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Tineke Frikkee's 'cash machines' and 'grinders'
by Sarah Miloudi on Aug 29, 2013 at 08:57
After waving goodbye to Newton, a thematic investment house, Frikkee is looking to boost the performance and assets of the Smith & Williamson UK Equity Income Trust , which she runs alongside Mark Swain.
Speaking to Wealth Manager, Frikkee said Drax, which is also held by Neil Woodford, was added as a new holding in early July. Frikkee said she was lured to the power generator because of its strong balance sheet, adding that Drax's 'huge' potential to be a 'cash machine' and grow its yield over time also won her over.
'[Drax is] a very stock specific example. Since early July it's performed well and gained momentum,' Frikkee (pictured) said.
Pub operator Marston's has also made it into Frikkee's new portfolio, and like Drax has been added to the fund new at 2% of assets.
Similarly, home builder Berkeley is also a new holding, and together with Marston's Frikkee said the stocks should benefit from the improving UK economy.
With the recovery still at an early stage, Frikkee said consumer confidence is increasing, but shoppers are still reluctant to spend freely.
'People still like to go out but the likes of Cafe Rouge and Pizza Express are still a bit expensive for the whole family,' she explained.
'[Marston's] has an EBITDA higher than average but a PE less than the market,' Frikkee continued, adding that Marston's is a 'bit of a grinder' when it comes to growing its earnings, but has longer term potential.
Exiting Frikkee's £9.2 million UK Equity Income Trust, which in the last three months has returned 8%, beating both the UK equity income sector median and the FTSE All Share Index returns, are Ashmore, Vodafone, Invensys and Menzies. BP and Unilever have also been trimmed.
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- Drax Group PLC
- Cranswick PLC
- Berkeley Group Holdings PLC
- BP PLC
- Ashmore Group PLC
- Vodafone Group PLC
- Marston's PLC
- Invensys PLC
- John Menzies PLC
- Unilever PLC
- Kentz Corporation Ltd