Lindsell Train Investment Share Discussion Threads

[giltedge1] 20/6/2023 11:42

Michael Lindsell back buying helps sentiment.

[essentialinvestor] 16/6/2023 08:11

ULVR payout ratio is too high imho, however agree they look reasonably placed.

Unilever may face criticism from certain quarters for ..brands with purpose etc,
but those individuals might take a look at KHC and their dismal recent performance -
arguably a failure to adequately innovate and reposition towards higher growth categories.

[spectoacc] 16/6/2023 06:45

@giltedge1 - I'm not in Buffett either :) He's so large that his pool of investments is very small, no great surprise he's invested in Apple.

Think I can be moderately confident ULVR, LSEG, RELX are no Apple. But fair point - the salience heuristic, isn't impossible eg ULVR becomes a trillion pound co eventually. Logically, it will given enough years.

[giltedge1] 15/6/2023 20:48

@specto Buffett has 40% of his funds in Apple a 3 Trillion Co. Makes Ulvr, Dge, Lseg look like a small cap. What future for Buffett funds?.

[giltedge1] 15/6/2023 14:45

Main holdings all up today ULVR, LSEG, RELX but sentiment against at moment, need FUM to push upwards, & then will rise, small free float, so can have a swift rise if all stocks firing. Am in too deep to add, average 1050, had div last Yr so slightly down. Last trade a few years ago, sold at nearly 1400, so not impossible to make a good return. Keeping the faith, as an aside a NT share, BARR looks a great buy at £4.87.

[spectoacc] 15/6/2023 06:35

I've no FGT either :)

Re 10 years - raises an interesting point. Will be fluffing my stats, but saw an article listing LTI as one of the best performing ITs over I think 20 years (not sure to what date), returning something like 17x your money.

What's not to like? Well - knowing Mr Train will change very little in the portfolio - what chance another 17x? Or say 10x:

LSEG, £48bn
DGE, £75bn
ULVR, £100bn
RELX, £49bn


I know compounding is a powerful force, and never say never, but can you see LSEG at half a trillion, DGE at £750bn, ULVR at a trillion, RELX at half a trillion? I just can't.

Elephants don't gallop. Which doesn't mean they're not still decent investments, but wouldn't you rather be at the single-digit p/e small/mid cap end? OK perhaps not just yet, but when the end of ZIRP crash has played out.

[topvest] 14/6/2023 21:47

Well the outlook is a tad more challenging. I agree that FGT is a better play in the short-term and I now have about x6 the holding in FGT versus LIT. I only have 1/15th of my original holding after having 6 bagged on this overall. Could have done better, but its been a good holding since 2009. Think I will keep my small holding for now. The trouble with single style investment managers is that when they go through a sticky patch and lose momentum its not going to turn around particularly quickly. I'm inclined to agree that the "glory days" are over for Nick Train unless he stays on for another decade or so!

[spectoacc] 14/6/2023 13:38

@giltedge1 - I have done, but taken a slight loss due to the stamp duty.

Good luck holders - I still rate (most) of the holdings, but have upped the size of the discount I need before I get back in.

IMO the Train/LTI glory days are behind them, albeit you'll never lose your shirt. Maybe someone once said the same about Buffett, but he's the exception that proves the rule (& it's Charlie Munger I'm the fan of, Buffett without the PR).

[giltedge1] 14/6/2023 10:35

Just to update stats, P&L £55M after tax latest LT Accounts YE 31/01/2023 at end of yesterdays results.
FGT 5 Yr 26% 10Yr 140% May 2023 fact sheet.
Man U takeover going through, small holding in Global Fund, adds to sentiment strategy correct. Most major holdings now steady or rising.
@specto can sell out if negative as you bought a few days ago @998, quick profit.

[flyer61] 14/6/2023 10:15

Indeed….more humble pie eaten…

Do you ever think things are stacked against the average Jo in Britain…

[spectoacc] 14/6/2023 08:17

Just an aside - "Hargreaves Lansdown were right". Suspect we've just got to the bottom of that one.

[spectoacc] 14/6/2023 08:10

If you want to see how the bearish pro's are positioned, can well recommend a quick look at the Top 10's of PNL, RICA, CGT. Those are nearer to where I want to be atm (been buying Gilts in size).

[flyer61] 14/6/2023 08:06

Think I might just buy Caledonia instead….they appear to play with a straight bat..

What’s good for old man Cayzers descendants is probably ok for me too…

[flyer61] 14/6/2023 08:02

Those pesky foreign holdings like MSFT and NOvo Nordisk would have looked rather nice in LTI!

S3S, when you express your displeasure to the Sec why not mention it might be better for ALL shareholders that they look at a trade sale for our LTL stake….

[spectoacc] 14/6/2023 07:58

Fundsmith much harder to replicate - foreign holdings, trades in & out constantly (eg Dominoes; Amazon). LTI/FGT are small number of holdings, rarely changed, with only the L-T business impossible to replicate - and now it turns out we maybe wouldn't want to :)

(And the few foreign holdings - tho WT can be avoided on some).

[flyer61] 14/6/2023 07:47

‘Discretionary salary cost base’……this!

Having tried to replicate Fundsmith in my SIPP it was not easy and I eventually gave up and settled for 10 direct holdings.

I hadn’t fully appreciated how much of LTL’s lunch has been eaten by others like Premier Miton etc.

[spectoacc] 14/6/2023 07:32

Or just buy the FGT Top 10? Something you can't do with LTI (unless you work for L-T).

Good points - IMO if they wanted to incentivise staff, get them to buy LTI shares - they'd get the stake in L-T and benefit from their custodianship of the IT.

Could well argue whether LTI - as a minority shareholder in L-T - is being treated equitably.

(Good point re p/e, most ignore tax but it's always post-tax).


Edit - Heineken & Mondelez would be the only tricky ones (withholding taxes etc), but buying RELX, DGE, BRBY, LSEG, ULVR would get you more than half of FGT, without the 0.63% ongoing charge. Add SDR, EXPN, SGE for another 20%.

Didn't include divis in FGT performance - has done slightly better but still fairly naff.

[steve3sandal] 14/6/2023 07:23

I think the £55m will be pre tax so you should really take 25% off that for PE multiples. The £55m is partly a function of their earnings but then subject to what I would call a discretionary salary cost base. We can talk around the numbers all day but there is an intention to transfer part of our LTL holding to employees at a discretionary rates, now 15% profit share (8%) but could be any number. I will try and figure out what that looks like once LTL Accounts are available, usually September. Like someone said earlier they held LTI for a share in LTL and so did I.

I don’t think it is right to profit share transfer 75/25 ratio. I know that was the ownership ratio. Quoted LTI repeatedly stated this 25% holding is to participate in the success of LTL, later this 24.2% holding is to …. Never going to win a debate or vote with majority owners but I’ll probably fire off a very cross email to the Secretary. I can’t make a London AGM but perhaps they’ll take an email question? At the end of the day LTI economic interest in LTL is going to be reduced even if LTL isn’t successful as it’s 15% of profit in shares even if their investment performance is less than average.

I’m guilty of spending too much time on LTI and it turns out there is something of a value trap. Strategically I should probably tilt from this Co to FGT. Hmmm.

[spectoacc] 14/6/2023 07:18

Hmm thanks @Flyers61. Isn't lost on me that I've bought for the first time just as most of what I've been saying on here for years is coming true :) Train's a quarter billionaire - good on him, but the problem with the fund management industry is the fees don't come back to you when the performance reverses.

Bond proxies, change to the risk-free, reversal of valuation/premium when times are tougher - but still happy to be in at a discount.

Re FGT - +7.5% over 5 years, is positive now at least.

[giltedge1] 13/6/2023 23:19

10x earnings is £550m 10x £55m so 25% is well over Directors valuation, as stated. Granted 2023 not started well but for a concentrated quality portfolio can change very quickly, hopefully up.

[riverman77] 13/6/2023 19:42

Looks like LTL is currently valued at the equivalent of about 10x earnings (I know they have their own formula but to keep it simple I like to use this measure). I'd say this is more than enough relative to other listed fund managers, and given LTL is currently in outflow and very key man dependent. On that basis, FGT might be the better and simpler option right now.
Don't hold either at moment but keeping a close eye as suspect quality/growth will come back into favour soon as US inflation and rates fall.

[giltedge1] 13/6/2023 16:10

EPS 61, Div 51.5 so fully covered with room to spare. 2 years div in reserves. Mgt fees fully charged to income unlike other inv trusts charge at least 50% to capital. So a clean P&L. Stake in LT valued at £85m Polar Capital same AUM as at 31/03, 25% £137m, so a good £50m short or 25% NAV. Also positives LT Mgt Co. £100m cash, 2 years div again in reserve. Underlying holdings all trading well, LSEG, RELX & now Nintendo pushing higher last few days MDLZ a star last 5 years. So keeping the faith. But of course need FUM to start pushing back to £20B, to create positive sentiment. I am fully invested, so would need a meaningful gain in FUM to add.

[essentialinvestor] 13/6/2023 11:06

FGT NAV discount is approx 4% ATM, given falling AUM you could make a case
that LTI is pretty fairly valued ?.

[mozy123] 13/6/2023 10:27

Wonderful - they are going to be selling LTL shares at a low to the employee bonus schemes.

The only reason to hold LTI is for exposure to LTL.

Hmmmmmm

Overtime this is just going to turn into an FGT?