Fund managers diary

Richard Penny is the manager of the Legal & General UK Alpha Trust. His diary runs from July 19-25.



Monday We meet Julian Dunkerton, the chief executive and founder of Supergroup. We discuss the company’s first set of figures. Supergroup is a fashion retailer that floated on the stockmarket in March. Sales growth of an impressive 83% has led to profits in excess of expectations. We conclude that there are enough growth prospects to keep this going for several years. We will retain our holding despite the share price doubling since floating.

Tuesday The highlights involve a conference call with other shareholders of a business in which we are trying to make management changes. We support most management teams, but in this case progress has been hindered and valuation held back. Solving this problem could lead to big upside in the shares.

We also spot that directors of Immunodiagnostic Systems have sold 25% of their holdings. Again, this company, a winner for the UK Alpha Trust in 2009, is growing strongly, but we will not add to our position when director sales occur.

Wednesday There is a trading update from Xaar, another holding. The news is generally good. Sales are making progress in new areas, but there are some rework costs. Profit forecasts do not need to be changed.

We seek out the best analyst to talk to about the company and establish that new products are going well enough for the company to be considering new capacity additions. The shares are 130p, and had traded at 330p when people had anticipated new products three and a half years ago. It is early days, but Xaar is now looking well poised for several years of profits growth.

The afternoon involves a trip to Sandown races as Legal & General host clients. I have tried to work horse racing out, but have long ago given up. Best stick to shares. (article continues below)

Thursday A results meeting with CSF, a Malaysian data centre operator. The business is making good progress as the likes of Google, Malaysia Telecom and NTT [a global communications company] add capacity. This is being driven by more internet traffic on fixed line computers and mobile phones. We also host a lunch to market the UK Alpha Trust to a range of existing and prospective investors.

Friday This morning I check Bloomberg for any company news. This is followed by the Sri Lanka versus India cricket on the internet to see if Murali [Muttiah Muralitharan, a Sri Lankan spin bowler] can get his 800th wicket. He does, with the last Indian wicket to fall. It is a great achievement in his last Test match and one unlikely to be beaten.

There is a second pre-marketing meeting for a possible IPO [initial public offering] on the London market. An Indian entrepreneur who is considering floating an infrastructure venture comes in to discuss his plans. His ideas look promising and subject to the right price and corporate governance, we commit to make an investment.

Saturday It is a busy weekend. Saturday is spent booking flights for my honeymoon in South East Asia.

Sunday Spend the day buying wedding rings with my fiancée. Apparently, the economic downturn has seen a reduction in men buying platinum rings, trading down to titanium instead.

Diamond prices have risen recently as nearly 50% of Chinese brides select them in their wedding rings. Economics gets everywhere. The coming work week ought to be quiet, but then in fund management things rarely happen as planned.