Lindsell Train Investment Share Discussion Threads

[topvest] 07/6/2023 20:20

I was listening to Alex Wright at Fidelity Special Values today. I must admit to liking his style at present.

This makes you think.

Diageo is on a 52 week low. It's on a forward P/E of 19 and valued at 9x book value yielding just 2.5%. Analyst consensus are flat to down a bit.

Barclays is at a similar price level to a year ago, is on a P/E of 5 and valued at 35% of book value with a prospective yield of 6%. Analyst consensus estimates have been increasing.

Question 1 - which is the better quality company? Easy, it's obviously Diageo.
Question 2 - which is the better investment at a 4% 10 year bond rate? More tricky. I might have to say Barclays, even though its a dreaded too big to fail bank!

Any thoughts?

[topvest] 07/6/2023 19:51

Yes, very sad Diageo news and just before he retired. Life can be cruel.

Some good posts on this BB and I still have a small holding. Nick Train is great. I do agree with the quality comments above on 10-year gilts. Personally, I am holding fire on expensive shares, irrespective of quality. The yield curve will have been heavily inverted for a year on 5 July 2023. The market consensus is a soft landing, but that just seems to be the very best outcome in my view.

Anyway, I am sure Nick will do reasonably well long-term, but I'm not going in big until the US market breaks. The US calls the shots and its still blowing bubbles. AI this time around. Bitcoin still hasn't crashed either. The US market remains ludicrously expensive. 60% of the MSCI World Index is like a Japan 1980 bubble valuation.

Anyway, I may be wrong and the UK post Brexit is really not expensive. I just think it could get a whole lot cheaper when the US market finally capitulates.

[essentialinvestor] 07/6/2023 18:12

Sir Ivan Menezes' death a shocker, only 63 and had recently announced his retirement.

New CEO strikes me as a tough cookie having watched a recent presentation, previously COO and head of US, same route IM took before becoming CEO. Tough act to follow though.

[giltedge1] 07/6/2023 14:56

Specto welcome on board, see you at AGM up 3% today, well done Nick Train.

[giltedge1] 07/6/2023 08:27

LTI was gaining momentum a month or so ago Relx,Ulvr,Burb, pushing to highs, then Relx,Dge, turned down due to adverse media comment, not trading news. On the plus side LSEG, Experian, Mondelez pushing to highs, so swings & roundabouts.All companies trading well div increases & or buybacks. Analysis over 5, 10 years great for all holdings smashes the ftse stalwarts BT, Vod,BP etc. So my take great long term hold, but have to be patient. Undervalued compared to peers eg Polar. I have done well buying NT under achievers Fevr, Ulvr bought at Liz Truss lows, just added HL already up. So eyeing DGE now Sold DGE for £27 2 years ago so shows how well performed long term.

[spectoacc] 07/6/2023 07:37

Thanks @steve. I'd argue he called he bond proxy trade brilliantly for 15 years but the past 5 or so have been a struggle, & agree no certainty from here. NAV where it was 3 years ago, share price down over 5 years.


Can buy Gilts on c.4.75% GRY, current yield of 4.5%, vs under 0.5% not long ago. That still has a way to play out IMO. Rates haven't peaked yet, and eg 4.5% risk-free over the next 40 years suddenly isn't so bad. The dash for yield that re-rated bond proxies can go the other way.

But LTI on a discount, with the L-T holding, gets me in. Is possible ongoing underperformance (look at S&P, or techs - again) causes more AUM losses at L-T, or the Train stocks continue to re-rate down (as @EI says re DGE: great co, but high p/e). But that's what discounts are for.

[steve3sandal] 06/6/2023 16:41

Nice. Nick has been lucky for 20 years here before this bad trot. No idea how this game ends but I doubt we will get too many opportunities to scalp under £1000 unless someone wants out big style. Good luck with your new holding.

[essentialinvestor] 06/6/2023 16:39

DGE weighing atm.

[spectoacc] 06/6/2023 16:32

Don't think me turning bullish, am a medium-term bear of Mr Train, have twice tried to short LTI in the past, & have never held.

But picked up a maiden holding at 99893.4 earlier (trade not showing yet) - everything has its price.

Won't stop me being critical :)

Good luck holders.

[steve3sandal] 06/6/2023 16:18

Weds 15 June 22, so I’d guess next Wednesday. I bought a few more just over £1000. I’m back at my 2009/10 high for holding size though the share price was around £180 if I remember correctly.
I’m expecting them to announce another disappointing year given the 31 Mar NAV was £1057. Something like £1113 and £1185 in prior years adjusted for the Div so I’m expecting Mr Train to apologise once more. NAV trend partly self inflicted by directors valuation of our 24.4% stake in LT where we are awaiting Jan 23 Accounts. Hopefully another 5% dividend to be announced though of course 5% isn’t what it used to be. With the likes of Diageo, Unilever and PayPal looking at 52 week lows and AI taking a shine off Relx share price (refuted by them) there’s a lot of bad news baked in.
Todays small volume plunge below £1000 for one impatient seller just puts the icing on the gloom. Poor Michael Lindsell, in a Closed Period, can’t top up here. He knows….

[giltedge1] 06/6/2023 14:45

Must be announcing soon, anyone know when?, now my largest holding, topped up at 1000.

[essentialinvestor] 23/5/2023 14:24

IBM recent statement on automation replacing a large slice of their non customer
facing roles caught my attention.

[spectoacc] 23/5/2023 14:19

Offices just seem so Retail - "Yes, the internet is here, but people will still want to go to the High St to try things on". Hmmm.

But agree Grade A really ought to hold up - or does it stay let, only at lower rates? ie the differential with grades below gets maintained.

Unconvinced by ChatGPT but it only needs to affect the edges, or give an excuse (BT-style) for job cuts I guess.

Digressing OT. At least LTI fans can say there's no REITs etc, but are there holdings that might be disrupted? RELX looks the most possible.

[essentialinvestor] 23/5/2023 14:06

Spec, appreciate the view.

I know you have been very bearish on REITS and fair to say that's now been
more than validated. Even niche areas like Grade A London office, which I thought
looked reasonably safe (longer term) following large share price falls, may now be in the firing line with AI related job losses on the way and tech sector job cuts.

[spectoacc] 23/5/2023 14:01

@EI - neutral on HL now, just because they ought to be making out like bandits with where interest rates are. Like banks, it's free money for them. Unlike banks, they shouldn't have the political or loss provisions trouble.

LTI I'd buy on a large enough discount - less anti them than I've been in the past.

With the way the 10-year is going, there's trouble ahead that might well produce some entry points on a host of things soon.

REITs look a huge value trap atm, despite their notional cheapness.

I've predicted 7 of the last 2 downturns.

[essentialinvestor] 23/5/2023 13:51

hp on the SHA board make a cracking bearish call on HL about 18 months ago.

Spec, I know you also had some doubts, well perhaps more than some doubts
on the valuation ;.

[mozy123] 23/5/2023 13:50

Its all very strange from Emma Wall and HL.

Then again, when HL run black only internships, and have now started using automated phone services, its probably about time the ship had new leadership. What do they say about good companies run by idiots?

Even Peter Hargreaves is getting a little annoyed of late.

[spectoacc] 23/5/2023 13:42

None the wiser after reading the FT article. Granted, the concern might be valid (LTI IS Nick Train), but can't see it represents anything new.

An attempt by HL to get clients paying fees on fund holdings rather than the much smaller dealing charges on ITs?

But why do this to one of their few cheerleaders? Yes, I'd question Train's judgement - he loves HL!

[flyer61] 22/5/2023 22:30

If you head over to the Lemon fool there is a thread running on this very subject.

[topvest] 22/5/2023 20:10

Agreed - seems a stupid story to me. Lindsell Train run a concentrated portfolio of about 15 stocks. If anything they should dump the few smaller holdings and concentrate further, to fully align with their style. I suspect the person at HL that caused this story has now effectively terminated his career at HL...whilst its fine having an independent view, it is not very sensible to upset your no. 2 largest shareholder on a very judgemental point!

[steve3sandal] 22/5/2023 18:46

Opportunity! Nothing like Woodford. Nothing like SMT. HL ticking a box. The Board has already responded to say its bunkum. Buying quality companies and holding seems like a reasonable strategy.

[essentialinvestor] 22/5/2023 17:59

Surprised no comments here on the FT story.

[flyer61] 16/5/2023 06:11

My total figure guesstimate for Septs payout is £56.41 …..

[flyer61] 16/5/2023 06:04

S3s, on the dividend I’m fully expecting an increase on last year. For the simple reason that LTI now has a record to maintain of annual increases. Looks good to their city mockers and scribes. Combined that Mr Lindsell appears to have been buying regularly for family trusts (grand kids?) and throw 8n the reserves and I’d say it’s nailed on certainty. I’m going for a total payout of 56 quid.

Still think they are reasonable buying at these levels. Try and pick them up on market down days.

Has an6body had any luck with leaving a low ish bid on and it being met?

[steve3sandal] 15/5/2023 19:27

Flyer6115 May '23 - 19:10 - 615 of 615
0 0 0
Don’t forget LT Ltd I think, should now have the thick end of a hundred million of cash on the books.

Indeed. And the Net Profit after 25% corporation tax isn’t £36m either.