Here’s what Neil Woodford bought and sold in October

UK stockmarkets rose about 1.6% in October. That’s not always been a good indicator of how Neil Woodford’s suite of funds and trusts has performed, but this month both the Income Focus and Equity Income funds generated positive returns.

UK-focused housebuilders Barratt Developments (BDEV), Redrow (RDW) and Bovis Homes (BVS) were behind much of the gains at Income Focus. Woodford thinks the good times should continue to roll “not least because of the support for the industry that we expect to come from a government that is keen to help more people to buy their own home”.

Technology services business Softcat  (SCT)and bombed-out doorstep lender Provident Financial (PFG) also did well, the latter amid evidence that management action is turning the business around. That offset losses at Imperial Brands (IMB), which baffles Woodford. Only explanation is that the shares are just “out of favour”.

In and out

Woodford added Ten Entertainment (TEG) to the portfolio last month. It’s the second largest ten-pin bowling operator in the UK and currently offers an anticipated yield of about 6%. “The starting valuation looks very attractive,” Woodford says.

He’s also bought more shares in power station operator Drax (DRX), logistics firm Stobart (STOB), kettle safety controls firm Strix (KETL) and Provident Financial.

Out goes specialist asset manager ICG after recent outperformance – the shares are up 25% in the past 12 months.

After going ex the estimated 1.3p per share quarterly dividend earlier this month, Woodford says the fund is on track to deliver at least 5p of income in its first full calendar year.

At the Equity Income fund, returns were “modestly positive” in October, led by a bounce back at Spire Healthcare (SPI) following an “opportunistic” takeover bid from Mediclinic International (MDC).

In terms of activity, Woodford kept topping up his stake in greetings card chain Card Factory (CARD). That followed “a positive meeting with the management team early in the month which augmented our conviction in the long-term investment case”.

The fund also bought extra shares in Barratt Developments, British Land (BLND) and Capita (CPI), paid for by proceeds from the sale of mid-caps Equiniti (EQN) and Lancashire Holdings (LRE).

We’re told it was a “challenging month” at the Woodford Patient Capital Trust (WPCT) despite “meaningful operational progress across a number of holdings”.

“Although this has not yet been reflected in share prices, we remain very confident that ultimately it will be.” Woodford says. “In the meantime, we understand that investors may feel impatient at the lack of NAV progression. However, we would remind investors of the long-term nature of this investment vehicle and the length of time it can take early-stage businesses to mature.”

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.