Lindsell Train Investment Share Discussion Threads

[spectoacc] 13/6/2023 06:55

They do say:

"..As the LTL dividend now represents 84% of the Company's total revenues (a much higher percentage compared with earlier years), depleting revenue reserves to simply maintain the dividend without some assurance that those reserves would soon be replenished might not be in the best interests of shareholders"

and I think there's honesty in acknowledging the divi will likely be cut again next year.

I need to read it all thoroughly, but won't happen today.

[flyer61] 13/6/2023 06:52

Hmmmm.....yep hat eating as I type. Disappointed is an understatement. Having thought the management (owners) were playing with a straight bat I am now not so sure.

[steve3sandal] 13/6/2023 06:24

Hmmm. Results and perhaps more importantly the profit share plan have more clarity in this commentary. Not got time to study it all yet but whilst succession is partly being looked after private shareholders won’t ever get to own one of those yachts. I wouldn’t be surprised to see some selling this morning.

[spectoacc] 13/6/2023 06:22

"A final dividend of £51.50 per Ordinary Share (2022: a final dividend of £51.12 and a special dividend of £1.88) is proposed for the year ended 31 March 2023."

"The Board proposes to pay a total dividend for the year to 31 March 2023 of £51.50 per share which represents a small 0.7% rise in the ordinary dividend from £51.12. No special dividend will be paid this year as LTL did not earn any performance fees."

"It represents a 2.8% fall in the total dividend"

"We do not know what 2023 will bring for LTL, but at current levels of FUM the LTL dividend is likely to fall again in its year ending January 2024."


Enjoy your hat breakfast @Flyers61 ;)


This was interesting:

"As the share transfers resulting from profit share awards increase, so the utility and importance of LTL's valuation expands from primarily determining a monthly price for LTL's shares to becoming the price that governs the transfer of value between founders, employees and the Company."

[flyer61] 12/6/2023 08:19

Dividend will go up by 5% - I'll eat me hat if there isn't a rise.

12% of SIPP, you are over diversifying ;-)

[giltedge1] 12/6/2023 07:40

Thanks Steve for update, I was surprised by fall, not helpful reporting monthly AUM most Asset managers report quarterly so can smooth volatility. Looks like bad media comment rather than trading results, so still hopeful. DGE lawsuit by pop star. Relx AI comments, disputed by Co ULVR sector rotation & end of buyback. Burb good results big div increase but marked down by market. On plus LSEG recovering to highs, HL finally rising due to higher interest rates I presume. All seem to be recovering today, a week is a long time in the stockmarket!. I am over exposed here ar 12% SIPP so a lesson for others! Announcing this week hope div maintained although profit obviously down due to lower AUM. Positive on main holdings, advised LTI last year too much duplication between UK & Global funds, should hold more US stocks. Seems James manager not keen.

[essentialinvestor] 11/6/2023 15:54

UKVR is down just under 9% on this time last month,
DGE down 8%.

Tech stocks sucking in more funds at a guess, coupled with inflationary concerns on
consumer discretionary.

[spectoacc] 11/6/2023 14:03

Maybe, but surely only part - other holdings will have gone up, eg:


Shows the interesting dynamics at play in LTI. When markets are going up, and the strategy doing well, and AUM expanding, there's a triple-whammy of uplift, aided by expanding premium, due to the outsized c.40% of LTI that is L-T.

All those things work in reverse on the way down. Which is why even with the NAV drop, they're still at a slight discount.

Mug's game calling the bottom - I'll be gradually in.

[riverman77] 09/6/2023 20:32

Quite big drop in AUM. Looks like some of their core holdings that they hold across their funds fell quite a lot in May (Diageo, Unilever, etc) so that probably explains part of it.

[steve3sandal] 09/6/2023 20:14

It is announced that the un-audited Net Asset Value (inclusive of accumulated
income) of The Lindsell Train Investment Trust plc ("LTIT"), which is managed by
Lindsell Train Limited ("LTL"), at the below date was as follows:

31 May 2023 £1,029.01 per Ordinary share.

The above NAV figure is based on a revised valuation for LTIT's holding of 6,450
shares in LTL.

As at 31 May 2023, LTL shares were valued at £12,249.16 per share, a decrease of
9.3% from the valuation of £13,507.32 per share as at the previous monthly
valuation on 30 April 2023. LTL's valuation is calculated with reference to a
ratio of annualised notional net profits of £33.2m to Funds Under Management at
LTL of £17.6 billion resulting in a percentage of funds under management of
1.85%.

As at 30 April AUM was £18.9Bn. I’m guessing that they must have lost an institutional mandate to drop £1.3Bn in a month. Perhaps a post year end update will be included in the Mar FY Results next week as this is quite significant. Ouch.

[jamielein] 09/6/2023 11:48

Latest NAV is quite a bit lower due to 9% decline in valuation of LTL, so discount isn't as large as it appeared.

[spectoacc] 09/6/2023 09:46

Sometimes inside, but often outside too - eg 50 shares to buy is currently 102,999.999, to sell is 99,800. Big spread.

Eg 25 shares - only £25k - is 100,500 to sell, but still 102,999.999 to buy.

[steve3sandal] 09/6/2023 09:28

R77, usually quote is quite wide as you flag. However at times this does close significantly, I’m guessing just supply and demand. My view is the MMs don’t want to hold a lot of stock. At around this discount and £1000 I’m checking in quite regularly and you’ll note above quite a few dealt around £1000 this week. I suspect the actual NAV updates are being held over (last effective 26 May) pending FY Results next week so I’m guessing at the word discount just now.

[riverman77] 09/6/2023 08:50

Looking good value now and keen to take a position, although wide spread is putting me off (looks like it's about 3% and very reluctant to effectively take an immediate 3% hit to my position).

[giltedge1] 08/6/2023 12:31

Yes I rate SHC a buy, but a long game of course, once interst rates start falling. Great Assets, fully let but had to refinance bonds on merger with expensive debt, so merger gains, lost on interest charges.
Every time I visit, notice buzzing with tourists & no vacancies. But I can't buy every stock!. Try & limit to 20.
Back to LTI in for long haul, have held last 5 years.

[essentialinvestor] 08/6/2023 12:25

Nicely done.


gilt, I like SHC longer term, you've posted there previously from memory.

[giltedge1] 08/6/2023 11:52

LTI jumps to 1030/1040 midday then a determined seller appears, suppose have to clear his trade, before meaningful gain. Of NT portfolio, currently trading HL, posted buy sub £8, last week.

[essentialinvestor] 08/6/2023 08:59

The bearish thesis saw the end of ZIRP corresponding
with big equity draw downs. Outside of certain parts of the market this
has not happened, which tbf has surprised me.

The old adage is buying a cyclical stock on a low multiple is an efficient way
to destroy capital as this often indicates peak cycle earnings.
Many cyclical stocks are currently available on very low multiples -
either the market has it wrong (may be the case) or earnings
may look weaker over the next year. or so.

I can't call this, as per the comment on finding markets very difficult to read atm.

[flyer61] 08/6/2023 07:56

There are worst places than LTI to park yourself. The higher for longer is definitely my thinking as well. But no real pain seen as yet. Jobs galore and no one wants to work because the state will happily take you to the grave if you want to.

As Buffett said when the tide goes out you see whose not wearing any clothes.

The tide appears still to be in. Maybe like all these things the thesis is correct it just takes a long time to play out...told you so might be a over a year or two away .
A relation talked about inflation coming back from about 2013 but it never happened for the thick end of a decade. Surely this will play out quicker.....

[essentialinvestor] 08/6/2023 07:17

Spec, I'm hoping there may be decent value in cyclical stocks later this year.

Very difficult market to read atm as mentioned elsewhere.

[spectoacc] 08/6/2023 06:51

Agree re US - S&P on cusp of a new bull market, it's farcical. There's simply far too much money around still. Add that to employment, and avg wage settlements, and whilst both are starting to head vaguely in the right direction, neither imply a sustainable return to anywhere near inflation target.

Which means - as it has all along - rates higher, for longer, with everything that implies. Not sure I see the UK getting to 5.5% but nor can I foresee any cuts ahead, and we're starting to see refinancings bite hard. Co's enjoyed cheap debt for more than a decade, and sensibly fixed well into the current period, but it's the rollovers that whack margins.

For how long will UK rates need to be kept up for the BoE to recover its reputation?

I like that Alex Wright point but perhaps he needed to pick something other than a bank - there's small caps on similar single-digit p/e's. Or perhaps a housebuilder.

We're at a weird stage in the market where there's dirt cheap (banks, financials, asset managers, housebuilders etc) and highly-rated, but if recession is coming, are the first group value traps? Been mulling the builders but also recalling that the time to buy them isn't when p/e 6 and divi 9%. It's when p/e 50 and divi 0% :)

Saying all that - do have some LGEN, p/e 6, (growing) divi 8%. My sole financial.

@EI - good luck DGE, tho might struggle to make a case for more than FV atm?

[essentialinvestor] 07/6/2023 19:40

Added some DGE today fwiw, increased uncertainty around the CEO transition
and slowing US market, longer term rising rates are certainly a headwind given
the yield. I personally do not invest for income, but appreciate many others do
and will view the current DGE payout as too low.

If markets were to sell off hard, or trading disappoints, DGE may be available at a 3% plus yield.

On BARC, every time they look set fair, another scandal breaks.
Can see the case for a small BARC holding.

[topvest] 07/6/2023 19:20

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 18:51

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 17:12

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.