Fidelity Japan Trust increased to 2.0% and profits taken on Medica Group

Fidelity Japan Trust (FJV.L FTSE Small Cap, Market capitalisation £222m, 164p, 2.0% of JIC Portfolio and 0.0% of JIC Top 10)   

Yesterday I added this trust to the Portfolio and said that I expected to increase the position to 3.0% of the portfolio in the coming weeks.

I have taken the first step this morning by doubling the position to 2.0%.

I have funded it by selling Medica Group.  

Medica Group (MGP.L, FTSE Small Cap Index, Market Cap 161m, 145p, 0.0% of JIC Portfolio and 0.0% of JIC Top 10) 

On 12thSeptember, following its interim results I concluded: “The bottom line is that I don’t feel that the investment story is compelling enough to add to what, at 1.6%, is one of my smaller holdings. Watching and Holding for now!”

On further consideration, I’m concerned that earnings forecasts for the full year were trimmed slightly after it reminded shareholders that margins in H2 were likely to be lower than H1. I know that directors sell shares for all sorts of reasons but I noted that John Graham, the CEO, sold 37% of his holding on 21stSeptember. Lastly, valuation is not as attractive as it was when I bought in May; it’s on 20.5x 2018 forecast earnings and is on a prospective yield of only 1.4%.  I don’t feel very strongly about it but on balance, I think, given the  risk/reward, I can do better elsewhere and am happy to book my 14% profit.

See JIC Portfolio tab above for updated portfolio and transaction details

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