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Nimmo buys trio of ‘damaged’, but rehabilitating shares

Standard Life smaller companies fund manager buys companies 'that have been compromised and damaged by the banking crisis'.

 
Nimmo buys trio of ‘damaged’, but rehabilitating shares

Paragon, the buy to let lender recovering from a ‘near death experience’, is among a trio of shares recovering from the financial crisis that fund manager Harry Nimmo has added to his £1 billion smaller companies fund.

‘We’ve gone back into some sectors that have been compromised and damaged by the banking crisis – specialist lenders and real estate,’ says Nimmo, the Citywire A-rated fund manager who runs the Standard Life Investments UK Smaller Companies fund .  

Paragon (PARA.L), the buy-to-let lender cashing in on the decline in house ownership, has seen a 54% surge in its share price over the past 12 months. ‘In 2008 Paragon had a near death experience. A couple of major refinancings later, the company has gone through a rehabilitation period and is back into growth,’ Nimmo said.

‘The good thing about Paragon now, is banks which used to infringe on its market have disappeared from the scene. They’re not interested in the buy-to-let market – so Paragon have it to themselves,’ added the Scotsman, who has run the smaller companies fund since its launch 16 years ago.

Nimmo (pictured) has also bought into Workspace (WKP.L), which rents out offices, meeting rooms and other working space within the M25. ‘This was another casualty. It’s been through a couple of refinancings. Occupancy rates have always remained resilient and it dominates that market,’ says Nimmo.

The company gets an extra ‘kicker’, he said, when they are able to sell sites for ‘change of use’, perhaps as housing or retail space. ‘That trend is starting to occur,’ says Nimmo.

A third company that suffered in the banking crisis but is back in Nimmo’s favour is property company Quintain Estates (QED.L). ‘Recovery and risk are in,’ says Nimmo, who describes himself as ‘pretty positive’ about the economic backdrop for investors.

Nimmo has also bought into PayPoint (PAYP.L), the bill paying system which he says is ‘really taking over from the Post Office’. And Amerisur, a Colombian based oil and gas company ‘which is developing some major fields in south east Colombia’.

Investment trust alternative

Nimmo’s UK smaller companies fund, which features in Citywire Selection, has been ‘soft-closed’ to new investors, a tactic taken by investment houses when they want to stem inflows into swollen funds. It is however available from the company itself.

Alternatively investors can put their money into the investment trust of the same name , which largely invests in the same companies (there is an 80% overlap, Standard Life says).   

3 comments so far. Why not have your say?

Ian Holmes

Feb 06, 2013 at 04:54

The Standard Life UK Sm Cos IT (SLS) has actually performed far better than the fund over 1, 3 and 5 years, so it is definitely worth considering

But for those who prefer the fund route to the Investment Trust route, as an alternative to the Standard Life UK Smaller Cos IT, take a look at Fidelity's UK Smaller Cos fund managed by AAA rated Alex Wright who has turned in an even better performance in recent years.

To assist with research, its worth looking at:

http://www.trustnet.com/News/396353/little-known-managers-who-have-beaten-the-stalwarts/

and Alex's profile on CityWire:

http://www.citywire.co.uk/manager/alex-wright/d14857?classSchemeID=87&timePeriod=36§ion=money#about

He's managed 1/47 over 3 years; 1/52 over 1 year. (Harry managed 6 and 22 respectively)

To check whether it might be a suitable alternative, comparison between the two funds and the IT can be made easily on the Hargreaves Lansdown, Citywire, FETrustnet and Morningstar sites amongst others.

I recently swapped from the SL fund to the Fidelity fund, so I'll see how that turns out in due course!!

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HugoMaracuya via mobile

Feb 06, 2013 at 09:33

Hmmm, Although I agree Amerisur is a great investment, I don't go much on the author's research. Putumayo is in the WestSouthWest of the country, not SouthEast. If he can't get a simple thing like that right, what chance that the rest of his research is just as slapdash? Oh, and "gas"???? I don't think the author knows much about the company at all. Journalism today has fallen to an all time low, I'm afraid. But the CEO of Amerisur did just pick up the award for top CEO of small cap oilies last week, based on his work at Putumayo, so the tip is justified.

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Graham D-C

Feb 09, 2013 at 12:46

Amerisure directors have collectively sold millions of shares between 37.5p and 45.4p, before exercising options at a fraction of the latter prices.

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  • The Paragon Group of Companies PLC (PARA.L)
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  • Workspace Group PLC (WKP.L)
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  • Quintain Estates And Development PLC (QED.L)
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  • PayPoint PLC (PAYP.L)
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  • Amerisur Resources PLC (AMER.L)
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