bank profits

    'The combination of a sustainable 6 per cent yield, and potential for outperformance on delivery of revenue synergies, are reasons enough to run profits your 41 per cent paper profits on this holding. Indeed, there is scope for the share price rally to continue as I see additional upside to the aforementioned EPS estimates from revenue benefits not factored into recent upgrades.'

  2. Powered up for gains

    Powered up for gains

    By Simon Thompson | 29 July 2015

    Two small companies have made smart looking acquisitions and warrant significant upgrades

    ‘I feel all the catalysts are now in place to propel the shares firmly through the 125p price level that has acted as a glass ceiling to progress this year especially as the company is set to report a large uplift in profits in its forthcoming interim results. In fact, that major resistance level was taken out yesterday and I upgrade my fair value target price to a range between 155p to 160p, or the equivalent of 12.5 to 13 times fiscal 2016 earnings forecasts.’

  3. A quartet of small-cap buys

    A quartet of small-cap buys

    By Simon Thompson | 08 July 2015

    Four small cap shares all offer value opportunities and potential for decent gains

    'The takeover of Thorntons by Italian rival Ferrero will boost the company's coffers further as it owns 17 per cent of the shares in the UK chocolate retailer, a holding now worth £17m, or £5.5m more than its last valuation. Or put it another way, once both the takeover of Thorntons and Aer Lingus complete, then the company will have a pro-forma book value of almost 169p, up from 155p at the end of April 2015, including around 50p a share of cash.'

  4. Small cap wonders

    Small cap wonders

    By Simon Thompson | 17 June 2015

    A quartet of small cap shares have been making important moves and ones worth capitalising on

    ‘The company is clearly delivering which is why analysts raised their earnings forecasts for this year and next by around 10 per cent plus. And with net debt reduced to less than 20 per cent of shareholders funds, then expect a 10 per cent hike in the current year dividend. On this basis, the shares are rated on a forward PE of 14 and offer a prospective dividend yield of 2 per cent, still an attractive valuation for a company on an upwards earnings curve.’

  5. Bargain Shares updates

    Bargain Shares updates

    By Simon Thompson | 16 June 2015

    A trio of Simon Thompson's bargain shares have been in the news, and it's all good

    There is still potential for further share price gains given that earnings estimates look on the conservative side to me in light of the 30 per cent profit growth reported in the first half, the company has a cash pile worth 42p a share which has to be factored into the valuation, and the cash adjusted prospective PE ratio is 14.5. True, the earnings multiple is no longer in bargain basement territory, but neither is it over extended.

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 Portfolio

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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