Pam Stebbings helped found an all female investment club with a group of twelve friends in 2000. Since then they have built up an investment portfolio that today is worth almost £140,000. This is quite an achievement, given they started investing £30 a month, which has now increased to £40.
Pam says: “We’ve been going so long and get on so well we would not now be looking to accept new members.”
She says the club is run along “very democratic” grounds. Each member is responsible for monitoring the performance of a number of shares in the portfolio and reporting back to the group. Those proposing new investments or to sell existing holdings, have to present their reasons to the group, who will then vote on a course of action.
The members, who are now mostly retired, draw on personal experience, as well as using various online resources to research potential investments.
“We’ve a lot of life experience having worked in different industries and withfamilies working across various sectors. This helps inform our decisions.
Asos and Fevertree
“For example we were an early investor in ASOS (ASC), the online fashion retailer. One of us had a teenage daughter, and noted how popular this site was with her and her friends, so we decided to invest.”
The group made excellent returns on this investment initially. However they decided to take some profit after a relatively short while. Pam says that with hindsight they could have held their nerve and invested for longer.
Another similar purchase was in the drinks manufacturer Fevertree (FEVR). This was bought when it was just a penny share. A member read that Tesco appeared to have fallen out with Schweppes, and this brand was on their shelves instead. Someone else saw Fevertree in Waitrose, and at the same time another member took a BA flight and noted all the mixer drinks there were Fevertree too. So they took a bit of a punt, Pam says. “At one point it was worth nearly £40 a share. It has fallen back to around £25 but it is remains one of the group’s best-performing shares.”
As a qualified accountant, Pam had some experience of investing before starting the club. However she only started investment more seriously in retirement.
Most of the group were in their fifties when they founded the investment club, with older children, about to go to or leaving university. “We all had a bit more money to invest, and this seemed like a good way to learn more about the stock market, while meeting up on a regular basis.”
Social Investing
The members take it in turns to host the monthly meetings, and as well as discussing P/E ratios and dividend covers, they also enjoy a good meal and a glass or two of wine.
Given the size of the investment club’s portfolio, Pam says the club can afford to be “a little bit frivolous” at times and go with a few hunches. As well as a number of FTSE 100 companies, they have also invested in a number of Aim shares. Not all have been successful but some have done extremely well.
Good investments in recent years have included Ocado (OCDO) - the best performing UK stock since the Brexit vote - and Reach (RCH), a newspaper advertising company which has expanded successfully online.
Another penny share that has done well is Genus (GNS), a biotechnology company that develops animal genetics. This company has effectively developed technology that allows them to freeze and transport prize bull semen. They have now developed semen to produce only female calves and are hoping to expand into the pig markets in China.
This has been another penny share investment that is has performed well for the club, and is now up 150%. According to Morningstar data investors in Genus has enjoyed total annualised returns of 27.47% over the past five years.
Large Cap Dividend Payers
But the group also invests in some larger companies too, particularly those that have a good track record of paying dividends. For example they’ve invested in drinks manufacturer Diageo (DGE) and FTSE-listed chemical company Croda International (CRDA). This company produces chemicals that go into cosmetics and cleaning products. Although it is a British firm 60% of its sales are generated outside Europe.
This latter stock is the club’s longest standing holding. Pam says: “We’ve held this share from the start, though have taken some profits along the way and topped up our holding at other times, but it has delivered good steady returns for us and it pays a very reliable dividend.”
The club invest through Interactive Investor, and use ProShare software to help manage their holdings. Pam says this software has been invaluable when individual members want to take profits or cash in some or all of their holdings.
She says: “We have certainly had some successful years. We have even been featured in the national press for being one of the best-performing investment clubs, where it was reported we outperformed around 95% of fund managers.
“We’ve learned a lot over the years by being part of this club, from both our our mistakes and successes. One of our first investments was in Marconi, which went bust within a year. But it’s been onwards and upwards since then.”
