Share Name Share Symbol Market Type Share ISIN Share Description
Lindsell Train Investment Trust LSE:LTI London Ordinary Share GB0031977944 ORD 75P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  +£10.00 +1.27% £797.50 £785.00 £810.00 £800.00 £800.00 £800.00 171 16:35:07
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Equity Investment Instruments 4.9 3.9 0.0 - 175.45

Lindsell Train Investment Share Discussion Threads

Showing 26 to 49 of 50 messages
Chat Pages: 2  1
He's 58 so a fair point if he retires. I suppose he could stay on in a Non Exec Chairman type role rather than trash what he has worked for. Think they are developing their team anyway. Bottom line is that it's not a career where you have to retire as such, particularly given his do nothing but read style.
Don't disagree - they're been somewhat disingenuous with their "..Trading at a substantial premium" warnings. However - Mr Train will retire eventually, and if that article I'm probably misquoting is to be believed, then it's not that far away. I reckon he's aged 59? I know Buffett & Charlie Munger are way older but neither has said they'll quit. I'm also suspicious of any outperforming managers - nothing lasts for ever, as Anthony Bolton so memorably demonstrated (FCSS), and as Neil Woodford may be in the process of proving! The sort of bond proxy long term winners that have done stupendously for the likes of Terry Smith & Lindsell Train won't do well forever. As for only one buy/sell in 5 years - he could have done with selling Pearson! :) I digress - my point is, the stake in the fund manager relies on the key man risk of two getting-older blokes, as well as the continued outperformance of LTI. Makes me think an 8% earnings yield isn't an unreasonably valuation for it.
Yes, fair points. Remember that Mr Train has an ability to do very well from doing nothing though. My sort of person! He has only chosen one new share to invest in over 5 years, I think. He could therefore continue to be a fund manager in the Buffet style for another 30 years! All depends whether he wants to give it up. Lets be clear though that the premium is not really investor stupidity. It's because the market values Lindsell Train Limited more highly than management's valuation on an 8% trailing dividend yield. Think they should be more honest on that rather than just warning everyone to sell. If they think it really is overvalued then they should be issuing shares or selling their own shares. They don't do either because they have always wanted to retain a high weighting to the fund manager and not dilute their own interests in a very valuable asset!
3 things come to mind: 1. It's not listed, nor is it ever likely to be - so how does the value get realised? 2. How long do Mr Lindsell and Mr Train have left? Think I recall NT saying a couple of years ago that he was "two thirds of the way through" his career - but I may be badly misquoting! 3. As you say, the value of the management co depends on the success of the investment co - a curious form of gearing that will work in both directions. Majedie very similar. Of the above, no.2 seems the most relevant, & all lead me to think that a big valuation discount (on the management co) is warranted.
Odd investment trust this. They spend most of the time warning investors about the premium. In reality the premium reflects the undervaluation on Lindsell Train using their valuation of an average of 1.5% of AUM and a P/E of about 12. Just ran this valuation methodology on Polar Capital. Interestingly it gives a valuation of about £178m. The market cap is £404m! Lindsell Train is valued on a historical dividend yield of 8%. Lindsell Train is worth more than £175M in my view. If it was listed I would expect it to be worth at least 50% more than this and possibly 100% more in current market conditions. Of course, this could turn south rapidly on a stock market fall or from poor Lindsell Train performance, but at the moment its undervalued in my view. Personally, I would BUY shares in Lindsell Train on an 8% yield. Happy to hold my remaining 1/3rd. Top-sliced twice. Maybe I should have kept them all!
The director sales and LTI sale to James Bullock was flagged a year ago and is just about succession planning. The value and premium here is all about the asset manager LT and succession is important. JB recently penned an essay on the compounding beauty of Unilever...I think a couple of days before Kraft tried to buy. I am a holder but have sold about half in the past 12 months when the premium got too rich. Typically rolled into it's cousin Finsbury Growth and Income at NAV.
just noticed director dealings!
Wow what a site ...just discovered it today by putting into Goog "whats been happening to LTI lately"...and already seen more and better advice than in the press or annual reports just to add my bit... read about LTI ages ago in a publication called (I think) Investment Trust News also mentioned were Law Deb and all the usual suspects...and they are all still doing well bit of a novice here but was always a bit worried about the premium etc. Thanks to all on Forum Pete
Good call on your last sell @topvest.
Well they have warned 2/3 times that the share price was at a ridiculous premium. Nothing they need to do, but carry on doing what they have always done.
This IT is like a casino! What's NT doing about it?
Well I've halved my holding today. The premium is very high at the moment. Now sold 2/3 of my original holding. Will hopefully retain the rest.
Fair point @MF, though all gurus will stumble at some point - hence big premiums for future outperformance seem unjustified. Eg a -10% year for LTI could easily knock 30% off the price, with the effect on the valuation of the management co, the double effect on the NAV, and a reduction in the premium. -30% and still trading at a premium! I've long had a dislike of T Smith from something that happened with a stock I held, but perhaps FEET a good example, bailed out only by the £ collapse (the rise been since late June).
Terry Smith did run the Collins Stewart pension scheme for quite a while and was a very highly regarded analyst in the 80s. Much more than a one trick pony imo. I agree that is takes a whole cycle to really judge performance, but with Fundsmith having nearly tripled in 5 years, it could manage a big setback and still be top quartile.The thing about Fundsmith and LT is that they have looked expensive for a long time and have continued to go up. No prizes for sitting on the sidelines in this game. I bought a load in 2013 and have held off buying since, thinking it must come back down...
mad foetus
The one thing to think about with Nick Train is that he has only made one new buy decision in the last 5 or 10 years. It's not as if he needs to work that hard to keep things going!
Agreed; have a big holding in LWDB, particularly ISA'd. However, did more research on LTI yesterday. It's a curious beast - pays performance fees to the co that makes up 33% of its NAV, and a large part of the outperformance is the rise in value of that co! ie it's effectively highly geared - the more LTI does well, the higher the performance fees and also the more external money goes to LindselL Train Ltd. Has led to stellar growth, and in truth they've not valued it too highly - I reckon (and don't rely on my reading of both sets of accounts) at a p/e of approx. 8, when probably nearer 16 if listed. Ignoring, of course, that both honchos are in their 50s. Munger & Buffet average age over 80, fwiw. So - if Mr Lindsell and Mr Train continue to pick well (not including PSON last year), the management co continues to do well and LTI continues to do well. If I'm right that p/e 16 is more realistic than p/e 8, for something growing so fast, then that's 33% onto the NAV in an instant. Still overvalued, but probably by about 15-20% rather than 57%.
Crazy premium to NAV. Look at LWDB as a parallel but its on a discount of 11% including its in-house business.
I see they rather sensibly changed the management fee as being calculated on "the lower of NAV or shareprice". Personally I'd like to see that as a law for all ITs. Some with dubious NAVs (eg smallcap funds, valuing holdings at bid that they wouldn't even be able to flog at a 50% discount) can end up getting a management fee on twice the shareprice. But - isn't the LTI premium now out of control? I'm not a fan of "gurus", be it Anthony Bolton (), Neil Woodford (small pharma fiascos) or Nick Train, who like Terry Smith has been brilliantly right for owning the bond proxy "brand" cos, but won't necessarily continue to be brilliantly right. According to HL the premium is 57%; I fail to see how a 33% holding in two-man band Lindsell Train can justify that. Nor can holding a handful of stocks I could easily buy myself, that seem as likely to underperform from here as outperform - DGE, ULVR, LSE, BAG, Nintendo, RELX, Heineken, Mondelez.
Looking good lately
Sold a third of mine this morning. Rest are effectively £nil cost. Valuation seems a tad racy so taking the opportunity to recycle some of my holding into a better value investment trusts. Won't sell the rest though.
Good results again. Chairman has warned stakeholders about buying the shares at a premium..unusual behaviour for a Chairman, but honourable all the same. "I reiterate the cautionary comments I made to shareholders in last year's annual report, first about the risk to the NAV from a sharp fall in markets given the size of holding in LTL and second to caution potential new shareholders to think carefully before buying the Company's shares at a premium to NAV, which as I write is at 6%. This has fallen from higher levels late in 2013 but it is worth pointing out that if the investment in LTL continues to grow in importance above 25% of the NAV the share price of the Company will increasingly be determined by investors views on the value of that asset and less by conventional reference to the NAV."
The spread is also rather high.
You don't often see a Board saying the premium is too high...very unusual! The first six months of the Company's financial year continued as last year's ended, with the Company's net asset value rising more than the benchmark and world equity markets. The NAV was up 7.8%, the benchmark 1.9% and world markets measured by the MSCI World index in Sterling up 0.6%. What has changed more is the share price. It was up 28.4% and at the end of September was trading at a premium to NAV of 21%. The Manager wrote about the premium in its September monthly update. The Board would like to support and reiterate some of the comments, and in particular would caution new investors buying shares at a heightened premium to NAV. In time the premium may contract and there is a risk that the shares will trade at a discount in the future. Should that occur at a time when markets are weak and the NAV is falling the loss of value for investors buying at a significant premium could be material. Also, it would be wrong for existing investors to celebrate a high price that results from a large premium. The Manager's annual management and performance fees are calculated on the market capitalisation of the Company not the NAV. Calculating the fee on the market capitalisation was designed to align the Manager's interests with shareholders, recognising that investment trusts have generally traded at discounts. This works to shareholders' advantage when discounts exist but that advantage is reversed when a premium prevails. Aside from communicating our concern and reiterating that the price the Board ascribes to its holding in Lindsell Train Limited is realistic and not undervalued (as some shareholders have suggested), there is little the Board can do to help resolve the situation other than issuing new shares. In previous statements, I have commented that the strong growth in LTL's business is much to be welcomed as is the greater strength and depth which the business is developing, but LTL remains significantly dependent on its two original founders and on continued good investment performance. The Board is currently reluctant to issue more shares as we believe this would dilute shareholders' interest in LTL, hitherto the most important and value creating asset the Company owns.
Some chart analysis:
Chat Pages: 2  1
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