...about my purchase of IG Group in September this year which I mentioned in my other post today? If so good news as I am hoping to introduce a portfolio service in the New Year in which I will open up my portfolio and give updates on trades as they happen.
If that is something that might be of interest then head over to my Portfolio page for some background on how I do it and how I have done in the last few years. There you can also sign up to get yourself on the update list for when this service goes live and to receive details of any launch offers.
...it was oh so quiet. I last wrote about this one back in September after their Q1 IMS. At that time markets had been becalmed and quiet as is often the way at that time of year. IG had fallen to the bottom of their range at the time and I felt they looked OK if not outstanding on around 14x with a 5% yield and I said: "being oversold there may be an opportunity to get in for the medium term if their business and financial metrics appeals to you."
Fast forward to today and they have put out a strong Q2 / H1 Pre Close IMS benefiting from the increased market volatility in their 2nd quarter. On this they said:
"client activity levels increased significantly in the second quarter, particularly in October, as the financial markets presented considerably more trading opportunities. The company performed very well over this period and will achieve quarterly revenue ahead of its previous highest quarter at the end of the 2013 year. This will place IG in a robust position as it enters the second half of the financial year."
So nicely set up for some good interims and possibly some upgrades to full year numbers, although I seem to remember that last years second half will present tough comparatives so I wouldn't get carried away. The other reason for caution is the fact that the shares are now 100 pence higher than when I last wrote at 670 pence this morning and this leaves them on a fullish looking rating of around 16x with a 4.4% yield on limited dividend growth forecasts which suggest a dividend of 28.4 pence (source: Stockopedia). However, there's a chance we will see upgrades to both earnings and dividends on the back of this update which might make them look better value.
Technically as you can see in the chart above they have now rallied to the top of their one year range which has been between about 560 pence and 650 pence and they have this morning broken out to a new 12 month high and they are now close to being over bought. Momentum traders like to buy stocks that do this as the theory is that stocks at new highs put investors off or cause some to take profits when in fact it is a signal that the business is improving and therefore under priced as a result. I guess this could be true in this case given the update and the possibility of upgrades. In addition technical theory might suggest if it has broken out of the range then it could progress by the extent of the previous range, which in this case would give a target of around 740 to 750 pence or 10% or so on the upside.
Summary & Conclusion
A not unexpected strong update from IG Group today given the recent volatility in the market. This sets this well managed group up for a strong first half and possibly some upgrades, although tough h2 comparatives may mean that analysts are cautious with their numbers. Technically the shares have rallied from the bottom to the top top of their twelve month range in short order and are showing signs of breaking out which could lead to further upside. If you are a momentum jockey then you might want to jump on board for this, or if you are a Timmy trader and got in at the lower levels, then you might want to take some profits soon. Personally I'm happy to hold for the medium term, although I wouldn't be buying more up here, as I did that in September! Probably best to wait for when its oh so quiet again if you like the story here and are not a momentum jockey, if not enjoy a eild ride with the wacky Bjork song instead.
Yet another US import seems to have made its way over to this country. This is an annual marketing opportunity for retailers called Black Friday where they have lots of offers on the Friday following thanksgiving day in the US. See the highlighted link or the video above for more about the history of it but beware the video does include some strong language as well as interesting history and facts.
So if you are a spender I guess you might be excited by this and if you are then you might also need to get your finances in order. With that in mind I saw a good article last week about this weeks Financial Planning Week being run by the institute of financial planning which you can read about at the links above and get a copy of their free DIY Guide. So if you are trying to save up more to invest but are struggling with your finances then hopefully these might be of interest to you and help you towards your financial goal.
Of course in the Financial world there are also references to Black Friday and more recently during the 1987 crash Black Monday which ironically because I have included a link comes up in blue. When I worked in the city and markets were up strongly with lots of blue to indicate rising prices on the screens we would say it was a blue day and actually a red day for when it was down, although black has become recognized as the descriptor for really bad days.
So for me as an investor rather than a spender and as a music lover I definitely prefer a Blue Monday to a Black Friday.
The graphic above comes from one of the best articles I read this week. It is about a book that is featured below which based on this piece looks like it will be well worth reading. I would urge you read the article by clicking the graphic as it has so much good advice and bits that made me smile - enjoy. The book is called Excess Returns: A comparative study of the methods of the world's greatest investors so maybe get someone to buy you the book for Christmas or buy it yourself from the link above or the image at the end of this piece or from the original article if you want it from Amazon in the US. Other book shops are available like Wordery which is owned by Connect Group (CNCT). So if you got into that one and wanted to support your shares then you could always get it from there at the link above where it is cheaper than on Amazon.
Not much news worthy of note today. So I thought I would share a recent article I saw from a former colleague of mine about his investing. It includes full detail of his portfolio as at the end of October 2014 which as he discusses was quite an interesting month to say least. Click the image below to read the article which also includes a link to his site where you can get a feel for his subscription based service if that is of interest to you.
I have not tried it but did follow it when it was freely available and I know that John has performed well as you can see from the chart from his site below. Congratulations John on your performance and getting a column with the Mail.