This blog gives you the latest topical news plus some informal comments on them from ShareSoc’s directors and other contributors. These are the personal comments of the authors and not necessarily the considered views of ShareSoc. The writers may hold shares in the companies mentioned. You can add your own comments on the blog posts, but note that ShareSoc reserves the right to remove or edit comments where they are inappropriate or defamatory.

Silverdell tips and a meeting for shareholders

It was good to see Investors Chronicle giving the honest background to their worst tip of 2013 in their latest edition – namely Silverdell where shareholders have now been told their shares are worthless after being suspended for six months. They first tipped Silverdell as a “buy” in January 2011 at 7.25p and the share price subsequently doubled. They renewed the positive tip in January 2013 when the price was 17p and the p/e was 8 with gearing at 29 per cent. To quote from their report: “there was nothing to indicate that the group’s business model would not continue to drive better returns“, although perhaps not everyone would agree with them.

Note that ShareSoc is promoting a meeting for Silverdell shareholders on the 20th January to try and provide some explanation of what happened and why, and whether there is anything remaining for shareholders to do. See www.sharesoc.org/events/ for details of the meeting.

Investors Chronicle do give a full analysis of all their 200 buy and sell tips in the latest edition and despite writing off Silverdell and having a few other losses (mainly in small cap natural resource stocks and other “speculative” stocks), they still claim to have beaten the market by a substantial margin on their buy tips. The moral no doubt is that some diversification is very important, and also closing out the losing tips before the year end probably also helped.

Amusingly though they actually also beat the market on their sell tips which were up 9.6%. This surely demonstrates that there is no such thing as bad publicity!

Roger Lawson

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