Lindsell Train Investment Share Discussion Threads

[chris79] 12/8/2019 18:56

Sorry if this has been answered before. What is the value of the asset management business and what premium does the share price therefore give to the ordinary investments?

[mozy123] 11/8/2019 14:47

oh yea sorry missed that - its still the most viewed fund on hl

[jamielein] 11/8/2019 13:45

@Mozy123 I think he's referring to the NAV update:

"As at 31 July...Funds under management at LTL at 31 July 2019 stood at GBP22,656 million."

[mozy123] 11/8/2019 13:28

riverman - have you seen the july factsheet?

"As I suspected being removed from HL's buy list has had no impact whatsoever"

[riverman77] 11/8/2019 12:52

A couple of very high level comparisons shows the relative value:

Liontrust - market cap 386m, AUM 14bn
Polar Capital - market cap 521m - AUM 14.7bn
Lindsell Train - market cap 431m - AUM 22.7bn

Furthermore, LT is currently seeing much stronger flows than either of these. Of course this does need to be balanced by the key man risk (and key strategy risk) of LT.

[riverman77] 11/8/2019 12:42

Another strong rise in AUM and hence the value of the asset manager. As I suspected being removed from HL's buy list has had no impact whatsoever.

I actually now see this as a value play of sorts - the manager now makes up almost 50% of the trust. But the manager is at least 50% undervalued by any conventional measure (compare the market cap against asset managers with similar AUM), so a 25% premium is justified on the trust.

[aa29] 07/8/2019 17:28

No they don't. It wouldn't get near LTI's quality threshold.

[thaiger] 07/8/2019 17:12

Does anyone know whether LTI holds Burford?

[mozy123] 01/8/2019 10:18

Agree with you there specto - start issuing more stock and drive the premium off. Then it will be even more of a bargin.

Fed cut rates last night so no sign yet of the bond stocks being out of favour.

[spectoacc] 01/8/2019 08:17

Should issue more shares when at a set premium (say 10%), isn't as if they're punting smallcaps, and would have the beneficial effect of reducing the proportion that is the management co stake.

[riverman77] 01/8/2019 08:15

Specto - I think Mr Train is just trying to keep a lid on the share price, he doesn't want this turning into a bubble - it was definitely bubble territory before the sell off.

[purplepelmets] 01/8/2019 07:20

Watching Alan Jope virtue signalling sent chills through my spine. What a total cretin. Unilever’s sole purpose is to create wealth for shareholders. Threatening to dump hugely profitable brands because they are not focused on “saving the world” is the daftest thing I saw since Dianne Abacus. Hope LTI offload Unilever ASAP, it will be the next Get Woke Go Broke.

[steve3sandal] 01/8/2019 07:19

I had held for 10 years until £1937 on the way up. I bought back in a time £1330/40 on the first drop. I’ve a few limit orders at silly prices. The NAV for the LT will be interesting in the next few days. First one after June HL thing and after quite a few stock specific drops. I didn't mind paying a 20% premium on the Directors valuation as someone would eventually pay more. I’m paraphrasing but Nick Train recently said that he and Michael Lindsell would definitely buy more around NAV. They last bought at 8% premium, £236 IIRC, when stock became available in a transaction that I wasn’t available via my broker! I will be doing the math on July NAV as I want my position back, eventually at a reasonable price.

[spectoacc] 01/8/2019 06:59

@riverman77 - Mr Train disagrees with you ;)

And agreed re small number of stocks - also the "bond-like trade", isn't just the risk of another BAG, but the risk of mid-twenties p/e's returning to mid-teens.

[riverman77] 31/7/2019 21:49

No the manager is valued using a very clear methodology based on earnings and AUM. It's all very clearly explained in the annual report. The valuation is also very conservative and works out at around 7 times earnings based on my own calculation and where AUM currently stands (if AUM stays at 21.6bn then they should make a profit of around 60m, while the manager is now valued at about 410m).

I'd say that's pretty low given the strength of inflows and performance. The market is implicitly attaching a c55% premium to the offical nav (pe of 11) which I think can be justified. Yes the stake in the manager is illiquid and will never be realised, but the amount of cash that will be generated over the next 10 years could be collosal if they continue to gather assets.

I don't currently own but definitely interested now. My main concern is that they are very heavily concentrated in a small band of stocks (Diageo, Unilever, etc) - if a couple of these slip up then there could be problems.

[topvest] 31/7/2019 21:06

Chill. It’s a great trust. Could well fall further in the short term. I’m happy to hold my residual holding.

[fundgeneral] 31/7/2019 17:47

this stock needs stopping out
the stake in the manager which is nearly 50% of NAV is highly subjectively valued (does anyone buy star based FM groups now)
the stake in the manager is completely illiquid
better off in MNL

[mozy123] 29/7/2019 09:35

Haha specto - indeed, and I own lots of LSE via FGT, LTI, LTGE, and a direct holding! Loving my monday morning.

[spectoacc] 29/7/2019 08:16

@Mozy123 post 146 ;)

"Actually I think the highest p/e one - LSE - looks relatively "cheap""

[mozy123] 22/7/2019 12:33

People are selling!

[magicmonga] 22/7/2019 12:30

Anyone know why this is falling again today?

[spectoacc] 19/7/2019 16:26

Hadn't twigged this, but of the c.7% Train holds in BRBY, none of it is held within LTI.

That Citywire article above is very interesting IMO. LTI significantly over-valued here if you believe Train.

[spectoacc] 16/7/2019 16:11

Sort of half positive:

"0853 GMT - A profit warning from AG Barr shouldn't have been a surprise given this summer's extreme weather patterns, but the brand challenges should be more concerning, says AJ Bell's Russ Mould. He notes the challenges with Rockstar energy and Rubicon stand out as potential problems the company needs to address. "Management appears to have addressed the issues with a mixture of new product development and recipe improvements, however we won't see the benefit of these actions until later this year or early 2020," he says. "One also has to think that the current sunny weather plays to AG Barr's favor and so it may not be in a sticky patch for too long," Mould adds."

No mention of those possible exceptionals tho.

Edit - nicked from Citywire - @Topvest:

"Writing his latest monthly commentary for the trust, Train said he and Lindsell had no intention of reducing their respective 5.8% and 5.4% stakes in the £300 million trust, but also explained the pair had not added to their holdings for seven years because they believed the independent directors’ valuation of LTL within the trust was ‘fair’.
‘Our longstanding view has been that if we purchase shares above the price of the published NAV we would thereby be signalling that we thought the directors’ valuation was too cautious. We don’t,’ he stated.
Referring to the group’s nascent plans to appoint successors to run the business, Train said. ‘We reiterate last month’s comments that our plans for succession are still at an early stage. Therefore, simply comparing the value of LTL to quoted fund management groups without taking account of succession risk, as some investors seem inclined to do, is misleading.’"