Wednesday 25 May 2016

The Maestro's Movers: Neil Woodford's Big Buys and Sells in March 2016

Stock stalking is a weird hobby.

In general I do not "follow" any particular investor's activities. However, there are a couple that I have followed of sorts because I like their investment style. One of them is Neil Woodford

I watch Woodford's fund quite carefully to get some ideas. In particular, doing this with Woodford is comparatively easy as--I am sure many of you know this--he publishes the entire breakdown of his fund each month. Very unusual, but also very interesting.

Since launch I have been assiduously collecting this data and building a little spreadsheet to see how things are changing. I've realised that this work--which is not a tiny amount--may be of interest to some of you.

So here I will offer a little breakdown of the companies that Woodford has bought and sold in March 2016.


First, a little on my methodology. Woodford provides two bits of information each month which I use for this:
  1. The total value of all the assets in his fund (this month, £8.54 billion);
  2. The percentage weight each company has within the fund.
Using this information, I do a couple of things:
  1. Work out the value of the company holding (dividing the fund size by the company's weight)
  2. Using the share price on the day the snapshot of the fund was taken, I work out how many shares (approximately) Woodford holds in the company.
Now this provides an estimate of his shareholding in each company from month to month. It can then be used to work out what his big movers were during the month.

This is where it may be interesting to you.

Woodford's Big Buys in March

So what companies has Woodford been buying into?

Well, here is a list--according to my estimates--of listed companies that he increased his shareholding in by 3% or more. Those in bold were not in last months list of big buys. Those in italics were in last months big sells last month:

2Phoenix Spree DeutschlandLON:PSDL20.29%
4Legal & GeneralLON:LGEN14.59%
7Sphere MedicalLON:SPHR9.67%
10Provident FinancialLON:PFG8.96%
11BCA MarketplaceLON:BCA8.34%
12Raven RussiaLON:RUS7.34%
15Horizon DiscoveryLON:HSD3.85%
16Breedon AggregatesLON:BREE3.60%
17Halosource Reg SLON:HALO3.42%
18Tissue RegenixLON:TRX3.32%

Woodford's Big Sells in March

So what companies has Woodford been dropping?

Again, this is a list of those which have dropped at least 3% or more. Those in bold were not in last months list of big sells. Those in italics were in last months big buys last month:

1Reynolds AmericanNYSE:RAI-11.96%
3Imperial InnovationsLON:IVO-7.64%
6Oxford PharmascienceLON:OXP-6.12%
7Brave Bison*LON:BBSN-5.45%
10Imperial BrandsLON:IMB-3.12%
*This was previously known as Rightster.

Interesting Points

Interestingly, Woodford moved out of one of his favourite sectors quite a bit in March. Tobacco saw hefty drops in his Reynolds American and a smaller, not notable, drop in his Imperial Brands (formerly Imperial Tobacco) holdings. 

Also interesting is that he is still pumpin up his position in insurer, Legal & General. I recently upped my own stake in the company. In February he lifted his holding 10%. In march another 14.6%. It is now his 5th largest holding (its highest position ever).

Indeed, Woodford appears to have gone bullish on insurers generally. Specialty reinsurer, Hiscox, saw a lift over 9% in February and another 21% in March. It has lifted from his 43rd to 37th largest holding. Very interesting.

Other movements of interest to me were his hefty Capita investment (up 10%) and a modest shrinkage in his BT holding (down 4%). BT had been his fifth largest holding since October 2014. Yet it has slipped down to 8th in March. It is unclear whether or not he has become bearish on BT or whether he was just cashing in on share price gains as momentum appeared to slow. Will be interesting to follow.

Some Caveats

Obviously, as with everything on this site, this list is not meant to be advice on what to buy (or sell). Also, these figures are all created from different levels of estimated data. 

The weightings are rounded as is the fund value. Share holdings are therefore estimations rather than certain figures and--as a consequence--my calculations on their changes are not supposed to be seen as 100% accurate. Of course, at this final stage (that is, the write-up) there is also an additional rounding of the percentage changes.

Also, because of the way I collate the data it does mean that full sales of holdings will likely be missed. If you notice any, give me a heads up in the comments section below. For example, this month the Essentra position appears to have been sold out of.

Finally, remember this is an open-ended fund and so has cash flowing in and out of it constantly. As a result, for those companies Woodford particularly favours--if he wishes to keep them at a similar weighting--then each month would show a growth in his shareholding in them. what this means for the true nature of the purchase (confidence, consistency, or whatever) is up to you!

As usual, Do Your Own Research (DYOR)!

What do you think?

What do you think of some of Woodford's big movers? Did you make similar purchases/sells in February? Has the list got you thinking about any of the companies listed?

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[Image reproduced from Woodford Investment Management]

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