|European Equity Tranche Income
||EPS - Basic
||Market Cap (m)
Real-Time news about Euro Equity (London Stock Exchange): 0 recent articles
|nickcduk: erstwhile2 - You seem quite knowledgeable about the market EET operates in. Perhaps you could help me with TRIO. Recently sold up all their investments and left with around $6.40 in cash versus a share price of $4.30. Here is what they said in their announcement last week:-
"The Company's Board will meet to consider options for the use of the cash
raised through this transaction, on recommendations from Wharton. Although
there may be potential opportunities for re-investment of the cash should the
market stabilise, the Company has a stated policy of returning excess cash to
shareholders. It is anticipated that a decision will be made by the Company's
year end, 30th September 2008."
I personally think they will return the cash but in the event they dont, do you think re-investment opportunities are likely to provide decent returns if they invest in distressed situations at present? I don't really know a lot about Wharton either. Have you come across them and could you please proffer an opinion?
Thanks in advance.|
|isa23: Erst, my sympathies are still with those who sold at 14 because a few days later the price rose to 27p. Share price went up on no news, no volume, no nothing, just as it is going down (and up again as I'm writing) on no news, no volume etc. My point: as long as you know what you're buying into, have a long term horizon, and your investment is only a small part of a well-diversified portfolio, you shouldn't pay too much attention to price movements and certainly not be spooked by people talking down the share price for the benefit of their own pockets|
|isa23: just called the asset manager & got the reassurance I wanted. The news this morning relates to just one quarter. Basically, if the level of prepayements exceeds a certain percentage in a given quarter(8% in this particular case), then the equity part of the mortgage (which ranks lower) recieves no income. This has happened last quarter, but there is no guarentee that it will happen next quarter, or the quarter after that etc. All the assumptions (15m euro charge to capital / 2m a year earning hit)are based on the worst case scenario of prepayments in Italy continuing to exceed 8% for the next 12 quarters (the next 3 years). I was told that such a pattern is unlikely. On that basis, the share price at current level seems to discount the worst that can happen to the Italian portfolio in the next 12 quarters! A screeming buy IMHO for those who can stomach such risks.|
|stemis: Well, looks like Investec have sold another 550,000. So of course the share price goes up!!|
|ilancas: anyone else out there not enjoying the share price decline?|
|simon gordon: Am I correct in thinking that if the Spanish property slumps, as some pundits expect, and some over leveraged 'wealthy' mortgage holders default the NAV will drop, thus hurting the share price?
If this is possible are not the Spanish holdings more risky to EET than the small British tranche.|
|davebowler: 1 August 2007
EUROPEAN EQ.TRANCHE INC.* [Buy]
EET.L / 51.00p / £51.00m
European Equity Tranche Income will maintain quarterly dividends of EUR 0.02 and grow its NAV in our view. This equates to an annualised euro dividend yield on the current share price of 10.6%. We also expect the 20% discount on the fund to narrow as the market starts to recognise the stability of the underlying assets and income stream.
The attached company announcement (published yesterday) details, for the first time since launch, information on all investments made to date including the average loan to value ratio for each investment and the seasoning (the weighted average age) of each underlying mortgage pool. Both the age of the pools and the loan to value ratios should give investors comfort in our view.
This information has hitherto been withheld in the interests of keeping such information from EET's competition while EET was building its initial portfolio which now comprises 13 investments just one of which is in the UK, representing just 6% of net assets.
EET sold in one Austrian investment for a profit in mid-July which should give comfort to investors that valuations are realistic, based on conservative assumptions and have not been affected by developments in the US.
We have now had a series of updates:
The company has repurchased 2 million shares thereby enhancing the NAV and demonstrating the board's confidence in valuations.
An independent director has recently purchased shares. (Chairman, Robin Monro Daives already has a holding of 500,000 shares)
Ocean Capital Partners has increased its exposure.
A quarterly dividend of 0.02 EUR has been declared as expected and we fully expect EET to pay out dividend of at least 0.02 EUR per quarter going forward which offers an attractive prospective annual yield of 10.6% on the current share price.We also see decent prospect for capital growth.
The portfolio is reported to beperforming in line with or better than expectations.
The portfolio is now well diversified geographically and is exclusively exposed to prime pools of mortgages - primarily in countries where consumers are less leveraged, where loan to value ratios are attractive and where the loans are well-seasoned.
EET has no exposure to sub-prime pools.
EET is probably the only fund of its kind to have reported a positive total NAV return since launch (even after allowing for 2.7% Italian loss).
A discount has emerged reflecting indiscriminate selling and we recommend buying the shares at current levels.
Target price: 65p (~27% above the current share price)
Tom Tuite-Dalton, 020 7012 2012, [email protected]thnot.co.uk
Specific disclosures for European Equity Tranche Income:
Arbuthnot acts as broker for European Equity Tranche Income
Arbuthnot has agreed to publish research at least annually on European Equity Tranche Income
Arbuthnot acts as a market maker or liquidity provider for European Equity Tranche Income|
European Equity Tranche Income share price data is direct from the London Stock Exchange