SIF Portfolio: Bonmarchamp;eacute; Holdings could be a good look for 2018

My personal share portfolio is divided into two parts. Since earlier this year, one of these parts has loosely mirrored the SIF portfolio. The other part of my portfolio is focused more on value and special situations.

So I was interested to see a stock I’d considered for my value portfolio appear in the SIF screen this week. Womenswear retailer Bonmarché Holdings specialises in “mature” customers at the affordable end of the market. It’s a stock that’s appeared in my own value screens more than once, since running into trouble at the start of 2016.

This company also been covered comprehensively in the small cap value report by sector expert Paul Scott and most recently by Graham Neary.

Like Graham, I’m attracted to the cash-rich balance sheet and the high earnings yield (EBIT/EV) that has resulted from the group’s recovering performance.

Although Bonmarché shares have risen by around 33% from their mid-year lows of c.75p, the stock still boasts a low trailing P/E of 9.2 and a rolling forecast P/E of 7.1. One final temptation is the dividend yield of 7%, which has been maintained and looks increasingly well covered to...