Since Kerry Balenthiran bought Maintel, the shares have fallen 22%, but instead of cutting his losses, he's averaged down.

Kerry Balenthiran writes the ValuableGrowth blog in which he documents the trades and methods of his ValuableGrowth portfolio. He owns shares in Maintel Holdings.

Investing is a tricky business and requires considerable effort if you are going to be successful. That doesn't mean you can't be a successful private investor in your spare time, what it does mean is that you can't just park your money in newspaper tips or a share that you've read about on a blog and expect to consistently make money.

The single most important thing that I have learnt is that if you haven't done any research to back up an investment decision, then at the first sign of volatility you'll be questioning what you have done. The voices in the back of your mind will get louder and louder and could end up with you selling your position. As I have said before, you need to have real conviction when buying a stock and that conviction will keep you in during market sell offs, unless the facts around that stock change.

Maintel Holdings (MAI) is a UK telecommunication provider of voice and data solutions, delivering maintenance support and professional services to businesses throughout the country. Maintel has more than 100 specialist engineers working across 10,000 client sites throughout the design, implementation and maintenance support process.

I first started watching this stock at about 260p last year. During the Euro-zone panic in mid 2011 the stock fell to 210p, I decided that MAI wasn't for me at that time. This was an irrational decision based on market sentiment alone, the Euro-zone panic had me on the sidelines and not just with MAI.

Once the panic subsided and MAI reported its results the share price recovered and went to 430p. It was at about this point I decided to launch the ValuableGrowth portfolio and I decided to buy MAI as one of my initial holdings. Terrible timing as it turned out.

MAI has a P/E ratio of 11.8 (forward P/E of 9.1) and a dividend yield of 3.9% that is nearly twice covered. Earnings are forecast to grow at 29% for the 12 months to 31/12/12. Just like SpaceandPeople which I wrote about last month, for a company that is forecast to grow its earnings by 29% year on year, a P/E of 12 seems a bit on the low side.

MAI is an AIM company with a market capitalisation of only ''35m and therefore it is of limited appeal to professional money managers. However, there are profits of ''2.1m on ''25.9m of turnover, net cash inflow from operating activities of ''2.4m (primarily used to buy a subsidiary and pay the dividend) and a dividend paid of ''1m. There is no debt and ''2.9m in the bank (as at 31/12/11).

Like SpaceandPeople, MAI is a small company that we don't know much about. Again this is where the opportunity lies. One of the founders of Maintel is a director and has a significant shareholding, this should hopefully ensure that shareholders interests are aligned with directors actions. MAI has also consistently grown its business during the recession, it's highly cash generative and well positioned to continue to succeed.

If you look at a chart of MAI's share price you'll see that the price subsequently dropped to 330p, a fall of 22%! I used this drop to increase my stake having checked that there was no specific company news that contributed to this fall. The same factors that led to my first purchase still apply and with the share price fall the dividend yield has increased too.

Who knows what will happen to the share price prior to the half year results being released in September 2012 but the dividend means that I am paid to wait. That's why I like dividends.