Lindsell Train Investment Share Discussion Threads

[kenmitch] 16/4/2019 22:24

JackRuss2 and if anyone isn’t clear about the 70% premium.

Nick Train warned last December that the share price was overvalued. Then NAV was £835 and the share price was £1210. So investors were paying £1210 for something worth £835!!

Here’s a link to his warning.



Now the premium is much higher still. NAV has gone up £900 but now the premium is over 70% and share is £1650. That’s a crazy overvaluation. One day it will surely end in tears for investors who bought the bubble. This Trust has a great record but it is inflated by the ridiculous premium to NAV.

The ever growing premium is the main reason for the share price soaring, instead of, as is normal, their investments going up fast. If this was a normal investment trust trading around par the share price would only be £900.

And some Investment Trusts are trading at big discounts. E.g Riverstone is at 30% discount. If Lindsell train was at a 30% discount the share price would be £630.

[riverman77] 16/4/2019 21:28

I fail to see why the investment management company is valued so highly. 5.6% of AUM (the figure mentioned in a post above, not my calculation) is very high in anyone's book - 2-3% is typical for the sector.

Furthermore its value will surely never be realised - I can't see how this could IPO or be bought out. It's also totally dependent on a couple of individuals, so when they eventually retire there'll probably be no company left. I guess they could hand the reins to someone else, but Nick Train is a very unique talent, so I can't really see this happening. In these circumstances surely it should be at a discount not a premium?

[topvest] 16/4/2019 20:34

This has come a long way since I started this thread in 2009. What a share this has been!

[jackruss2] 16/4/2019 19:02

Thx for that DrRobin

[drrobin] 16/4/2019 17:22

Yes and no.
Yes - 70% premium is very worrying, look back at their historical premium, it has never gone over this. Mid 2016 it was the same high premium, it fell towards the end of 2016, the share price also fell, but soon recovered, indicating the NAV (and premium) were not particular accurate. Inother words the NAV came up.

No - 46% of LTI is invested in Lindsell Train Limited and if they don't quote net worth all that often (or at all) then it is very difficult to assess.

Historically Premium has been around 30%.

I am holding LTI for the present, 5.xx% increase today, nice.

[jackruss2] 16/4/2019 16:50

Is the 70% premium anything to worry about?

[steve3sandal] 06/2/2019 20:23

Held over 10 years and my best idea by far. Sold down to about a third now. Premium at the mid close is 68%. Ran some numbers and I agree their AUM metric is somewhat dated when viewed against peers, and LTI record is better. If I strip out the quoted £92M the Directors valuation of LT is £78.6M meaning market values LT at £194M, about 2.46x the Directors valuation. £286.5M market cap, £16.434Bn AUM, looks to be a market valuation at 5.6% AUM. High, but not outrageously so. Enough to reduce my position As I feel the market might rotate style away from some of the quoted portfolio. I have been using some of the proceeds to top up Finsbury G&I to retain a high exposure but also free up cash for other ideas. I’ve sold at 50% premium and bought back at 20% premium a few times and would love to do that trick again.

[topvest] 01/2/2019 21:51

Lindsell Train Limited is valued at c1.5% AUM. This is quite low versus the average investment manager valuation which is 2-3%. 2% on average. Lindsell Train is NOT an average fund manager, so I personally think its worth twice the valuation ascribed by the directors. Hence, the premium!

[drrobin] 01/2/2019 14:04

The lastime LTI premium went over 60% the rot set in and it's value was corrected. Anyone know what is driving the price up so much? I can't find any news.

[essentialinvestor] 01/2/2019 13:21

I'm not making a case to sell it, just referencing the premium on buying now.

[essentialinvestor] 01/2/2019 13:00

As ULVR is my largest holding I need no convincing of their equity strategy.
However, paying that type of premium 10 years in to a bull market
might prove a tad costly, just imv only.

[drrobin] 01/2/2019 12:54

Something happening at LTI?

Premium to NAV now at 55%!

[spectoacc] 18/12/2018 15:18

@ifthecap - most seem to think the Trust undervalues the stake in the management co. Personally I disagree - it's a one-way bet when all going well, but a one-way bet downwards when the multi-year bull in "quality stocks" ends.

[mozy123] 18/12/2018 15:07

yes you are itcf. But its probably cheap. Will leave you to find out why.

[ifthecapfits] 18/12/2018 14:46

Am i reading this right - this trades on at a 43% premium!

[spectoacc] 09/7/2018 13:43

@Mozy123 - death? There's certainly Key Man risk, irrespective of "new managers could do it".

Hopefully Train & Lindsell will never fall out, perhaps after a few years of massive underperformance ;0)

[mozy123] 09/7/2018 13:40

Nick Train himself admits doing very little, portfolio churning wise. He reads and reads and reads. Why would he retire? He loves what he does, and to be a multi millionaire for reading. Why stop. :)

[topvest] 09/7/2018 09:13

I hold this partly because of the Lindsell Train stake. I think its prudently valued and so the premium is warranted. Its frankly quite ridiculous / excessively cautious to assume that Lindsell Train will cease trading when the two founders retire as their strategy can be handed over to the new managers coming in to the organisation.

[mozy123] 09/7/2018 08:54

Nice not steve, hold the same view, but dont own LTI. LT Global Equity, finsbury and Fundsmith make up 40% of my assets.

[steve3sandal] 08/7/2018 22:34

Just a quick check in. The IC recently suggested selling LTI and switching into their Global Equity UT as the premium was extremely high. This followed the Directors recent warning that buyers should understand the risk of buying at a large premium when issuing their 31 Mar Accounts. The share price has indeed come off by about 10% since the Accounts were published.
Meanwhile, since 31 Mar Lindsell and Train have overseen a 10% increase in AUM to £14.7Bn and the directors valuation of the asset management business has increased about 10%. Not a bad effort in these 3 months. 30 June NAV is £813, so premium is probably back just under 20%. The succession risks were well discussed in the Accounts. I recently bought some more and I certainly didn’t get them off Lindsell or Train. Any further share price weakness and I will be having some more as I am in the camp that thinks the Management company is undervalued in the NAV calculation.

[spectoacc] 26/3/2018 16:26

A few more "look at my lovely smile and stubble" articles on Train, but nothing new there.

[mozy123] 26/3/2018 16:26

Yes I did wonder what was going on here.

[spectoacc] 26/3/2018 15:57

A bit... strong?

[steve3sandal] 27/11/2017 20:27

I am not put off by the premium here. I have traded it many times over the years. Selling some last year over £900 and buying back this year at £732. The discount is now as tight as I can recall for sometime. LTI valuation is well disclosed in the recent half year Accounts being an average of 2 methods. My quick mental calculation using their DCF method alone has the NAV of this trust about 8% higher than stated. Valn 1.5% of AUM is pretty conservative IMO. I am bought into their methodology, and the future of their brands, and I will try and pinch some more if the share price continues to drift to £750. Just my view.

[jonwig] 27/11/2017 06:57

Citywire on LTI:



Not a holder (put off by premium) but do hold FGT.