Montanaro Uk Smaller Com... Share Discussion Threads

[c3479z1] 06/12/2024 12:17

Chairman puts down further underperformance to the Trust's quality growth bias in the last 4 years at a time when value has outperformed.
Problem is the underperformance stretches back longer
No sign of contrition from the Chairman/Managers, seems we just have to accept their approach even though there must be some value shares that are worth investment especially as they're now trying to fund large quarterly dividends.

[123ct] 08/8/2024 10:32

interesting comment, thank you.

I really do not understand this institutional issue, even if they are not buying the only thing that impacts is the discount.

Wealth managers generally buy open ended funds and not closed funds anyway.

If you have good NAV performance even with a discount most Investor's are happy.

It is when the NAV underperforms that then performance needs to be questioned and strong investment performance leads to discounts narrowing.

If underperformance of NAV exists neither retail or institutional investors are interested.

[c3479z] 08/8/2024 09:59

Board was on the defensive, Charles Montanaro said that the 10 year performance was only 1% behind the competition/index but a shareholder ably topped that by pointing out that this was a cumulative 1% underperformance each year compounding over 10 years. The stark figures are extremely dismal, they said they'd discussed amalgamating with another to create a fund twice the size but that would still not interest the likes of asset allocators such as Brewin or Rathbones.

[123ct] 01/8/2024 07:42

How did the board at the AGM respond to the criticism ?Whilst all UK small companies IT have had the same issues over the past couple of years there are now a number , for example JUGI that have been racing ahead over the past few months by close to 50% based upon my observations

[c3479z] 29/7/2024 20:42

stormy agm last week, several disgruntled shareholders pointing out the very weak performance especially over 10 yr, down with Henderson smaller and Invesco smaller over shorter time periods depending on which you pick
calls for the Chairman to resign, etc, something must happen....
expression that discount unlikely to close due to lack of interest, poor track record and small size of Trust making it of limited appeal to wealth managers, Brewin and Rathbone mentioned,
they say they've a large number of analysts etc.
would have thought the only hope is if performance radically improves then investors will come,
seems to me that outperformance getting more difficult to achieve in an intensely researched uk smaller companies sector, same problem has plagued JPMorgan Euro Discovery where there's a lot of insider dealing now?
otherwise the Trust should be put out of its misery- definite closure of the discount occurs on winding up....

[bmcollins] 04/7/2024 14:46

@Essential
TBH my view is that smaller co's, FTSE 250 etc, are well set to recover after a torrid few years and if you can buy into a decent portfolio at this sort of discount it is too tempting for me to ignore

[essentialinvestor] 04/7/2024 14:21

Out of favour atm, they traded very close to NAV for sometime (post the dividend policy revision).

Are they underperforming the wider sector atm?.
I've not looked in detail of late.

[bmcollins] 04/7/2024 13:48

@Oxman
These are cheap even at 107p the discount is 14%, they are surely still worth buying.
I've added to my holding this morning

[panshanger1] 23/5/2024 07:39

New 52 week high

[its the oxman] 07/5/2024 13:14

Same here, very cheap and the discount remains wide.

[essentialinvestor] 07/5/2024 09:11

Added a few.

[speedsgh] 12/4/2024 08:23

Bascially a reprint of the article published in the Telegraph’s Questor column yesterday...

Don’t ignore Montanaro’s ‘buy’ signal for over-sold UK smaller companies -

‘Every valuation metric is telling you to buy at this level,’ says Montanaro Asset Management's chief executive after lifting its stake in Montanaro UK Smaller Companies to 6%...

[philanderer] 10/4/2024 23:22

The Telegraph

Questor: This ‘standout bargain’ trust has returned 544pc since 1995


Questor says Buy

Ticker: MTU

Share price at close: 101.5p

[sphere25] 24/11/2023 11:02

Some interesting commentary in here:

"It is difficult to overemphasise how challenging the past few years have been for our asset class. The Numis Smaller Companies (excluding investment companies) Index has lagged the broad UK market over the past 1, 3, 5 and 10 years. In other words, the "SmallCap Effect", which has been a major tailwind to investors' returns for the past 70 years, has been working in reverse for the past decade. This is a rare event: the last time this happened was in the late 1990s.

More recently, this underperformance has coincided with outflows from the asset class reaching parity with that witnessed after the Global Financial Crisis. According to the Investment Association, cumulative outflows from UK SmallCap Funds amounted to GBP2.1 billion since January 2022, almost in line with the GBP2.3 billion experienced in 2007-09. Several open-ended UK SmallCap Funds decided to wind up this year while some industry veterans have retired. In the investment trust space, wider discounts have prompted some consolidation.

Valuations for the asset class have returned to levels last seen during the Global Financial Crisis, which marked the start of the recent Great Bull Market. At 13.9x, the 8-year Shiller P/E for UK SmallCap is rapidly heading towards the all-time lows of August 1992 (10.9x), March 2003 (11.6x), February 2009 (11.8x) - which would suggest 15% to 20% maximum downside from current levels. While the past is of course not guaranteed to repeat, history tells us that when valuations have previously reached current levels, returns over the subsequent 5 years for SmallCap were between 100% and 150%. Investors should perhaps take note.

Ironically, amidst all the doom and gloom, Smaller Companies - quality ones in particular - have resurfaced on the radar of trade buyers and private equity fund managers. M&A activity is quietly making a comeback. MUSCIT lost Dechra Pharmaceuticals (at a premium of 47%) to a bid by a consortium of investors before the Summer and Ergomed received a bid (at a 30% premium) in September 2023. Although we never invest in a business in the hope that it will be taken over, we would not be surprised to see more bids in the portfolio over the coming months."


So we have cheap valuations on one hand, but continued under performance of the smaller caps on the other. Ripe takeover activity on another hand, but profit warning's (this week alone: AHT, AXS, EMR, TRI, SFR, KGF, SDY. TTG, TRMR, PEBB, PHC, VCP, TM17) a regular occurrence on the other.

A more optimisic feel of late with some nice oversold/relief type bounces on a further hand, but huge overhang sellers continuing to restrict bounces and any major moves on another. The macro factors stablising (not great of course) now likely allowing the market to focus more on each individual company on a further hand, but flows and sentiment and talk of the death of the UK small cap market on another.

Basically, we need alot of hands to deal with this market.

Roll on the big buyers - sat waiting!

All imo
DYOR

[essentialinvestor] 15/11/2023 12:10

AS mentioned in the above post.. Lovely.

[essentialinvestor] 14/11/2023 17:09

Depends on the market cap at acquisition. They held Dechra for 20 years, from memory.

MTU looks very cheap to me, particularly given the BRSC share price today.

[taylor20] 14/11/2023 16:33

tempting, but GAW and FOUR not what I'd class as 'small caps'.

[essentialinvestor] 14/11/2023 16:14

NAV may be over £1.06 on tomorrow's update.

[essentialinvestor] 06/11/2023 13:03

NAV now at £1.05 and you can buy just under 90 prnce, looks a bargain to me - if wider equity markets stay around current levels.

[essentialinvestor] 02/11/2023 12:17

Tomorrow's NAV, if markets stay around here likely nesr 1.04 pence.

Recent BOD chunky buys, often sells close to NAV, good value?.

[wskill] 03/7/2023 08:26

Joined you today seems a tad too cheap price is somewhat the same share price as in 2015 and a decent mix of companies as well.

[panshanger1] 27/11/2022 13:39

Front page Ad on the Sunday times today worried me !!

[essentialinvestor] 04/10/2022 20:05

May be of interest:

[essentialinvestor] 04/10/2022 12:36

Due a bounce?.

[essentialinvestor] 22/9/2022 18:06

3% plus falls on many of their top holdings today, so this was arguably overdue some downside.