Lindsell Train Investment Share Discussion Threads

[fabius1] 29/2/2024 13:10

Based on Train's comments in an interview regarding his preferred US style 'modus operandi' of reinvestment, I believe the divi is a red herring in the sense that LTI is not primarily an income fund and therefore any payouts are incidental and merely reflect the underlying investment yields/cash flows. A designated income fund is always under pressure to increase the payout where possible.

[flyer61] 29/2/2024 12:56

Decided to crunch the numbers again assuming LTL FUM of £16B which valuing it's implied profitability on a PE of 6 would be 1 LTL share is worth circa £7000. Our stake (6378 shares) £44/45 million so £30M less than what it is accounted for. So you could make a case that NAV is actually more like £177M.

So you are buying here at my adjusted discount to NAV of 10 per cent.

What do others think???

[flyer61] 29/2/2024 12:44

Do you think LTL is worth a PE of 9.9 or 6? If you think 6 then LTI it at best fairly valued...

If you take the view that LTL is still producing the dividends to feed LTI and it's dividend then now is probably a good entry point....

Have a good look at pages 84 and 85 of LTI's last annual report.

Of course this continuous drop in the share price could all just be the general market malaise...

[steve3sandal] 29/2/2024 12:32

I’m just waiting now to see if £780 from Oct 23 holds.

[raj k] 29/2/2024 11:36

LTI is really testing our nerves. I purchased a few more shares yesterday at £796. Its fallen a bit more today.

[giltedge1] 29/2/2024 09:24

Hello SpectoAcc welcome aboard, hopefully performance will now improve, my worst performer 2023, hard to believe I sold some back in 2021 for £ 1500, those were the days!.
Going forward, looking at ways to improve SP, previous chairman was against buybacks, maybe you can influence as now new chairman. Could sell seed capital in LT US fund
Also wouldn't split shares & make more marketable, even though private LT split theirs. Hopefully new chairman will make changes.

[flyer61] 28/2/2024 09:56

Lets hope your patience for an acceptable entry price is rewarded Spec. You might like to look at the modelling they have used in the accounts for the LTL stake.

No Reckitts or St James here!

[mozy123] 28/2/2024 09:18

Good luck Specto!

The discount is every attractive.

[spectoacc] 28/2/2024 09:15

A little nervous to declare after what happened with my only previous foray into a Train vehicle (in at 1000, out again about the same), but possibly the start of a holding, against my better judgement (but everything has a price):

"100 shares bought at 79,578p".

I'd say that quote, on a spread of 792/846, says all you need to know about the selling pressure atm.

[flyer61] 27/2/2024 10:59

Of course we might get 'consumed' by FGT. Selling it to them on the basis they will get a higher income with the LTL stake.

Something has to give here.....65% of portfolio easily realisable at it's NAV. The 35% has a very good income stream (albeit variable)attached to it.

i'm expecting something from the board.

[spectoacc] 26/2/2024 16:08

Thanks @EI - sad to see. RCP lost its way a bit after he left, by going too much into unlisteds. Haven't looked at it in a while so can't say I've much opinion.

Just read a Mr R obituary - hadn't realised he'd also set up St James's Place.

[essentialinvestor] 26/2/2024 15:05

Spec, your caution on RIT has been validated. JR just passed.

A great trust for many, many years.

[giltedge1] 26/2/2024 13:51

Performance is improving RELX, Mond, Sage, EXP, Nintendo have been stars. Global Fund last 5 Years +30%, World Index Tracker +55% mainly due to top 7 USA stars. Can this repeat?. UK Fund 5 years +30%, same as Index, & on the improve. FUM stable at £16B, can see no reason to sell this collection of Blue Chips. Guess NT/ML will leave to family as ego's will want name to live on!. On reflection seems cheap at £ 8.10, with liquid portfolio & 20% discount.

[flyer61] 26/2/2024 13:48

blaming shareholders just doesn't cut it...

[flyer61] 26/2/2024 13:48

Agreed Spec....ergo why the board need to 'refresh' the trust....

[flyer61] 26/2/2024 13:46

Mr Lindsells family trust already owns about 1.5% of the trust besides his personal holding.

The catalyst for the discount to narrow would be simple.

1000 for 1 split
Monthly dividend....

if they cannot stomach that then a 100 for 1 split and quarterly dividends based on 1% of NAV at each payment.

your welcome...

[spectoacc] 26/2/2024 13:44

I note this:

"...A minimum objective to maintain the real
purchasing power of Sterling capital..."

in conjunction with a NAV down over 3 years, and about flat over 1 (at a time when inflation hit 11%).

Share price considerably worse but they've less control over that - down 44% over 5 years, down 38% over 3, down 32% over 2, down 21% over 1.

Figs from HL so probably all without divi reinvested. But still.

What would concern me, if I were a shareholder, is that they're completely unconstrained, yet have achieved this performance at a time when the US has been going gangbusters, the Nikkei has finally hit a 38 yr high, and even the FTSE is up a little.

[spectoacc] 26/2/2024 13:30

Mildly tempted, but would I sell ERNS for it, or CGT, or SGLN?

Hmm, no.

Can't see a catalyst for the discount to close.

Re Mr L & Mr T - can't personally see them selling, they'd likely pass the shares on to heirs when the time comes IMO, or perhaps gift into a charitable trust (which itself may drip-feed sells).

Considerably more IHT-friendly passing on a business to passing on cash/assets.

[flyer61] 26/2/2024 13:25

Plenty on offer....someone really wants out...

[steve3sandal1] 26/2/2024 12:33

Who knows. I guess their tax planning will be central to how it plays out. The Board will need to provide some clarity down the line as the current micro sell away structure they approved probably contributed to the current share price and discount malaise.

[raj k] 26/2/2024 12:10

Can we assume that Lindsell and Train will sell their Business when the retire? Isnt it plausible that they will retain their holding and allow the junior members to carry on running the business, maybe transferring (selling) more shares to them slowly?

Or will they all just sell their stakes when the main two want to call it a day?

[steve3sandal1] 24/2/2024 17:07

The new management profit incentive scheme appears to transfer a small % of LTL to James, Madeline et al each year. Lindsell and Train have committed to another 6/7 years. The current scheme will still leave them with an overwhelming majority of the shares. So they will still need to sell LTL to a third party as the managers probably can't raise sufficient funds. What's it worth with a PE of 6 and £90m cash on the balance sheet. I don't know but more than the current director valuation. Unfortunately AUM is melting away partly because money flows are going to passives and LTL strategies have underperformed a modest benchmark for 3 years. Nick Train is now banging the data data data from to catch a sprat from AI fund flows. Fortunately although I've backed up the truck again other portfolio holdings have increased in value so my auditor will note I'm still under 10%.

[flyer61] 24/2/2024 16:43

I like it! however the only thing we have here is a 'languishing trust' and a BOD consisting of our 'betters'. It is a definitely not a good look but who actually cares.

If you model LTL on a PE of 6 then this looks fairly priced. Given the dire rating given to FM businesses I wouldn't be surprised to see the methodology for the valuation of our stake in LTL redone. This will solve the discount in a flash!

Job done....

I still like the underlying Companies Train has picked.

[giltedge1] 24/2/2024 16:18

Hello Steve3 & Flyer61 what are odds of NT/ML takeover at NAV only cost £75m can sell portfolio & cash on Balance sheet also entitled to 25% cash held by LT, almost self financing & remove languishing trust from public view. Maybe after YE Accounts.Petty cash to them.

[giltedge1] 23/2/2024 15:35

Seems a bargain at 8.10, last 5 years NAV up 40%, Relx, Expn, Sage, Nintendo flying, ULVR & DGE recovering. All well up 5 _ 10 years. Tempted to average down. All about FUM I suppose, hopefully div maintained around 50 2024, previous years well covered so can use reserves if needed.