The July meeting of the Motley Fool Staff Investment Club was the first under the new regime proposed by Chairman Nick "Iron Fist in a High-Visibility Sailing Glove" Jenkins, and produced several interesting discussions. Again, we found that a smaller meeting (while obviously lamentable) was easier to manage, and also meant that buying rounds was not at all out of the question.
Our first invited speaker, Alan Oscroft, didn't turn up. Hm. However, James Carlisle (TMFJimmyC) deputised very ably, and we had an illuminating talk on dividends and whether they were in general a Good Thing.
Since the meeting, we've voted on the proposals, and bought Mayflower(LSE: MFW). True to form, it is now the only holding showing a deficit, all our other shares having done rather well since the club inched into profit in June.
Valuation as at 29 Aug 2000
Shares Date Bid Disposal Gain/
held bought price value (loss)
Tesco 544 24 Nov 99 214.5 1166.88 +16.8%
NXT 72 10 Dec 99 1450 1044.00 +5.7%
Marconi 107 13 Jan 00 1132 1211.24 +21.0%
ARM 125 7 Apr 00 805 1006.25 +0.2%
Mayflower 842 3 Aug 00 110 926.20 -7.4%
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5354.57
Estimated commission (60.00)
Cash in the kitty 504.86
Outstanding contributions 200.00
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Total pot 5999.43
Units issued 5749.19
Unit price 104.35p
Performance to date +4.4%
The Motley Fool Investment Club
July Meeting Minutes
As recorded by Angus Scott-Brown (TMFLost)
Location: Prince of Wales Feathers, Warren Street, London
Time: 19:00 hours
Date: Thursday, 20th July
In Attendance: Nick Jenkins (TMFJenko); Stuart Watson (TMFTiger); Martin Wake (TMFSorted); James Carlisle (TMFJimmyC); Jane Mack (TMFJane); Angus Scott-Brown (TMFLost); Christopher Spink (TMFEagle).
1. Apologies (real or assumed) for absence
Rob Davies; Bruce Jackson; Norma Boylan; Keith Milner; Phil Southgate; Alan Oscroft; Mandy Boylan; Ewan Wilson; David Berger; Winfried Rauter; George Row.
These were taken as read, and TMFLost was volunteered to keep the minutes for the meeting.
3. Matters arising
Nigel Roberts, Renée Rosen-Wakeford and Adrian Gordon had all recently left the club.
4. Treasurer's Report
As a result of 3 members leaving, there had been 3 buybacks for a total of 17 units. The club, at the time of the meeting, was in profit (just) at 100.5p. The club was pleased with the progress of ARM Holdings(LSE: ARM), but noted that Tesco(LSE: TSCO) and NXT(LSE: NTX) had been quiet.
It was mentioned that several members are in arrears with their membership dues, and that as a result they were actually in a profitable position for the contributions that they had made. There was the feeling that members who were unwilling to keep up with contributions should be asked to stand down. The club currently stands at 17 members, but those present felt no urgency to replace those who had left, and were content to keep to existing members only so long as there was a core of interested members.
5. Investments
There had been no new investments since the last meeting. Three stocks were nominated:
PPL Therapeutics ((LSE: PTH) by Alan Oscroft (TMFAlan) (proposed by James (TMFJimmyC) in Alan's absence)
PPL had recently been discussed in depth by the Rule Shaker portfolio. The main argument in favour of the company was that cloning was a quicker method of producing sufficient quantities of proteins for treatment than by doing it by test tube methods, which would not create identical animals. The main concerns were over whether the market was large enough and if they had a sufficient moat to fend off opposition of all types.
Andrews Sykes Group(LSE: ASY) by Nick Jenkins (TMFJenko).
Sykes is a plant hire company that has fallen from a price to earnings ratio (P/E) of 20 two years ago to the current level of 7, due to the end of a lawsuit claim and the loss of their CEO. The have, however, acquired Cox's, and managed to retain a new CEO from Rentokil(LSE: RTO). Debt is under control and they have cash available. The Chairman controls over 50% of the company. The main concerns were over how they were to add value, that they are overshadowed by Rentokil and that they are a recovery situation. During the discussion of this company, the members felt that recovery situations may not be the best prospects for the club because they tend to be shorter term holds and can call for quicker decisions than monthly meetings would allow.
Mayflower Corporation(LSE: MFW) by Stuart Watson (TMFTiger).
Mayflower operates in two areas. Stampings are split roughly between the US, the UK and elsewhere, they are an outsourcing specialist. Apparently one of the most successful in the motor industry with the possibility of expansion as the motor industry expands outsourcing. They also manufacture buses where they build the basic structure under a variety of brands. Forward P/E of 7, current P/E 8.5, looking at 10-15% growth. There is no requirement to see a rerating of the stock, as the growth in earnings should see movement in the price.
The voting system was agreed as usual, with votes to be submitted by 2nd August.
6. Learning stuff
In the absence of Rob, who had been going to talk on dividends, James gave an interesting talk on the same subject. This led to a debate on the merits of dividend-paying companies versus those that retained their profits.
7. Any other business
First of all, it was decided to have a discussion on whether to change the voting system. As the current system stands, there is a delay between the meeting itself and the vote being taken. It was felt that the delay was of little benefit to the decision-making process. The current system is for a company to be nominated at least 5 days before the meeting, so that discussion could occur on the board, followed by debate at the meeting and then a week before the resulting vote. However, since there is little active debate on the boards, it was felt that it might be better to apply a proxy system with the voting at the meeting itself, so that there was a decision made at the time that people were the most focused on the decision. If this was to be passed at the September meeting, it would go into effect at the October meeting.
It was decided that Bruce Jackson (TMFGoogly) would be asked to do the next educational talk, on P/E ratios.
8. Date, time and location of next meeting:
1st Tuesday of September (5th) at 19:00 at the Prince of Wales Feathers.
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