The last three, and my thoughts for 2013

Ok, back in ....

De La Rue

Market dominant (the majority of nations are or have been customers), a predicted yield of more than 4%,  and the wife is a big fan - there was little choice but to get some De La Rue the month I did buy into it.

It had a rather sad end to the year, dropping over 10% - but is it still a goer?  It's on a very high price to earnings (just shy of 25), but fundamentally looks like it has a sound basis.  What could really screw the company up is bad management - they do have a couple of European competitors, and I am sure the business between the three is pretty cut-throat.  Diversification is what will keep this business profitable in the long run - and it's a relief to me they also manufacture high security feature passports.

Unadjusted yield: 2.74%

Greggs

This company was a stock market darling when I bought in, being one of only a handful of firms to increase it's dividend for decades in a row.  So why's it near the bottom of the list?

Although Lancaster has three of them, outside of the UK its non-existant - and i don't really see us convincing many foreigners to look like fat pies over the next few years.

Since I bought in, the Chairman has announced his intention to step down in 2013 and the CEO has been poached by Brakes (and good for him - its a great promotion).  The significant question for me is: are these rats leaving the metaphorical ship?  I have to say, with a slowdown in sales announcement a few weeks ago I can't really see myself doing anything more with Greggs for the coming few months.  It will remain on the watch list, but I cannot see it getting further.

Unadjusted yield: 3.78%


Vodafone

Oh Vodafone, how I love you!  Not because you are the last stock to blog on, but because you are such a perfectly successful British multinational. So why have you done this to me?  It's so out of character.  Not only are you my dog, but you are one of the Dogs of the FTSE.

I bought two tranches of Vodafone in 2012, and they've combined to give me a big kick in the teeth.  Its the world's biggest mobile telecommunications company when measured by revenues, second only to China Mobile in subscriber numbers (and that is a mobile market you do not want to go anywhere near).  It has amazing overseas exposure - Africa, North America, Europe (and therein lies the problem), the Far East.....

It also has to compete for fourth generation frequencies all over the world.  The electromagnetic spectrum is regulated by countries who allow you to send messages on wavelengths if you have bought them.  Right now the fourth generation frequencies are being auctioned - and if you remember the ridiculous amount of money that was spent on the 3G licenses, the market does, you will know why to be frightened.

But lets get real - its certainly hard to unpick the telecoms crash from the dot com crash and identify what the impact on the mobile phone companies was of overpaying - but these are services which are only going to grow.  Landlines are dead - data communication is the future - and firms like Vodafone, with their equipment partners (Huawei, Ericsson, Alcatel-Lucent, ZTE, Nokia Siemens Networks), are the businesses that will benefit.  This is still gold rush territory in my head.

So will I be selling?  Will I hell!  I have absolute conviction in this company - even though the market doesn't.  In 30 years time I'll find out if I was right!

Unadjusted yield: 3.66%

So that's all for this year's review.  What do I anticipate in the next twelve months? Probably the following:

1. No crash, but no significant growth (so outperform with good dividend yielders)
2. A continued increase in the price of gold - primarily driven by central banks
3. A reduction in the portfolio running cost as the cost of share acquisition reduces as an overall proportion of the total fund value (it's front weighted, but the shares stay for ever)
4. A reduction in government expenditure internationally - so avoid those providing the government with services if the government is the main customer (raising questions about poor old CareTech)
5. A good old UK Tory Party scandal (its as easy as predicting rain in Lancashire)

Until next time...