CCL Stock – this unexpected pandemic winner has got ahead of itself and it’s time to sell
Update: Hill & Smith
The rise in the share price of Hill & Smith, which makes “street furniture” such as crash barriers, has been a less dramatic 17.1pc since we tipped the stock in March last year following a conversation with Mr Widdowson.
However, the shares had enjoyed a good run beforehand, which prompted us to advise readers to “buy on weakness”. Their further rise since then has persuaded the fund manager to sell his stake and to reallocate the proceeds to other opportunities.
Do we need to follow suit? Mr Widdowson said Hill & Smith remained a well-run business still able to offer steady compounding of future returns. Readers happy to own this type of company can certainly hold on.
Questor says: hold
Share price at close: £15.34
Another fund manager who has often contributed to this column has had to part company with a long-standing holding: Job Curtis of the City of London investment trust has sold his remaining stake in Carnival, the cruise line laid low by the virus.
He said: “Unfortunately, the investment case was undermined by the pandemic, even though Carnival’s shares have doubled from their lows. I am concerned about the rising level of debt, which grew on a net basis from $11bn at the end of November 2019 to $18.9bn a year later. It is estimated that Carnival is currently burning through cash at a rate of some $500m a month.
“Clearly there will be an improvement from July when sailing begins again although there could be some initial restrictions, such as on the number of passengers. I have come to the view that the resumption of Carnival’s dividend is some way off and it may need to raise money again by selling new shares.
“I have reinvested the proceeds across City’s portfolio in stocks with more certain dividend prospects.”
Questor says: sell
Share price at close: £15.52
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