John Lee: A few goodies in my Christmas stocking

In spite of a slight drift in prices towards the year-end, I am well pleased with a 28 per cent appreciation in my portfolio’s value in 2009.

There have been a number of excellent performances. Shares in BBA Aviation and Fenner have more than doubled, with significant appreciation in Bodycote, Ensor, Interior Services, Nichols, PZ Cussons, S&U, Sovereign Reversions, Town Centre, Victoria and Vitec.

On the negative side, there’s thankfully not much to report, apart from the Dawson Holdings debacle and the suspicious Aero Inventory collapse – a small speculative failure! My best sale was Marshalls at 132p in September – the share price is currently 87p.

On the dividend front, awards go to PZ Cussons – as always – for a 10 per cent increase in its payout, as well as to new holding Pressure Technologies with a 10 per cent increase, Treatt with 7 per cent, and FW Thorpe for a special dividend from its cash pile.

Sadly, there were no payouts from Christie Group, Gooch & Housego and Pochins , but Ensor and Sovereign Reversions should resume dividends in 2010.

I have also been quite active in recent weeks – cleaning out a number of “bitty” holdings, increasing liquidity and making some new investments.

In my individual savings account (Isa), I bought Dairy Crest and MS International.

I was taken with Dairy Crest having read that its chief executive was focused on increasing the dividend – currently yielding over 5 per cent. With a significant competitor going out of business, the company should restore profitability to milk distribution and its food products division should offer growth opportunities.

I like MS International as it is a solid cash-rich plc, with board members owning 40 per cent of the £20m equity capitalisation. While its forklift truck blades and garage forecourt canopy divisions are not having an easy time, its naval defence business is going great guns! As November’s interim statement observed: “Of notable significance is the further building of the ‘defence’ order book following an exciting influx of new contracts received . . . resulting in another record level of orders.” This division alone has to be worth more than the current capitalisation.

In addition, I have accumulated three attractive holdings on the Alternative Investment Market (Aim).

The Capital Pub Company operates 25-plus high-quality, predominantly freehold pubs in London, which are “securely financed and highly cash generative”. I bought at 70p – half net asset value – and look forward to a promised January lunch at the Ladbroke Arms!

Concurrent Technologies manufactures long-lasting, high-performance single-board computers – and 80 per cent of its sophisticated products are for export, predominantly to the US, for use in surveillance, and countering improvised explosive devices. After visiting its impressive Colchester facility, I bought more shares at 39p.

Wynnstay, the animal feedstuffs and arable products group, is now a bigger and better company than when I first invested in 2005 at 210p. So I have reinvested at 230p on a modest price/earnings ratio of 7. It is trading well – and I hope to visit two of its new “Just for Pets” outlets shortly.

John Lee is an active private investor writing about his own investments. He may have a financial interest in any of the companies and trading strategies mentioned.