Vodafone sleeps on

Shares rise, shares fall and Vodafone sleeps. Some things never change.

I have gotten bored of having half my portfolio in this sleeping giant now. If you factor in the dividends for last year, capital growth was still under 3%. This is really holding back the growth of my portfolio. I need to switch broker accounts anyway so I am going to take the opportunity to halve my exposure to VOD. That’s right, I am going to sell all my VOD shares and then spend half the money buying back into VOD in another account.

Why buy back into VOD? Well I just love the company for some reason. They are a giant of the telecoms world and generate huge amounts of cash. I feel having a holding in them gives me exposure to an important growth area in the global economy – wireless communications. And one day the share price is going to rise...

What am I going to do with the rest of the proceeds of my sale? Some will go into Big Yellow Group (BYG) and some will go into Tesco’s.

BYG will be my first small cap purchase. They offer self-storage services in their purpose-built warehouses mainly in the South East UK. I have followed them for a while and they seem like a well-run business with a strong brand. Their price to net asset value (share price divided by value of assets per share) is about 1.2 and this gives a margin of safety. I think there is a lot of scope for growth as the company looks to expand into the Midlands and the North. There is a small dividend as well – always a healthy sign.

Everyone knows about Tesco’s – a huge player in the UK retail scene that is starting to grow abroad as well. It should be a solid performer.

I will be buying the shares using Halifax’s excellent ShareBuilder product. The charge for each purchase will be £1.50! The disadvantage is that the purchase date is set in stone so I just hope the shares don’t go up too much in the mean time.

Till next time.