Altitude cut and Sylvania Platinum added

Altitude Group: (ALT.L, AIM All-Share, Market Cap £32m, 47p, 0.0% of JIC Portfolio and 0.0 of JIC Top 10)

“Run your winners cut your losers”, “cut out your weeds, not your flowers”

I have just cut the remaining position in Altitude, realising a loss. If at a later date it proves its business model is working, then I may well come back to it but for now, I think I have better use for the money.

Sylvania Platinum: (SLP.L, AIM All-Share, Market Cap £105m, 37p, 2.5% of JIC Portfolio and 0.0 of JIC Top 10)

I have added a 2.5% position in South African, platinum group metals producer, Sylvania Platinum.

Its latest investor presentation can be found here.

The main things I like about it are:

Its strong balance sheet with net cash and strong cash flow.

Its valuation: It started paying a dividend last year and for the year ending June 2020 is on a prospective dividend yield of 4.8%. It is on a prospective PE ratio of 5.0x for 44% forecast earnings growth in the current year.

On Stockopedia it has a StockRank of 99, consisting Quality 95, Value 67 and Momentum 96.

It passes no less than four “guru” screens: Martin Zweig Growth, Jim Slater Zulu principle, Benjamin Graham Enterprising Investment and Neglected Firms Screen. So, a good combination of Growth and Value.

It has a superb shareholder list; see page 9 of the presentation.

Why today? It is off 5.1% on the day and nearly 20% off its August peak and hopefully will find support at the 50-day moving average, given the cheap valuation.

I have ranked it High Risk/High Return suggesting a 2.5% holding for me.

The balance sheet and cash flow suggest low risk, but I have graded it high risk as it is subject to the vagaries of the platinum price. If the platinum price was to plummet, Sylvania’s share price would suffer. I am happy with giving it a high return rating given its cheap valuation. It would not need much of a re-rating to give a decent return. If for instance, the market was to value it at 7.5x current year earnings, rather than today’s 5.0x, that would give 50% upside!

I received 45.15p per share for the Altitude and paid 36.55p per share for the Sylvania Platinum

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