Bellevue Healthcare Share Discussion Threads

[speedsgh] 02/5/2023 13:40

Trust Watch: Bellevue’s a bargain if you think markets are bonkers -

When markets stop obsessing about interest rates and inflation, trusts like Bellevue Healthcare are going to look extremely cheap...

...Bellevue waits for turnaround

Bellevue Healthcare (BBH), a concentrated, mid-cap focused portfolio run by Paul Major (above) and Brett Darke at Bellevue Asset Management, is recovering from a nasty 7% slide in NAV during last month’s fears of a new banking crisis. The shares are not recovering as quickly as the NAV with the result the discount has gapped out to more than double its one-year average at nearly 11%, giving the stock a lowly -2.1 Z-score.

In a video released via the London Stock Exchange’s regulatory news service, Major said he remained optimistic about prospects, particularly with developments in gene editing, which through companies such as top holding Sarepta Therapeutics could open a new era in medical treatment. In recent months, he said there had been few changes to the 28-stock portfolio, as the managers waited for markets to come to their senses, stop obsessing with macroeconomic issues and focus on company performance instead.

‘The valuation disconnect in the market has been very extreme and leads us to conclude that the exposure we have represents very compelling longer-term prospects. Therefore we’re sticking with our knitting and are very happy with what we’ve got,’ said Major.

Like the Baillie Gifford funds, the past 18 months have been tough for BBH which has seen its three-year returns dwindle to 12.6%. The 62.5% gain over five years looks better but trails its benchmark, the MSCI World Healthcare index, by 18%. There could be quite a turnaround once sentiment improves in the way Major suggests.

[1c3479z] 24/4/2023 18:55

sarepta's dmd up before the authorities FDA etc at the moment for consideration, high risk high reward stock though most expect it to be passed. If so, they may mandate additional safety monitoring once it's on the market.
DMD so relentlessly awful - pressure is on to let the drug through though nothing certain.

[alter ego] 24/4/2023 15:18

v interesting video. Gene therapy is a bit beyond my pay grade but I can see why it could be the answer to many illnesses we cannot treat today.

[speedsgh] 24/4/2023 09:49

Bellevue Healthcare Trust portfolio update -

Investment Manager, Paul Major explains that the stark valuation disconnect in markets has reaffirmed the managers' belief that the holdings are compelling, and that the trust remains well placed to benefit from a normalisation in markets. Paul highlights a core holding, Sarepta Therapeutics, as a company at the forefront of gene therapy making headway in the healthcare space.

[1c3479z] 14/4/2023 19:44

rather underperforming of late including last month after looking at the factsheet which suggests that they should be getting a competitive advantage by meeting management and travelling around the world. Have to hope so, much research might be done at home in the office and via webinars, I would have thought.

[speedsgh] 06/3/2023 11:55

Final Results -

From Chairman's Statement...

PERFORMANCE

Over the financial year, the Company's total NAV return (i.e. including reinvestment of dividends) was -4.1%. In contrast the MSCI World Healthcare total return Index produced a positive total return of 14.1%, representing an underperformance of 18.2% over the year.

This is the second annual report where I have to acknowledge underperformance of the Company against the index and the first where the absolute total return was negative. As per last year, I will refer readers to the longer term track record. However, this is not to minimise any potential concerns that investors may have; I will seek to address those below.

Nevertheless, some of my comments from last year's statement bear repeating in what has remained a challenging macro environment for active equity managers: "Short term variations should never change an investment process"; the "Investment Manager remains true to its investment process" and "continues to focus on bottom-up fundamental analysis to drive stock selection predicated on superior long-term returns."

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DIVIDEND

The Company targets an annual dividend of 3.5% of preceding year-end NAV, paid out in two equal instalments. The Company paid out a final dividend of 3.015p in respect of the year 2021, in April 2022 and an interim dividend of 3.235p in respect of the financial year 2022 in September 2022.

The Board has proposed a final dividend of 3.235p per Ordinary Share in respect of the financial year 2022 and, if approved at the forthcoming Annual General Meeting, this will be paid to Shareholders in May 2023.

For the financial year 2023, the Board is proposing a total dividend of 5.990p per Ordinary Share, composed of interim and final dividends of 2.995p per Ordinary Share, to be paid in August 2023 and April 2024 respectively, subject to shareholder approval. This will be the first year that the Company's dividend pay-out will be reduced, reflecting the lower year-end NAV.

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Final dividend of 3.235p to be paid on 5 May 2023 (to Shareholders on the register at the close of business on 17 March 2023), subject to Shareholder approval at the 2023 AGM.

[rambutan2] 02/2/2023 15:24

Jan monthly - includes home truths re NHS:

[xtrmntr] 23/12/2022 16:44

https://www.proactiveinvestors.co.uk/companies/news/1002093/bellevue-healthcare-trust-expects-incredible-volte-face-to-be-a-key-factor-in-2023-1002093.html

[speedsgh] 21/12/2022 15:45

5.99p target full year dividend for FY23...

Target total dividend -

... For the financial year ending 30 November 2023, the target total dividend will be 5.99p per ordinary share, this being 3.5 per cent of the unaudited net asset value per ordinary share of 171.16p per ordinary share (including current financial year revenue items) as at 30 November 2022. The Board intends to declare an interim dividend of 2.995p per ordinary share, being half of the target total dividend for the financial year ending 30 November 2023, in July 2023 and intends to pay this dividend in August / September 2023. The Board intends to propose a final dividend of 2.995p per ordinary share for the financial year ending 30 November 2023, in February / March 2024 and intends to pay this dividend in March / April 2024.

The Company pays dividends from a combination of available net income during the financial year and other distributable reserves. It is currently anticipated that most of the target dividend for the financial year ending 30 November 2023 will be financed from other distributable reserves of the Company. This announcement of a target dividend for the financial year ending 30 November 2023 should not be taken to imply a profit forecast by the Company.

[speedsgh] 14/12/2022 14:43

Bellevue’s Major: ‘I feel really confident,’ about oversold healthcare (9/12) -

[jonwig] 10/12/2022 17:27

Review of BBH and sector:

[rambutan2] 08/12/2022 22:35

Only December left:

[jonwig] 11/11/2022 07:20

Kepler Trust Intelligence research note (FOC, not independent):

[rambutan2] 05/11/2022 21:53

Re redemption, from the latest monthly:

October sees the opening of the Trusts annual redemption window. This closed on 2nd November 2022. We have offered this ungated facility, which allows investors to redeem shares at a valuation close to NAV, since inception. In previous years, the take-up has been de- minimis and we have been able to place the redeemed shares in the market rather than cancel them or hold them in treasury.

This year has seen a much higher take up for redemptions than in prior periods, with some 30.6 million shares tendered (5.2% of the outstanding capital). We have received some feedback from several larger wealth managers that they are centrally reducing exposure to investment trust products more broadly in order to have improved daily liquidity and this may have played a role in the larger redemption amount.

We would remind our readers that there is an open-ended UCITS version of the strategy (the WS Bellevue Healthcare Fund) if you are needing to reduce investment trust holdings but still want to retain exposure to the same underlying investments. Unlike the Trust, the Fund does not pay a dividend. Depending on each reader’s situation, there may be other suitability factors that need to be taken into account and it may be necessary to take independent financial advice.

It is very unlikely that such a sizeable redemption amount can be placed into the market and so these shares will in effect be bought in. However, the liquidity of the underlying portfolio is such that we can easily manage to realise the cash without the need to create a redemption pool.

Your managers remain convinced of the long-term opportunity for the portfolio and, as has been the case throughout the year, continuing to add to their personal holdings in the Trust.

[jonwig] 07/10/2022 15:27

betman - nor am I! Usually, such redemptions are made at NAV rather than "dealing price".

[betman] 07/10/2022 13:13

The recent announcement on Voluntary redemption of shares (4/10/22). I am not entirely clear on what the difference is between voluntary redemption through this scheme and selling in the market. The redemption scheme is at an unknown price vs selling in the market at a fixed price. There seems to be a suggestion that redemption is subject to income tax ( on the profit )and market selling is subject to CGT

[rambutan2] 06/10/2022 20:53

Agree, a bit too much verbiage sometimes. Although much prefer to suffer that on a fact sheet rather than just a few updated numbers and no commentary at all.

[jonwig] 06/10/2022 06:59

Thanks! I'd skipped that page in frustration.

[rambutan2] 05/10/2022 21:59

Justification jonwig:

"At this point, regular readers might be wondering why we have elected to include a section on the UK market. The reason is this: the liquidation of portfolios (“put me in cash, preferably dollars”) sinks all ships and has manifested itself in disorderly sell-off. Another attendant (inevitable?) consequence is that many Investment Trusts have fallen onto greater discounts.

This will often have nothing to do with the quality of the underlying investments; when there are more sellers than buyers, equity prices fall. There is value out there to be sure, but people are shell-shocked and it will likely take a bit of time before we see any meaningful (and careful) dip-buying.

Data from JP Morgan, who are one of the Trust’s brokers, suggests that the average discount across the UK Investment Trust sector increased from ~13% at the end of August to closer to 16% at the end of September, and this compares to around 5% at the beginning of 2022. We too have seen an escalation in the discount on Bellevue Healthcare over the month (5.7% as of the end of September), having traded at an average premium of 0.5% from inception to the end of 2021.

What might the managers be able to do about these discounts? Share buybacks by Trusts are one option. In reality, these must be conducted on an arm’s length basis and in a manner that does not distort trading. As such, it will seldom have a material impact – the Trust would simply furnish sellers with liquidity and diminish the capital the manager has available to buy cheap assets on behalf of the remaining shareholders. This feels rather unfair, especially when there are some compelling opportunities within the scope of the wider investment environment.

It is deeply frustrating to say so, but we probably need to resign ourselves to higher discounts persisting as a wider phenomenon in the Trust sector until broader confidence in the UK stock market is restored. This will be a function of asset prices being deemed to have fallen far enough or some sort of profound change in the economic outlook for the country.

In this context, we think the best thing a domestic investor can do in the short-term is to focus on under-valued UK-listed equities that are de-coupled from the UK economy and sterling. A global healthcare-focused Investment Trust for example."

[jonwig] 05/10/2022 16:52

It's good knockabout fun, I suppose. But related articles in the FT recently are a lot more trenchant.

And it's page 4 before they actually get talking about healthcare. Why the comments specifically about the UK economy when it's zero pc of the portfolio? (US 95%.)

[rambutan2] 07/9/2022 15:15

Monthly views:

[xtrmntr] 12/8/2022 20:08

The managers of investment trust Bellevue Healthcare are confident the future of the global healthcare industry is a bright one. Ageing populations across the world and the exponential growth in chronic illnesses mean demand for healthcare services is here to stay, irrespective of any economic downturn. So confident are the management team that since the start of the year, they have used £80million of low-cost borrowings to increase the trust's holdings in equity markets. The two individuals overseeing the £1billion portfolio – Paul Major and Brett Darke – have also been busy buying more personal shares in the trust, a sure-fire sign that they believe the outlook is more positive than negative.'Of course, as an investor in equities, you can't dismiss the Putin factor,' says Major, 'Or for that matter, geopolitical tensions in the South China Sea. ''It explains why we have kept some powder dry just in case something happens which causes share prices to plunge sharply and suddenly. If that happened, we would use the borrowings we have yet to employ to buy even more shares in the companies we own. 'The fact remains that many of the companies we invest in are super-resilient businesses that will keep on growing. They provide a degree of certainty in an uncertain world. The trust is invested in 29 healthcare stocks, most listed in the United States. 'We keep an eye on some 250 companies,' says Major. 'Most are small to medium-sized businesses doing extraordinary things in the healthcare sector. But their share prices have been hit by the general slide in US equity values over the past nine months.' Bellevue's numbers confirm this. Over the past year, the trust has recorded losses of nearly 9 per cent. This compares with five-year gains of 73 per cent. 'Our job is to find companies that can deliver healthcare solutions, whether it is in disease prevention, diagnosis, treatment or recovery,' says Major. Among the trust's top 10 holdings is CareDx, a US company that provides at-home testing kits to people who have had a major organ transplant. 'The tests help reduce the risk of organ rejection,' says Major. 'They are able to identify any adverse impact on the replacement organ as a result of the drugs being used – and any weakening of the immune system that could trigger other conditions.' The investment trust has had a holding in CareDx on and off over the years, but reinvested in the company in September last year. Another big fund stake is in Axonics, a business that has developed a small electronic implant that helps people who suffer from involuntary leakage of the bladder or bowel. The implant sends out a current that stimulates nerves that control the bladder and bowel, stopping leakage. When someone wants to use the toilet, they deactivate the implant through a hand-held switch. Quarterly financial results for Axonics, released last week, showed a 50 per cent increase in company revenues, compared to the same period last year. The trust has a stock market identification code of BZCNLL9 and a ticker of BBH. Annual charges total 1.1 per cent. Given its specialist nature, it is a fund that should only form a small part of an investor's portfolio. One attractive feature is that it pays a regular dividend, equivalent to around 3.5 per cent per annum. The latest interim dividend of 3.235pence compares to last year's payment of 3.015pence and a share price of £1.74.

[rambutan2] 07/8/2022 21:34

LOL:

Welcome to our July jocundity. The schools are out and the sun is shining. Thank goodness it’s holiday season, because nothing works: there aren’t enough staff at the airports (and it can take an age to renew your passport), ambulances and GP appointments vie with unicorns for rarity, there isn’t enough water for the garden and the price of everything rises literally before our eyes. At least the rolling blackouts haven’t yet started.

Where will it end? Worry not, for the Truss/Sunak brains trust will shortly carry us into the sunny uplands. Decades of chronic under-investment and poor planning will fall away in mere weeks and before you know it, we’ll be saved. If not, “no idea Keir” or whatshisface from the other lot whose name we cannot recall will suddenly have some policies. It’s all good; Thomas Hobson be damned.

For those desperate for good news, the stock market has recently began to offer some cheer. Perhaps we are finding a bottom. Sentiment certainly seems to have reached that point where few investors are expecting positive news. However, we continue to see opportunity and that is an exciting distraction from the chaos of everyday reality in basket-case UK.