Anexo (ANX:AIM) 133p

Gain to date: 0.8%

Original entry point: Buy at 132p, 20 August 2020

All successful investors regularly review their holdings to ensure that the investment case is still solid and each stock deserves its place in their portfolio.

With this in mind, our ‘spring clean’ process has thrown up credit hire and legal services firm Anexo (ANX:AIM), which we picked in August 2020 and has gone absolutely nowhere in the meantime.

The firm had been an AIM star, consistently raising guidance through 2019, and while the pandemic caused a drop in traffic in the first half of 2020 we expected a recovery in the second half, which combined with the firm’s move to net cash generation should have lit a fire under the shares.

Investors disagreed and the shares continue to languish where we bought them. We may not have incurred a loss, but the opportunity cost has been high – the FTSE 100 is up more than 15% since mid-August and the FTSE 250 is up 29% at record highs.

We had hoped the full year results (27 Apr) might change perceptions, but despite better revenue, increased cash generation and further progress in its legal business, investors remain unconvinced, meaning it’s time for us to wave the stock goodbye.

SHARES SAYS: Investors should weigh the opportunity cost of holding onto stocks which underperform. 

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