Lindsell Train Investment Share Discussion Threads

[giltedge1] 25/4/2024 12:34

Yes ULVR up today, looked a bit cheap. But SDR & DGE down has been the problem last few years good gains wiped out by fallers. Of the portfolio HL £7.50 & BURB £ 1148 (not held by LTI, but by Funds) look the two most beaten up, so more likely to rise.

[essentialinvestor] 25/4/2024 11:01

ULVR may be towards the beginning of a nice re-rating. DGE looks more problematic atm.

Can NT deliver outperformance in a post ZIRP environment is the question.

[giltedge1] 24/4/2024 15:33

ABDN & Jupiter have announced increase in AUM YOY March 24, both considered poorly managed in the city. We have gone from 18.5B to 15.3B -18% in comparison!. So -3B, there is some market gain in there, so assume -4B withdrawn by clients. Can't see this changing any time soon, with Witan AUM going soon. ML Japanese fund lamentable, any normal employee would have been sacked, but as an 'owner' has kept his position, anyway not long till all funds drained out I think down 50% at half year. I have been 'fire fighting', got out of ULVR (held for 10 years) at £40, DGE £30, SDR £ 4.20, & FGT £8.50, all good profits, left with LTI down 20%, although sold some at £1500 in the good old days. Can't quite pin down main reasons for poor performance last 5 years, not selling at highs, Paypal $200 was a give me, HL at £22, & ULVR up to £ 50, come to mind, selling Pearson at the time was turning around. Another reason Including UK shares, quite a good percentage in the Global Fund seems odd, as reason for Investors going into Global Fund is diversification from UK. Anyway deciding what to do with LTI is hard to take a loss, but can see AUM continuing the decline & dividend cut. All we hear is need to raise salaries so staff won't leave. What so if not, they can underperform elsewhere?. Any thoughts of turnaround, or moving elsewhere as fully cashed up.

[mozy123] 24/4/2024 09:19

Cheers Steve.

[steve3sandal] 23/4/2024 19:34

LTI hold the Heineken holding company HEIO I seem to recall. It’s effectively at a discount valuation to the trading company.
I also have Nintendo in my notes as 7974T the share listed /traded in Japan. It was 7475 Yen last night.

[mozy123] 23/4/2024 14:42

Anyone know which Nintendo stock LTI owns?

Anyone know which version of the Heineken shares we own - HEIA or HEIO?

[flyer61] 22/4/2024 10:06

Agreed, all to play for. Market cap is highly liquid portfolio of Blue Chips plus our share of the cash on the LTL balance sheet. No value attributed to the FM whatsoever. Has to be value in here somewhere!!

[giltedge1] 22/4/2024 08:41

Flyer61

My calculation on 12B AUM is on simplistic 30% salary cap, 20% tax & 100% dividend. Of course unlikely as salary 2023 £30m, sure they will try to increase cap. A fight with shareholders over salary cap will of course further depress share price How can you justify AUM falling for 22B to 15B & asked for a pay rise?. My guess muddle through NT/ML won't take a salary after all receive sizeable dividend,until better times. Anyway trying to be positive with blue chip portfolio & AUM 15B, if we can stabilise, & increase slightly the key.

[cc2014] 21/4/2024 11:12

Looking at EMG update I'd say the LTL AUM is still under pressure due to continuing withdrawals

[flyer61] 21/4/2024 10:06

Did anybody take a look at ATY and SVM.....would love to read your comments..

[flyer61] 21/4/2024 10:03

giltedge1

I am trying to be forward looking here so where we differ is I have let the salary cap rip. whilst this may not upset our NAV it will upset the dividend. It will no doubt increase many peoples BP as well.

Can I check your £40M profit is pre tax or post tax and have you factored the payout ratio is not 100% as dividend. That cash pile needs to keep on getting bigger!

If you are right for £12B AUM then I'd expect the dividend can be maintained. The 64 dollar question (ironically that equals £51.50 :-))) is when will the LTL AUM stabilise.

The share price is saying no time soon.

[giltedge1] 20/4/2024 20:20

Flyer61

I modelled at 12B AUM fees = 60m, salary cap 30% fixed costs 5m interest income now 3m = £40m profit so about £8m for LTI dividend.

Assuming salary cap held. There are 30 staff including admin & marketing. Sorry to hear £1m each not enough, maybe we can have a collection to top up! for those poor souls.

May I suggest something outrageous improved investment performance to increase AUM, then we can all celebrate.

[flyer61] 20/4/2024 11:40

giltedge1

I have modelled for a drop in AUM to £12B and I come up with an annual dividend to LTIT of £4.5M. The last year end accounts we have for LTL are back to 31 Jan 2023 when they had £18B under management. It is only through the largesse of Mr Lindsell and Mr Train that the value of our stake in LTL held up. They took an £11M paycut between them. No wonder the market has walloped the share price....they are hardly likely to do it again. Raising the salary cap based on turnover will hurt us ergo the discount. Even though the NAV maybe based on a higher expense ratio it is cash that would be disappearing which of course contributes to our dividend.

He is not on the BOD here so with the new 90% of shareholders requirement for change he can say say the independent board agreed to it.

At £12BAUM £4.5M plus say £3.5%M of other divi income = £8M minus £2M for fees and you are left with £6M as a dividend. 30 pounds per share. At £790 a yield of 3.8%

Thankfully we are not at £12B AUM......yet....

Sticking with they will hold it at £51.50 but if the runes for the FM business still remain dire then £40 pounds it is.

Ironically if the US tech market keels over then the underlying assets here should be a good place to be.

If you want to have a look at fee structures and performance take a look at these two colusses of the UK FM industry. SVM and ATY. Have a read of the annual report, particularly SVM and have a look at how well they have done with CFD's. How they keep a straight face is beyond me. As Spec would say....where money goes to die...or to pay for a FM Scottish estate....

[giltedge1] 19/4/2024 16:08

Hello Flyer61, as mentioned previously portfolio holding up LT AUM decline doing the damage. Can this downward trend in AUM be reversed?. I am usually an optimist but I can't see a sudden reversal!. Have you stress tested dividend in case of further falls in AUM, say fall to £12B for example.

[flyer61] 19/4/2024 09:33

Thanks giltedge.

We will have to see if the new Chairman has anything about him. There are many things they could do to close up the share price to NAV.

I bought at £790 this am. Whilst I am overall still down my average is now not much above £800. Lucky these have been bought for the rest of my natural!

[giltedge1] 17/4/2024 20:35

Re last year AGM dismissed any requests for buy back even though authority in place. Negative on any thoughts of share split, even though LT completed one. Both would have been greatly appreciated by shareholders. I suggested global fund should get out of UK shares & concentrate on USA winners eg FICO (right call as it turned out in 2023) Doesn't make sense for UK & Global to have same holdings as we subsequently found this year DGE held back both funds. Had the impression LT way the only way.

[flyer61] 17/4/2024 10:06

GE!....curious about your comment

'had negative vibe at last AGM'

would you care to elaborate...

[fabius1] 17/4/2024 09:47

EI - I am sure you spotted that FGT is sitting smack bang at the top of the old long term channel before it finally broke through into a new range in Nov 2014. It broke down through that support this morning and has now retested and is holding above for now. Some largish trades went through yesterday and we know that FGT has accumulated a large chunk of buybacks which have not been cancelled and are held in treasury. Clearly, the fund would appear to have a guardian angel :). Let's see how it fares over the next few days.

[essentialinvestor] 16/4/2024 23:34

I added a small amount of FGT today,
Of late it tends to get hit hard on equity wrskness,

[fabius1] 16/4/2024 23:12

giltedge1 - Funny, I had this feeling the CEO was a 'her' when I was typing. Oh well, can't win them all. Interesting comments. Only takes a trigger to unsettle febrile markets and the view can change very quickly.

[giltedge1] 16/4/2024 22:18

Hello FABIUS1, I agree on ULVR/DGE holding back performance posted the same comments a few months back. Just to clarify DGE ceo a 'her'last I read, Debra Crew. ULVR takeover £110B so north of £40. Of course makes 5 years NAV look bad for LTI funds, due to ULVR price spike back then. LTI policy to maintain capital over long term, so both shares last 20 years up over 5x, including divs so meets criteria, last few not so good, depending on reference point.I know some old timers who paid single digits for both, so whether 35 or 40 for ULVR not concerned as long as keep churning out divs. Would,t discount either ULVR starting buy back soon, DGE strong brands I was buying Johnny Walker & Gordons gin 40 years ago still going strong. Admit this year tough for LTI due to falling AUM. Managed to exit ULVR, FGT, SDR for good gains as doubling up with LTI. Unfortunately didn,t sell LTI, had negative vibe at last AGM but fell into 'loss aversion' psychology. Live in hope but need turn around in ULVR, DGE, SDR & BURB, & new chairman to shake up. LT still very profitable at £15B AUM.

[fabius1] 12/4/2024 10:26

Flyer61. Just my own take on a worst case scenario, but either way, it always makes sense to keep some powder dry for opportunities and those rainy days :).

[flyer61] 12/4/2024 10:14

Thank goodness we are not far off buying ULVR and DGE here (LTI) at the prices you are mentioning Fabius1!

I agree with you about DGE as I exited my full position at £37.

Overall you are reassuring me about having LTI as my largest holding!

[fabius1] 12/4/2024 09:58

giltedge1 - Yes, it has been bouncing off @£792 but the price trend is down. Stepping back from this for a moment, if we look at two key constituents of LTI (and many funds for that matter), Unilever & Diageo. ULVR - good brand but in the process of sorting itself out after a few years of neglect. My target is @£31 ish. Long term channel support,key support area and more realistic price to cash flow etc. let's not forget that W Buffett made an offer at @ 32.74 (I recall) back in frothier times before beating a hasty and embarrassed retreat. However, that might come into play when it is well known that he is less than sanguine on current market valuations balanced against a shortage of good value potential portfolio acquisitions. DGE - A 'brand of brands' driven by a good but 'charismatic' former late CEO and a series of acquisitions but really a bit of a debt junky and now facing a headwind of higher costs of capital and a new CEO who has yet to earn his spurs in testing times. Long term channel support and historic support area suggests @ £21 ish on the back of questionable price to cash flow etc. Now those price targets represent @ 20% corrections. On a macro basis, cross reference the correlation in percentage terms and you get @ £643 on LTI and @ 326p on the bellweather CTY although I would settle for 300-280p or so. By the way, I am not a chartist but it certainly helps with joining up the 'possible' dots.