3i Share Discussion Threads

[truffle] 07/10/2024 14:20

FWIW my thoughts are as follows;

- Been a shareholder for many years and 3i Group has performed excellently over time
- Its track record suggests it is not the sort of company that would willingly allow itself to be prone to outside short sellers
- If it has an investee weighting problem such as Action, albeit a 'positive' one, then I am confident it will address the problem in good time.
- Simon Borrows comes across as a really good CEO and he/3i Group have consistently delivered excellent value for shareholders over many years

That all said, taking some profits from time to time is good practice - I did so some time ago at £24/share - but I remain a long term holder

All IMHO

[craftyale] 07/10/2024 13:22

Sp moving up again nicely. User Shadowfall has removed its post. I took the news and subsequent share price reaction to purchase 200 more shares at 3264. Is Shadowfall already under water, we go exdiv end of Nov.

[roguetraderuk] 04/10/2024 14:35

they are still planning to open a lot of stores across europe. there are plenty of jobs ads looking for fitters for their shops. i think the stories can run but at some point the multiple on the valuation will need to be lower to reflect lower expected growth. that however is some time away. i would only revisit this view if they tried to move into the uk, but it appears they arent planning to touch it thankfully.

[steeplejack] 01/10/2024 11:53

Fair points.The UK is fiercely competitive compared with Europe.I missed out on B&M and that was despite shopping there some ten years ago and being impressed then by the approach.Thing is,i don't think Action is anywhere near saturation point when it comes to new geographical opportunities on the continent.I've sold a few 3i but i'm going to hold the balance.

[roguetraderuk] 01/10/2024 11:37

steeplejack i sold out a lot earlier on the basis that competition would make it more difficult to keep the returns going. but with scale comes buying power and they continue to offer average quality products at low prices or lower quality products at even lower prices. its stuff that you need now that doesnt make sense to buy online. i would also suggest that while they currently have no plans to, if they were to make a move on the uk, thats when the story could unravel as competition there is v fierce from b&m and others. i think they have been boxing clever so far and avoiding fights (heres looking at you aj) and europe is still pretty fragmented. so if valuation is all its about i think matthew earl is going to miss on this one. at some point but not yet id guess but its still fair to say a lot is in the price but i wouldnt go any further than that.

[blippy3] 01/10/2024 11:21

3i reported in July: "After the quarter end, Action successfully completed a refinancing event, raising €2.1 billion, as well as a capital restructuring with a pro-rata redemption of shares. 3i used €821 million of the €1,374 million gross proceeds received to acquire further shares in Action, increasing our gross equity stake from 54.8% to 57.6% ... We have allocated part of the proceeds from this transaction to increase our holding in Action, which we believe will benefit shareholders in the months and years to come."

That would seem to indicate that 3i thought there was plenty more juice in the tank.

[steeplejack] 01/10/2024 11:06

The Times article does not consider Action's valuation to be 'unreasonable' but points out that the holding now accounts for 60% of 3i's portfolio compared to just 10% back in 2013.It depends when you joined the party but clearly the suggestion that one should take a few profits is probably prudent.(Thereagain,you could of made a cogent case for top slicing when the 3i share price was ten pounds lower.)

[anhar] 01/10/2024 10:53

Whilst I have no idea if the valuation of Action has been seriously over stated, I'd agree that it would be very useful to have an idea of their exit strategy from it, in view of how massive a proportion of their portfolio it has become and has been for some time now.

[steeplejack] 01/10/2024 10:45

The article has a brief but useful analysis of Action.Somewhat surprisingly,theres no mention of Action potentially listing and that possibility clearly contributes to 3i valuation premium.Below is the summary.




Times analysis,business Tuesday 1 Oct


Should investors be worried?
Short interest in 3i still remains low, at under 1 per cent of its stock. The shares did slip 3 per cent on Monday morning, though more detail may yet emerge around the logic behind ShadowFall’s bet against the stock.
At the very least the saga should serve as a reminder to shareholders that 3i’s enormous position in Action means its shares have effectively turned into a proxy for the Dutch retailer. 3i has become so lopsided that it has little in common with the more traditional investment trusts listed on London’s market.
Action is a nice problem to have, and 3i is more broadly supported by £1 billion in liquidity, relatively low gearing and some other steady compounders in the portfolio. But its unusually high allocation to a single company means a misstep at Action could knock 3i shares off course. This is an uncomfortable truth that investors must be mindful of, especially given that despite its impressive track record and size, Action cannot lay claim to any particularly wide moat to guarantee its growth in new markets. Since this column rated the stock as a buy in May last year, the shares have delivered a total return of 88 per cent. While 3i has no discernible exit strategy from Action, and its concentration continues on its steady upwards trajectory, investors may be minded to start taking some profits.
Advice Hold
Why Concentration risk is becoming too big to ignore

[chc15] 01/10/2024 09:38

The Times having a go at 3i again today, seems an easy target. I'm waiting to buy more.

[scottishfield] 30/9/2024 09:52

III Director buys 16k at 3268.87p.

[chc15] 30/9/2024 09:08

Yes it has, with the large buying by WCM and Capital Group. Are they wrong or shadowfall correct?

[riverman77] 30/9/2024 08:52

While Action is a great business, I thought this was looking overvalued at £20 so tend to agree with the short seller on this one. Feels like the rise over the last year has been largely momentum driven.

[steeplejack] 30/9/2024 06:06

Very true and as i wrote that the stock had been 'walking on water',my concern was that the shares could well suffer a correction and have thought that since £30.

[eigthwonder] 29/9/2024 08:40

More a comment on valuation than fundamentals I think. But it does highlight a good point…when investments start being described as “painless̶1; and stress free we are on the threshold of complacency, and complacency is often the forerunner of more difficult times.

[steeplejack] 29/9/2024 07:14

"Short-seller ShadowFall Capital and Research has taken out a multimillion-pound bet against FTSE 100 private equity group 3i on the basis that the star company in its portfolio, the European discount retail chain Action, is significantly overvalued."Sunday Times business section article 29 SeptThe gist of the bear argument is that Action has benefitted from inflation which is now receding and that 3i are overvaluing Action in the books by industry comparison.

[milesy] 27/9/2024 10:02

While the company has increasingly become a play on the European retail market, Action have demonstrated an incredible ability to scale at speed while at the same time offering a product/pricing mix across their territories that appears continually to hit all the sweet spots.Long may their very astute management, with the backing of 3i, keep it coming.

[chc15] 27/9/2024 09:18

Usually ignore these broker reports, they are pure fiction, however 40 does seem on the cards one day, dyor.

[steeplejack] 27/9/2024 09:07

This has got to be one of the most 'painless' and undemanding investments i've ever made.

[scottishfield] 27/9/2024 08:51

Citigroup raises 3i price target to 4,140 (3,850) pence - 'buy'

[chc15] 24/9/2024 10:56

Yes, very good, the mkt still underestimates Action. There must be larger global retailers eyeing a takeover here, if not, then a listing. Onwards.