Aberdeen Diversified Inc... Share Discussion Threads

[hugepants] 22/1/2021 15:52

The discount is over 15% again

[neilyb675] 18/12/2020 17:19

Aberdeen Diversified Income and Growth Trust (ADIG) has a diversified multi-asset approach, aiming to generate attractive long-term income and capital returns. After a strategic review in October 2020, the manager intends to increase the share of private assets in the portfolio to 45% by Q221 and to 55% over the long term (vs the previous c 43% target). ADIG's investment committee will now be led by Nalaka de Silva, head of private market solutions at Aberdeen Standard Investments (ASI). While ADIG's NAV TR performance has lagged the benchmark in recent years, the shares continue to offer an attractive FY21 yield of 5.8% (based on ADIG's dividend guidance). The manager's plan to maintain or increase dividends should be supported by the lower interest expense post the partial bond repurchase in early November 2020 and the use of revenue reserves. ADIG's NAV TR performance has lagged its benchmark (Libor + 5.5% pa) since the strategy change in March 2017 to an increased focus on less liquid assets. The NAV discount has widened to c 10-22% since end-March 2020 from 5% before the COVID-19 pandemic. The last 12 months (LTM) dividend yield is 5.7%, ahead of its peers. We note that in FY20 dividends were covered by earnings.

[mister md] 17/12/2020 15:51

Shareprice is moving in an upward channel. It's slow. It's boring. But it's moving up, with dividends along the way.

[greenpastures2] 16/12/2020 20:17

It does mean that there are less shares to pay future dividends on.

[rich1952] 16/12/2020 11:14

The aggressive buy back policy isn't holding the share price and it can't continue indefinitely. More sellers than buyers despite the attractive divi. I don't know where we're heading on this one.

[essentialinvestor] 14/12/2020 10:44

Problem is they can't keep buying back indefinitely and where would the % discount to NAV be without the large current buy backs?.

[rich1952] 10/12/2020 20:28

I emailed the Chairman who has personally responded to me in the past but this time a reply via her bag carrier simply repeating the mantra.I wish they would wind it up ASAP but they won't. What is the point of a trust no one wants to buy!

[tiltonboy] 10/12/2020 19:51

They must be dismayed that the heightened buy-backs is not having a meaningful effect...others won't be surprised. At some stage they might realise they are flogging a dead horse. At what stage do they admit it's a futile exercise!

[hugepants] 07/12/2020 11:17

NAV 114.48p so on a 17% discount and 5.6% yield. The discount control mechanism is not working at the moment obviously but they did reiterate the 5% target in the interims.

[scallywagkid] 04/12/2020 18:37

There seems to be an open tap of selling into the buy back. They could hire a broker with a proven small cap investment trust IR capability - such as Peel Hunt - rather than a transaction focused broker and then get out on the stump. Could also look to hire a PR firm.

[rich1952] 04/12/2020 17:01

I'm struggling to understand the MO here. Whilst the rise in the share price is welcome, it seems that this is only due to the constant buy back of the shares by the Company in an attempt to reduce the discount. If the share price can only be maintained by using buy-backs, what is the point of continuing in business? They might as well dissolve the fund and let us have the underlying value of the assets.

[rich1952] 27/11/2020 16:04

No matter how many they buy back, the price is not maintained.I just don't see a future for this trust.

[essentialinvestor] 25/11/2020 12:40

Right, questions answered on the latest factsheet. And another review of the portfolio with changes made. You could not make this up.

[jimcar] 19/11/2020 23:13

I think the 5% figure is net cash.

[essentialinvestor] 19/11/2020 19:14

So they have retired nearly £44 in debt, they are buying back shares yet the last gearing figure given is 5.5%. Where is this money coming from, what are they selling?.

[essentialinvestor] 19/11/2020 19:12

12 November 2020 "Aberdeen Diversified Income and Growth Trust plc announces that, on 2 November 2020, it repurchased and cancelled £43.9 million in aggregate principal amount of its 6.25% Bonds due 2031 (ISIN XS0134340180) (the "Bonds"). Application has been made for the admission of £43.9 million in principal amount of the Bonds to the Official List of the United Kingdom Listing Authority to be cancelled on 11 December 2020 in accordance with the FCA's Listing Rules. The remainder of the Bonds, totalling £16.1m in aggregate principal amount, will remain outstanding and continue to be admitted to the Official List".

[hugepants] 19/11/2020 18:29

They have indeed cranked up the size of the buybacks

[essentialinvestor] 18/11/2020 19:13

Looking at the last gearing disclouse it reads 5.5% net cash. I can't reconcile that with their outstanding net debt, some of which they are buying back. Can anyone clarify, thanks.

[tiltonboy] 18/11/2020 19:01

Makes a change from the ridiculous 50k daily purchases. Hopefully, this marks the start of a serious buy-back.

[hugepants] 18/11/2020 07:37

I suspect its pretty accurate and you can probably get daily prices for most of the portfolio ie. 15.4% of the portfolio: https://markets.ft.com/data/funds/tearsheet/summary?s=GB00BD5D3D88:GBP 14.6% of the portfolio: https://www.morningstar.co.uk/uk/funds/snapshot/snapshot.aspx?id=F00000YY81&tab=13 top ten are here which can all be priced https://www.hl.co.uk/shares/shares-search-results/a/aberdeen-diversified-income-and-growth-ord And the EM bonds will have a daily price etc etc

[essentialinvestor] 17/11/2020 21:28

How accurate is current NAV given some of what they hold?.

[hugepants] 17/11/2020 21:11

Looking at the 5 year charts on the HL website the discount here is usually in the 5%-10% range. So the current 20% discount is at least twice the norm. Also fyi from the June interims; Discount management policy The Company's discount management policy seeks to maintain the Company's share price discount to NAV (calculated excluding income, with debt at fair value) below 5%, subject to normal market conditions. Unfortunately, as explained in the Investment Manager's Report, we were not in anything like normal market conditions. As the pandemic worries took hold and investor concerns multiplied through March, the Company's share price fell sharply which resulted in the discount (calculated with debt at fair value) widening from 7.6% at 30 September 2019 to 12.1% at 31 March 2020. During the period, the Company bought back 3.1 million shares into treasury at a cost of £3.4 million. The Board will continue to monitor the discount and buy back shares in support of the discount management policy (or undertake share issuance if required) when it believes it is in the best interests of shareholders, whilst also having regard to the prevailing gearing level and the composition of the Company's portfolio.

[wunderbar] 17/11/2020 21:01

I've been meaning to comment on this thread for ages and now finally getting round to it. This stock comes in for a lot of flack but I'm actually a big fan. Why? Because it's boring as hell, decidedly dull, it just keeps plodding on and pays a generous dividend, currently c.6%. I've bought multiple tranches of this stock ranging from 84p to 109p, first in 2016 (when it was known as British Assets Trust / BlackRock Income Strategies Trust) and the rest in past 12 months including today @ 90p. My average is c.97p so slightly down but nothing to be overly concerned about. During many months of Covid induced volatility ADIG has actually been the rock of my portfolio, star performer in terms of resilience/stability - unlike certain other stocks I own which saw values plummet 50-80% before recovering on vaccine news. And not to mention ADIG has continued paying quarterly dividends throughout Covid/Lockdown whereas many blue chip stocks suspended payments altogether this year. I understand a longstanding issue with this trust is poor capital growth over the years. It's true many other trust's have seen good/stellar growth in past 10 years (pre Covid crash) whilst ADIG has suffered significant capital erosion during same period. I hasten to add timing is crucial, anyone buying at top of cycle will always inevitably suffer. This snippet recently caught my eye, courtesy of Citywire/Numis (28 October) "ADIG NAV total returns have been 4% over the last three years, versus 24% for the MSCI AC World index". Needless to say the trust's Fund Managers have failed miserably during this time. This is one of the oldest trust's around, formed in 1898! I Googled ADIG's share price chart over maximum period dating back to March 1995 when share price was 87p, fast forward 25 years and today it's just 90p. Tells its own story - this is purely an income stock thanks to the perennially generous dividend rather than a capital growth stock. Mind you if you tallied up all the dividends over the years that'd be quite a sum. On a final note some of you asked why the share price dropped sharply today, at one point falling 5.4% or 5p @ 88p before slight recovery. Quite remarkable given it briefly touched 96p first thing in morning (thus falling 8% in just a few hours - and there's me saying this stock has been stable!). Whilst I couldn't find a specific reason I did go on to discover approximately 15 of the top 20 fallers today were Investment Trusts, so it's definitely sector related. Come tomorrow if there's a continuation of this downward pressure I might consider topping up again.

[tiltonboy] 17/11/2020 19:42

As a minimum, they should put a bi-ennial Tender in place at a 2% discount, giving a liquidity event.