Balfour Beatty and the risks of investing in contract businesses

construction workers

When I bought Balfour Beatty in 2011 the company was still performing well despite some obvious headwinds in the UK and US due to recession-like conditions and government spending cuts in both countries. I thought the company stood a reasonable chance of getting through the slowdown without major problems, and for a couple of years that was true. Eventually though […]

When beating the market is not enough

Investment strategy

Beating the market is an obvious goal for active investors. After all, if you’re not beating a zero-effort passive index, why go to all the time and trouble of being active? This is true for both private and professional active investors: Private investors often obsess over whether or not they beat the market last year, […]

The FTSE 100’s new high is not a bubble

Stock market bubbles

Ever since the FTSE 100 reached a new high last month I’ve been meaning to write something about it. Well now I have, but as one of my semi-regular articles for BullBearings.co.uk. To summarise (for the very busy): In 1999 when the FTSE 100 almost reached 7,000 it was trading well above historically normal valuation multiples […]

Why I won’t be investing in Prudential plc (just yet)

Cost-value

Prudential plc recently announced its 2014 results so I thought I’d take another look at this popular and relatively defensive financial services company. I think most private investors are vaguely aware of Prudential and what it does, but if not then a super-quick summary would be that Prudential is FTSE 100-listed insurance group, established over […]

The 10 most profitable dividend paying shares

ROI - return on investment

Profitability measures such as return on capital employed (ROCE) are a useful way to gauge the “quality” of company. If a company can generate consistent returns on capital far above the cost of capital, that alone suggests some kind of durable competitive advantage or economic moat. If the company didn’t have a competitive advantage then […]

Why passive investing and index tracking are not the same thing

stock market

Rob Davies of Maven Capital Partners looks at index trackers and finds they are not always as passive as you might think, and that passive investing does not always mean index tracking. Trying to describe a passive, index or tracker fund is a lot harder than it might seem.  Take a look at some excerpts […]

Is the Fundsmith Equity Fund’s performance sustainable?

Dividend Growth Chart

If you’re a keen investor then you will have almost certainly heard of the Fundsmith Equity Fund and its high-profile manager Terry Smith. To date the Fundsmith Equity Fund has produced results which are nothing short of spectacular – a total return of 100% in just over four years. But is such rapid growth sustainable? Dividend […]

Centrica’s dividend cut – How should shareholders react?

Question mark

This week I was mildly surprised to see that Centrica (which I’ve owned since 2012) had cut its final dividend as part of a plan to rebase the dividend some 30% below its previous level. It wasn’t a complete surprise given the recent collapse in the price of oil, but it’s the sort of event which […]