Majedie Investments Share Discussion Threads

[andycapp1] 15/4/2021 09:20

Sorry cut myself off!! Yes it’s a bit odd, reflected in the discount I guess. They should buy back shares, the fees are too high and the ring a ring a roses with MAM is off putting albeit I can see why it is as it is, and it’s not unique. But the structure, as with NAS, weighs and unlike NAS/Mills the performance is nowhere near as good albeit maybe the governance is a bit more transparent? Dunno. I own a big slug of it and I think I’m ok but be interesting to see how the MAM NAV develops.

[andycapp1] 15/4/2021 09:05

Not sure how old De Uphaugh is now? Late 50’s?? The senior guys must own a big slug of the equity. What’s Barlow like? I tried Googling him and he’s a bit enigmatic to say least. Isn’t the family the one who sold rubber plantation and rolled into the Trust? It’s a funny structure and few things need sorting.

[makinbuks] 14/4/2021 15:55

Don't expect them to do anything as its only recently they changed the method of valuation when AUM was declining. As you pointed out AUM should now be significantly higher given MAM's value reputation so we'll see an upward valuation I hope. Another question is what is the plan for the MAM stake in the medium/long term. What are MAM themselves thinking? I had dealings with the guys when they established the business back in the early noughties and they must all be looking for an exit fairly soon. When MAJE was selling down their stake it was management that was buying up the stock. Not sure there's going to be appetite for that now. Might we see a takeover?

[andycapp1] 14/4/2021 13:51

Interestingly quarterly valuation date for MAM is about 5 May so see what they do there. I’ve reviewed valuation methodology and it’s v conservative.

[makinbuks] 13/4/2021 23:48

Yes agree with all that. If MAM is perceived by the market as conservatively valued we should be trading at a premium in anticipation of mark ups. I had hoped the discount would have narrowed with the value/UK rally to high single digits. So although we're now very close to my £2.43 target price I'm hanging on for now for that correction

[andycapp1] 13/4/2021 22:35

Yup agree with all that. Key is NAV (obvs)and it’s trending modestly up. My hunch is they will write back up MAM stake as a) value thematically is doing well and MAM is a well known value house b) not sure how much the last write back was Edin driven? c) comparators valuations have been doing ok eg Premier Miton is similar size in terms of AUM but much higher cost base and mkt cap £247m. MAM I think us valued by Majedie at 17%/£34m so £200m (20% minority discount) but, as I say, has lower cost base and thus is reflected (I think) in 13% cash yield ie £4.5m/£34m. Personally I’d say MAM might be worth >£300m so would value Majedie stake at >£50m. Look at value ascribed to Lindsell Train in Nicks IT. Anyhow, I’m holding. I think it’s worth more than 237.

[makinbuks] 13/4/2021 08:41

Andy, some thought provoking comments which prompted me to revisit the Sept 2020 accounts to look at the detail around what you say. You are correct that they put the majority of both the management fee and debenture cost through the capital account. However, its very transparent with the two accounts clearly shown side by side. I'm not keen on the term "capitalised" as that implies to me costs which have been moved to the balance sheet to be amortised over future periods. That is not the case here, as on a year by year basis they are simply trying to show the costs relative to either income received or gains/losses made on holdings. Your concern is well founded in that the 2020 dividend of 11.4p was uncovered by 9.1p of earnings. And to compound that worry there was reduction in asset value. However, its worth pointing out that the dividend, maintained at the prior year level costs £6.1m but there is £25.3m in Revenue Reserve even after last years shortfall. In other words there is plenty there to supplement another unchanged dividend this year if the recovery we have seen in the market is not enough. In addition the Capital Reserve stood at £97.5m following last years £22m reduction in assets and we are currently on track to see a very strong rebound inn that number this year. Finally, your point about Aviva is well made, They have sold down from 13% to just under 8% over the last year. But do we know their final intentions? Its two months since their last announced sale

[andycapp1] 10/4/2021 18:24

Been much higher and somewhat lower. Few things weigh. Income from MAM critical as on stake of say £35m it yields £4m (and was £4.6m) ie big cash yield (is MAM undervalued then??). That means rest of the portfolio needs to cover £9.2m of income required (although I suspect part of man fee and debenture costs are capitalised). So ex out £4m from MAM and say £147m of assets need to produce £5.2m or 3% odd yield. Probably ok but better if MAM could revert to £4.6m again. Also UK dividends should be rebuilding? In short it’s messy and bit incestuous and Aviva overhangs too. But underlying NAV looks ok and assuming MAM keeps churning away div looks sustainable. But is heavily MAM dependent! I’m holding.

[makinbuks] 07/4/2021 14:48

The discount is now an astounding 20.2% based on NAV disclosed today at 2.92 and a share price of 2.33.

[spectoacc] 18/3/2021 17:16

Thanks @Makinbuks; must admit I didn't. Discount & yield keep me in MAJE, but I'd be a seller if everythig keeps going up.

[makinbuks] 18/3/2021 17:02

Spec, Did you watch this? hxxps://www.trustintelligence.co.uk/investor/articles/news-events-investor-slides-and-audio-majedie-investments-retail-mar-2021 It was not the most inspiring presentation. I thought the outperformance of the Turtle Fund was the highlight and interesting they referred to it as a hedge fund which sounds better than absolute return. Don't get me wrong I rate James De Upagh highly but he didn't sell it overly well here

[spectoacc] 18/3/2021 16:45

Still in here, but always find MAJE a bit opaque.

[makinbuks] 18/3/2021 16:42

Yes I averaged down a few months back, my logic was take the Jan dividend and sell at 2.43 before the end of March. My price target was based on the thesis that the discount would narrow significantly. In fact although my target is approaching the discount if anything has widened slightly so I'm tempted to stay in for a further 10% or so. The problem as always is there are so many opportunities, its selecting what is best to go for

[andycapp1] 17/3/2021 16:58

I’ve been buying last few months. Edin and Maje largest holdings.

[makinbuks] 17/3/2021 13:00

£2.91 NAV, 18.2% discount. Harsh. My comment of a month ago still applies

[spectoacc] 16/2/2021 19:40

Liquidity, opacity - but agreed :) One of the better left-behind ITs.

[makinbuks] 16/2/2021 18:30

19% discount, MAM's AUM must have grown considerably just through share prices rallying. Solid dividend. Whats not to like?

[makinbuks] 08/1/2021 16:14

Share price at least kept up today but discount still more than 15%. Surprised you don't read more tips on these on that basis

[spectoacc] 08/1/2021 11:57

And another 2.5p.

[spectoacc] 07/1/2021 13:06

"The unaudited net asset value per share at the close of business on 6 January 2021 was as follows: With debentures at par value: 284.56 per share With debentures at fair value: 276.75 per share" +3.5p, not bad when shares unmoved.

[spectoacc] 07/1/2021 09:48

Tortoise Fund seems like every other "low-risk, absolute return" fund - ie cr*p. Oils been a big driver too, hopefully a few of them. Either way, we'll find out soon - 273p yesterday's.

[makinbuks] 07/1/2021 09:45

Well the core UK fund is value focused so finally positioned in the right sort of space. They are usually light financials though which were the driver yesterday. What goes on in the Tortoise fund is anyone's guess and I really hope the managers here sell some of that down for more of the core UK fund

[spectoacc] 07/1/2021 09:41

Wonder if the slow-moving NAV will have moved much after yesterday's FTSE rise.

[makinbuks] 10/12/2020 10:38

This is still a screaming buy by the way for the discount

[makinbuks] 10/12/2020 10:37

Disappointed that the Tortoise Fund lost 3.4% in a year like we've just had. Very poor annual report to just state these numbers in such a dry way without any comment on the logic or thinking behind them. I would like to know how much or the reduction in AUM in MAM was down to market movement and how much to withdrawals. I had hoped that the Edinburgh mandate would have resulted in a net inflow. Finally I'm not convinced by their American market expertise, seem to perennially underperform. NO attempt by our board to rebalance, what exactly do we pay them for? All the expertise is in MAM