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Fund manager has only made four new investments in past two years
Thursday 06 Oct 2016 Author: James Crux

When the manager of one of the UK’s most interesting funds makes a rare investment, you need to take notice.

Keith Ashworth-Lord of the CFP SDL UK Buffettology Fund (GB00B3QQFJ66) is a very picky man, mirroring the approach of legendary investor Warren Buffett whose stock picking skills are admired around the world and which serves as the backbone to said fund.

Only three new companies had been added to the Buffettology portfolio in the two years to September 2016. A fourth
has now joined the portfolio, being urban regeneration and land development group MJ Gleeson (GLE).

Ashworth-Lord applies the methodology of ‘Business Perspective Investing’ championed by Warren Buffett and his teacher Benjamin Graham. Buffett himself is famous for discipline, patience and value – a style that has outperformed the market on many occasions over the years.

The Buffettology fund contains UK equities with strong operating franchises and experienced management teams. ‘Only an excellent business bought at an excellent price makes an excellent investment. One without the other just won’t do,’ states the website of Sanford DeLand Asset Management, the brains behind the Buffettology fund.

MJ Gleeson recently reported its latest financial results, showing 20.5% growth in pre-exceptional pre-tax profit to £28.2m and a 45% increase in the dividend to 14.5p.

The shares were hard hit in June on the back of the Brexit vote where they fell to 424.5p by the start of July. They’ve since bounced back to now trade just above 600p.

Spanners and platters

The other three stocks bought by Ashworth-Lord in the past two years focus on engineering and leisure.

‘The first was AB Dynamics (ABDP:AIM) in June 2015,’ reveals Ashworth-Lord. This business designs and manufactures specialised products for the automotive industry and supplies all the top global automotive OEMs (original equipment manufacturers). It has a unique niche product required by its customers,’ he explains.

‘The second was a re-entry into a business I used to own, Driver (DRV:AIM) in December 2015. It is a people business providing consultancy to the engineering and construction industries with a particularly strong position in dispute resolution. It briefly lost its way – not for the first time – in 2014/5 but is coming back strongly under new management,’ says the fund manager.

The third investment, Restaurant Group (RTN) had been on his watch list since the fund’s inception but could only be purchased at a ‘sensible price’ after three profit warnings between November 2015 and April 2016, explains Ashworth-Lord.

‘Again under new management it is making progress in resolving company-specific failings. I was able to buy in at prices as low as 40% below what I estimated net worth to be. That’s what I call a “margin of safety”.’

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