Lindsell Train Investment Share Discussion Threads

[jamielein] 23/2/2024 14:15

I've been holding for a while and decided to top up today. Only time will tell whether that's a good decision. There does seem to be a lot of stock around, so I wouldn't expect any short-term strength.

[flyer61] 22/2/2024 16:44

LT ltd now down to 36% of the NAV. Guessing the market is saying big dividend cut coming. There is lots they could do to make this an attractive place to invest, however will have to hold my breath...

SP can't keep going down as NAV rises.....maybe the board needs to reassess the methodology for valuing the LTLtd stake.

[spectoacc] 22/2/2024 16:35

It's all LT Ltd tho isn't it - would have FGT's discount otherwise.

[flyer61] 22/2/2024 16:27

Terry Smith will be a billionaire by now...

Bought at £815 today and was offered 50 at £816. Still appears a lot to shift.

Wonder what the BOD are thinking....it's a rubbish look at 20+ discount to declared NAV particularly when over half the assets on any given day could be traded at NAV.

Should they be investigating why this is so or just get on with their next cruise....

[spectoacc] 21/2/2024 15:50

Lol, exactly.

Read a few years ago that Mr Train was a Sterling quarter billionaire. A few years back I'm sure shareholders would have happily applauded that.

Trouble is, it's heads they win, tails you lose - whether they're making money or not, they always get their cut.

Again in fairness tho, LTI has lower fees than many.

Terry Smith a half billionaire yet? Rips c.£150m/year out, allegedly, and he too is underperforming the market after years of stellar performance.

[steve3sandal1] 21/2/2024 15:48

I imagine he could afford a yacht too, though not sadly the clients.

[spectoacc] 21/2/2024 15:31

Good luck. Not expensive, just still can't see it as cheap, not with all the outright bargains out there.

Mr Lindsell is continually a buyer - where does he get his money I wonder? Pin money? ;)

[steve3sandal1] 21/2/2024 14:28

Fess up time. I bought a few more yesterday £830. Nav £1033 which it may or may not be. LTI US UT ATH and not tech tech. Nintendo ATH. LSEG getting back towards ATH. 30% there. LTL now 35% whilst being nibbled away substantially funds a 5% dividend if not the 6+% which £51.50 implies. AUM story really. Unilever and Diageo off the canvas, Heineken being bought by the house of Troy as a bargain...Michael L topped up twice around £845 50 and 100 last week. I took something off the Polar Cap Tech table at ATH to average my current LTI down a bit. I could've just stuck pins in my eyes but this seemed more sensible.

[raj k] 19/2/2024 12:53

So the latest LTIT report states they started a new position in UMG. First new position since 2017. i think there is a lot of merit to having a music royalty company and they have bought in their global oeic fund

[flyer61] 01/2/2024 16:22

Still buying this guff today,…will I ever learn. Easy to buy in quantity below £850.

A G Barr update seemed ok.

[steve3sandal] 26/1/2024 17:03

I’m not impressed either. No performance criteria on the share transfer. LTI Board determined that shareholders didn’t need to be consulted about selling our shares to managers who managed to just turn up to work at the Board’s valuation. That valuation might be right but we’ll never see a premium SP/NAV again as our holding will eventually be sold at NAV to the managers. Sadly this is no longer a forever hold for me but I hope to trade my current position when it suits me.

I say sadly as I like to think of myself as a minuscule Buffett type, very miniscuoe, but very long holder is what I mean.

[spectoacc] 26/1/2024 13:54

I just don't buy that L & T - or LT Ltd - have the special sauce. Therefore giving away part of the value of the co in order to retain staff isn't a good look IMO.

Others I know think differently, but there's vanishingly few gurus who outperform over the long term (one died recently aged 99, the others are generally all hedge fund managers eg Georges Soros).

[mozy123] 26/1/2024 13:14

LTL has further expanded its profit share scheme to ensure that key individuals are incentivised to continue to pursue their careers with LTL. From LTL’s current financial year 15% of its net profits, up from 8% last year, will be paid to selected individuals within the scheme. 50% of these profit share payments have to be invested in LTL shares at the prevailing LTL valuation. The shares are sourced from LTL’s founders, Nick Train and Michael Lindsell, and your Company, with the founders providing 75% and your Company 25% after LTL’s Treasury is exhausted. These profit share commitments are perpetual provided that the individual remains in LTL’s employment. This transfer of ownership will mean that the Company’s holding in LTL diminishes slowly over time. The Board believes that by ceding ownership to future successors in this way it builds up an alignment of interests between employees and shareholders to allow LTL to flourish in the future. The number of shares the Company holds in LTL has remained static since 31 March 2019 but from this year will begin to fall, reflecting these sales.

It is intended that these initiatives will accompany a transfer of responsibilities to selected employees to ensure that LTL thrives beyond the founders active involvement. Any change is likely to be incremental as both founders remain bound to the business, having recently renewed their seven year rolling commitment to continue to work at LTL.

The rising profit share payments outlined above should not materially affect the profitability of LTL, as the payments transfer rewards previously destined to the founders to successors within the constraints of LTL’s salary and bonus cap. If LTL increases the profit share awards in the future beyond a certain level it may be necessary to give consideration to amending the salary and bonus cap to accommodate the payments. Any change in the salary and bonus cap will require approval from the Board of this Company.


When LTI is at a discount its in LTI shareholders benefit but over the long term, the only reason people hold LTI over FGT or one of their OEIC's is the leverage and dividend exposure LTL offers.

[giltedge1] 26/1/2024 09:23

Nice upward move today by consumer stocks ULVR, DGE, Burb, if FUM stabilises at 16B end Jan 24, worth topping up at NAV 1020.

[flyer61] 22/1/2024 14:31

Good volume on Friday and today.

I have been trying to model LTL versus other FMs. By FUM it seems expensive, by profitability not so.

[steve3sandal] 18/1/2024 19:54

Another obfuscating RNS. No clarity at all. I’d usually avoid a Co communicating like this but I’m in deep and under water. I don’t like to write half thoughts and guesses but we are in the dark.
It’s a Profit Share Scheme for the other managers at LTL. They don’t get them for free they have to buy them. The figure is set IIRC at 15% (was 8%) of (I guess) Post Tax Profit and (I guess) after Dividends.
LTL 31 Jan PTP was £54m and Dividends were £49m (I have rounded the figures). PSS of £750,000? Once all LTI Treasury shares are exhausted/bought by the managers at LTL to meet the transaction, the Board of LTI resolved to sell down our holding in a ratio of 25/75% with Messrs Lindsell and Train (they support at 75% of the requirement).
We weren’t asked and I’m sore because we can’t replace the LTL dividend income by reinvesting that cash in quoted equities.
Since that 31 Jan LTL YE the last 17 shares were sold out of Treasury, (perhaps to meet prior year ?) and LTI are now having to sell on the 25/75 ratio to meet the latest PSS requirements. LTI had sold 29 LTL shares to the managers since 31 Jan as we recently held 6421. This implies Lindsell and Train sold the managers 87. The latest sale off of 43 implies the managers were simultaneously entitled to buy 129. Obviously we don’t know the LTL performance dates for the PSS allocation but the latest transaction has them laying out £1.975m of which LTI will receive a little less than £500k.
Just my notes so no one should make decisions on the back of this. It occurred to me we might try to establish the ongoing profitability of LTL bearing in mind the PSS figure also comes under the Remuneration cap of 25% of Revenue but it’s late and Ive had a glass of wine.

[spectoacc] 18/1/2024 16:42

I didn't understand the RNS :)

"Sale of Lindsell Train Limited Shares

The Board of Lindsell Train Investment Trust plc ("LTIT") announces that it has
agreed to sell forty-three of its shares in Lindsell Train Limited ("LTL") for
cash to the executive employees of LTL profit share scheme. The shares will be
sold at LTL's prevailing market price of £11,486.20 per share, last calculated
on 31 December 2023. The effective sale on 23 January 2024 will reduce LTIT's
holdings to 6,378 shares of LTL. "


So LTI have sold 43 shares in LTL to the employees of the LTL profit share scheme - ie the co is buying them back for the fulfilment of the share save scheme? Who's losing/who's winning here? Isn't it LTL effectively paying NAV for LTL shares, to give to employees later?

I still don't get it :)

LTI gets some cash in at least. Hopefully to bolster the divi, not for another Nick Train punt.


Edit - profit share scheme, not share save scheme. I understand the latter, not the former. Why would you need to buy in some extra shares for a profit share scheme? Is this non-contributory, unlike a share save?

[flyer61] 18/1/2024 16:36

Nearly there Spec...

Half a million quids worth of LTL sold for CASH at 31 Dec NAV.....a bit more of that and I might actually smile..

[spectoacc] 16/1/2024 20:41

Wish you luck @Flyer61.

Lindsell appears to have bought 34 & 50 shares (an RNS repeat appears to be a price correction). Between him & Mr Flyer61, you have to wonder who's selling ;)

Nudge me if/when it gets over 20% discount.

[steve3sandal1] 16/1/2024 15:05

Michael Lindsell also topping up I think by far much below his last foray. I was intending top up FGT this week but now I'm not so sure.....

[flyer61] 16/1/2024 13:14

Maybe the market has this right and the FUM are still haemorrhaging out. But this discount is now outside 2 standard deviations and this has historically been a good time to buy ITs. Accept that this is a bit of an oddity. If buying here even with a (small) divi cut still looking at 6%.

Continuing to grit my teeth and press the buy button.

[spectoacc] 16/1/2024 07:38

Hoping not for both our sakes ;)

Tax bills - and the rest. Retail money's going to continue to leave the market IMO, as it has been (net) for a few years.

Train's great stock-picking skills and a c.40% weighting to the L-T business was worth a 100% premium on the share price once. What discount when that's in reverse, ie Train's poor 5 year record and a shrinking L-T.

20% seems fair entry point to me, but will it overshoot..

[flyer61] 15/1/2024 18:11

Thanks Spec,

So I have twice bought again today in the 840's. I am betting that LTL's funds under management will stabilise. I'm wondering if some of the selling going on is tax related. We have two reasonable tax bills this month and i'm sure there are many others in the same boat.

Thank goodness for Microsoft! and L'Oreal.

Anybody want to buy 20% of a fund management business....you may yet get your 20% discount for entry Spec..

[spectoacc] 14/1/2024 15:41

I'm not the cynic I was when LTI was on an 80% premium, but I'm ever a cynic of gurus :)

Citywire said this yesterday in their IT review, fwiw (which often isn't much - highly geared?):


"Lindsell’s dog spell
Lindsell Train (LTI), the highly geared £174m play on Michael Lindsell and Nick Train’s fund management business, is buckling under the pressure from results showing investors pulling money out of the boutique’s underperforming quality growth funds. The trust’s shares have lost a third of their value in the past three years to stand on a 15% discount and -2 Z-score. This former top performer once stood on a huge premium of over 100% four years ago so, as I’ve said before, the derating could have further to go."


Agree re @s3s1's point about the L-T business being probably fairly valued - in fairness, what Train said all along.

Key man risk remains, as does the absence of an end in sight to money leaving the markets - could well last for years, taxes aren't going down anytime soon, living costs aren't falling (even supposing inflation hits 2% target, that's a slowing in the rate of increase).

Always thought a 20% discount would be a good buy, but would I pull the trigger if it went there..

Wasn't BRBY another Train favourite? He'll be averaging down like crazy as per usual. Works until it doesn't.

(Edit - BRBY 6th largest holding in FGT, isn't in LTI Top 10 acc HL. Have a feeling I've had this discussion before, tho possibly about HL itself).

LTI isn't untempting down here, I'll admit, on yield & discount. Good luck holders, even if I'm not one.


Edit #2 - at risk of flogging a horse: the IC have a table of CAGR for past 5 years for 10 FTSE 100, & 10 S&P co's.

Interesting that DGE managed just 2.4% pa CAGR, ULVR 2.2% CAGR. Yes, RELX managed a strong 16.7%, but even they were beaten by RIO. You could have got 16.6% in AZN, 4.2% in HSBC for eg.

But of course it's the S&P where the big figures are - without picking any obvious tech leaders, there was 42% CAGR to be had in Eli Lilly, 38.4% in Apple, 14% in VISA. Don't even ask about Nvidia.

How good a stock picker is Mr Train? The past 5 years say "really not very good". I've been in none of the US top 10 either, but then neither have I been in arguably ex-growth, too high p/e DGE & ULVR.

Your turn, @Flyer61 ;)