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Five stocks powering AA-rated Yeaman's Saracen Growth fund
on Jan 29, 2014 at 15:02
Yeaman highlights some of his favourite stock picks over the last few years.
Over the last three years, Citywire AA rated fund manager Craig Yeaman has returned 42.75% versus the average UK All Companies manager return of 38.35%. Since inception in March 1999, the fund has returned close to 400% versus the FTSE All Share (Total Return) of 105.2%m, according to Lipper. The manager invests throughout the market cap spectrum and is currently exposed 24% to the FTSE 100, 23% in the Mid 250 and 53% within Small Cap and AIM stocks.
Craig Yeaman runs a concentrated portfolio and currently the £31m Saracen Growth Fund has 34 stocks in it. The manager is comfortable running between 30-45 stocks, depending on where he is sees value.
Here he introduces some of the stocks that have helped deliver that success.
STV Group plc (STVG.L)
The fund has held STV Group since 2009 when it was bought at 100p. The stock has been on a very inexpensive rating for a number of years as worries persisted over the high level of debt and pension deficit the company was running. Management has taken decisive action to reduce these and recent results have shown the strategy to be successful, with earnings having also increased materially. The graph above illustrates our long-term approach to investing.
M J Gleeson Group PLC (GLEG.L)
We first purchased the stock for the fund in October 2012 at 140p. Based in the North of England, the house builder focuses on the affordable end of the market with an additional strategic land buying business in the South of the country. Our fundamental and rigorous analysis suggests the number of houses the company will build will more than double over the next three years with margins materially ahead of current level.
Howden Joinery Group PLC (HWDN.L)
Howden Joinery is the UK’s leading supplier of kitchens and joinery to trade customers. The company continues to have a dominant position within its chosen area and is generating considerable amounts of cash which it is beginning to return to shareholders through higher dividend payments. We bought the stock in the middle of 2011 and it is currently one of the fund’s largest holdings.
Weir Group PLC (WEIR.L)
Weir Group has been held for over 14 years within the fund. The share, over that period, has performed extremely strongly. We took the opportunity at the end of 2008 to add to our holding after the price fell from over 900p to 270p. We take a long-term approach to investing and are rigorous in our analysis therefore we were comfortable increasing our position on a setback in the share price.
GKN PLC (GKN.L)
GKN is the largest position within the fund and was first bought back in 2010 at just over 120p. We liked the dynamics of the business and the strong market positions the company has. Prior to our investment, the business had a rights issue to pay down debt and therefore was in a stronger position financially than previously. Since then, management has focused on improving margins and moving into the civil aerospace market, successfully achieving both.