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Aurora Inv.Tst. Share Discussion Threads
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|Tempted to call this the single most over-rated IT on the market, but realistically it's only Top 5.
Cannot understand who'd want to pay a premium (& an annual management charge of 2.58% according to HL, though I think that's wrong) for a Trust with so few holdings - just buy them yourself! If you believe Barratts, Bellway, Lloyds, Tesco, SPD, JDW, MRW, GSK, Vesuvius & Hornby are good buys, then buy them, don't buy ARR. That's 89% of the portfolio covered (inc 5% held in cash), and would give you a much better yield. Then just keep an eye on their Top 10 for changes, there's unlikely to be many.
Sports Direct, lol.. Tesco also highly dubious (the claim "Buffettology" - Buffett got out), & Lloyds is a long after the govnt sell down, not before IMO. Hornby I don't follow, Vesuvius I like, Glaxo is over-distributing and has become one of the "bond proxies" that won't be this high indefinitely. The housebuilders I like but not for a quarter of the portfolio. They're deep value but they can't run on forever. I keep hearing how we're not building enough houses but hear very little about how that was the case when the housebuilders were 90% lower. Sure, they won't get done by debt this time - IMO it'll be either input costs (labour, already in shortage, going to get much worse nearer to Brexit) or adverse legislation (eg forcing land with PP to be built on, not land-banked).
And all that, for an 8p premium? Strewth. NAV 161.7p, yours for 171p.
Edit - no, they really do charge 2.58% pa, and worse:
"The ratio is calculated excluding finance costs but including operating expenses charged to capital and applied to the average NAV of the year. Expenses of a type not expected to recur under normal circumstances are excluded from the calculation"
So potentially even higher in reality. About the only arguments for ARR are 1. You've no time to monitor your portfolio (though ARR claim very low churn); 2. You're investing tiny amounts, where the fixed commission charge on buying the Top 10 is outweighed by the single commission on buying ARR at a premium, but even that doesn't apply if you're a long-term holder: -2.58% pa will really eat into returns.
Edit - and I accept the argument that if you buy on a premium, but also get to sell at the same premium, then in some ways it's irrelevant. But it's not irrelevant to the portfolio yield, nor the risk that a premium becomes a discount when you come to sell.
To give an example of the effect of 2.58% charges (and they're at least that, more likely higher):
Assume everything grows at a very tidy and consistent 10% pa compound, 100k invested. Buying the shareholdings individually:
£259k after 10 years.
Buying ARR, ignoring the premium:
199k after 10 years
So a £60k difference, or 60% of the initial amount invested, just for a 2.58% charge. And that's after only 10 years. (Yes - I've ignored the extra commission costs, say £100 vs £10, with a change or two each year. I've ignored the effect of tax on the divis, and the cost/hassle of reinvesting where those holdings don't have a reinvestment scheme. But £60k!! Also, if you're putting the 100k into ARR at a premium, you're getting more in yield buying the holdings, which would cover some extra commissions to reinvest).|
|More insight into Aurora's new philosophy in a detailed 2 page article with Aurora director Tristan Chapple, in Shares Magazine this week.
Some points from the article:
* New IM took over the fund in January 16 and cleared out all the small illiquid stocks and has already replaced them with a portfolio of stocks more representative of their value investing style,‘Aurora’s portfolio today is a Phoenix portfolio.’
* ARR scan the market for quality companies trading at what they consider to be half their 'intrinsic value'. Can take many years for firms to reach this target valuation, consequently ARR has a concentrated portfolio of just 15 stocks at present.
* ARR would be quite happy with a market wobble caused by Brexit or other event ' Crisis is opportunity for us' says Chapple.
* Biggest holding currently is LLOY @ 13%, followed by Tesco (11.8%) and BDEV @ 9.2%|
|I took a small long-term position in my SIPP yesterday @ c.167p, partly to ensure that I should be able to take part in any forthcoming rights issue, which has already been flagged by the new management team, to bring the market cap up to circa £50m.
For me, its the perfect SIPP stock, that I can hopefully just leave for the Manager (and time!) to do its thing...|
|Felt a new beginning deserved a new thread...
Aurora Investment Trust plc is a listed investment company formed on 13 March 1997 and domiciled in the United Kingdom. With effect from 28 January 2016, the Trust is managed by Phoenix Asset Management Partners Limited ("PAMP").
Gary Channon, Manager of the Phoenix UK Fund since 1998, will run ARR. His Phoenix UK fund, is an Institution-only fund, that has increased its NAV by 416% since launch, with an investment return of 706% (12.5% annualised). He will take charge of Aurora and plans to replicate, as closely as possible, its offshore, existing Phoenix fund.
The Manager's Investment Approach is 'long-term, value-based and focussed' and is inspired by Warren Buffett and Phil Fisher. ARR will be a concentrated portfolio of high conviction stocks, held for the long-term: hTTp://www.aurorainvestmenttrust.com/Investment-approach
Dividend Policy: It is a requirement of HMRC that an investment trust distribute at least 85% of its net income and we intend to comply with that minimum. Therefore the dividend will be a function of the dividends paid by the companies we own and the Trust cost base. We will make no attempt to smooth or flatter the dividend
Cost structure: The manager will not charge any admin or basic management fee of any kind. Instead there will be a performance fee (1/3rd of the out-performance (over the FTSE) paid in shares to the Managers), but with a 3 year clawback period if any of that performance is given back. In other words the Manager will only make money if he does well on a rolling, long-term basis; so interests very much aligned with shareholders...
At 166p, the current market Cap of ARR is £20.1m, which the Manager admits is too small, so there will be a rights issue / open offer of sorts in the near future, to raise the market cap of the company to c.£50m.
More details from the Company website: hTTp://www.aurorainvestmenttrust.com/About-Aurora
A short introduction to the 'new' Aurora: hTTp://www.aurorainvestmenttrust.com/Aurora-Primer
A table of the Phoenix Fund's impressive track record: hTTp://www.phoenixassetmanagement.com/Track-record
Excellent MoneyWeek video interview with Gary Channon, March 2016: hTTp://moneyweek.com/gary-channon-the-three-things-i-look-for-when-buying-a-company/|
|The rise in GCM today must have added about 1.5% to NAV
2m shares, +17p = +£340k approx|
|Interesting stock with internal gearing.........NAV discount was c 20%, waiting for NAV update, last 17th Jan.
This is a"risk on" market stock that has been volatile but looks interesting again IMHO......no ramp intended.|
Ariana Resources (LON:AAR) said surface sampling of the Karakaya vein on the Kepez project in Western Turkey has identified higher than previously anticipated concentrations of silver.
Rock chip and float sampling revealed the average grade was 65 grams per tonne of the precious metal to a maximum of 277 grams per tonne.|
|Why five years MOTW? I may be wrong but many investors nowadays buy and sell when they make a resonable profit. This might be in weeks or months. I think the days of buying shares with the view of keeping them for five years are long gone.
Personally i bought these within the past six month and am looking at a 20% return on my investment. I think James Barstow and his team are doing a great job and we appear to be in good hands. Personally, I am considering selling my shares but feel a price target of 250p is achieveable first.
Best wishes to all holders.|
|Its the five year figures that matter... u are better off buying capital gearing trust in my view...|
|In September issue of Money Observer this IT is ranked top of UK Growth sector for one, six and 12 months. James Barstow must be doing something right. No position yet but minded to make small purchase.
|I guess you are right if the review leads to a buy back to close the discount. Yes I hold some.|
|MOTW, The share price keeps going up (today anyway). Even if Richard Martin is not independent, surely it is a good thing that they have review. The market seems to think it's a good appointment.
Do you hold shares in Aurora IT?|
|I would agree with you BUT Martin is clearly not independent. He is mates with Alex Hammond Chambers - they are both on the Board of MTE.L and they are even meant to be members of the same Edinburgh gents club...smacks of a whitewash appointment to me... more gravy for the boys, paid for by shareholders. Take a look at the discount chart for ARR.L on Trustnet...its wide and its widening further... and will the Board care...I doubt it.
It's quite interesting to see what people say on this website http://thessoe.blogspot.com/|
|I welcome the appointement of an independent strategic review and the appointment of Richard Martin who I am sure will be a valuable addition to the board. I think its always a good thing to have independent assessments which can ultimately lead to a risk assessment of the portfolio and a higher return to shareholders.
I believe the current board and fund manager are well placed to give shareholders an excellent return on their investment. We should see a chart break out soon.
Not sure if anyone else will actually read or comment on here.
Would be nice to get some more views from people who have been following this company.|
|The Chairman's Statement for 2010 says he won't "march to the top of the hill and march back down again".
After a fairly good period of outperformance it sadly looks like he's now doing the reverse and we're on the way back down the hill to underperforming...|
|nOTJUST THECHART.....LOOK AT THE DECLARABLE HOLDERS.....AND THE SURGING ASSET VALUE!|
Look at the chart.|
|This company seems to be in a terminal decline. I believe they heavily invested into commodoties stocks which are collapsing daily.
I know most stocks are falling rapidly but these have halved in the past month!!
Does anyone else have any opionions on ARR.|
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