New Star Investment Share Discussion Threads

[luckymouse] 12/8/2016 10:00

Nice chart here (recently) - They have to do buybacks or crystallise & return a profitable investment if you want the nav gap to sharply close - either that or become a pension sipp favorite by putting in a steady LT climb
Management need to be a little more aggressive in both depts perhaps

[spectoacc] 11/8/2016 14:33

NSI hardly alone in this, but it's still within 1% of 12 month average discount - ie the rise is justified by the NAV increase (with no doubt a chunk of that due to £ weakenss).

[spectoacc] 09/8/2016 05:55

Agreed @coolen, though "something" will change eventually..

[coolen] 08/8/2016 21:24

Plenty of reasons for a large discount, with no sign that anything is to change.

I suspect it is a shrewd IHT ploy: given the share quote, how can HMRC dispute that 120p per share of wealth is worth anything more than 85p ?

[spectoacc] 08/8/2016 10:35

"..Pretty accurate & liquid NAV" is a good description, even if the "liquid" part doesn't apply to us shareholders! But it's certainly an unusual discount play in the genuine/realisable nature of the NAV (eg vs smallcap ITs, where valuations are done on bid, but trying to sell their holdings in any size can be impossible).

[jhan66] 08/8/2016 09:00

6% increase in NAV. Happy enough with that, makes for 35.5% discount which should hopefully reduce a little this month.
I prefer to view it the other way around, we need a 55% share price increase just to catch up with a pretty accurate & liquid NAV.

[spectoacc] 03/8/2016 15:17

Well done @tilts, "always leave some on the table for the next guy" (in this case hopefully me ;))

[tiltonboy] 03/8/2016 12:56

coolen,

Those sales were mine, and finished me off...just got bored, but made a decent profit!

[jhan66] 03/8/2016 12:13

Looks like another nav increase is expected in the next day or two

[spectoacc] 25/7/2016 08:47

Apropos of nothing, attempted a few NSI RSP quotes this morning - no size of note available. Within 30 seconds of the last attempt, the bid moves up 2p. Coincidence? Probably. But nice to see it's a tight market for NSI.

[spectoacc] 06/7/2016 14:50

@jhan66 - so's money in the bank, & about the same returns as NSI ;)

[jhan66] 06/7/2016 14:35

Good increase in nav.
Not a surprise with Fundsmith currently £2.824 with 60% dollar weighting or thereabouts.
I'm quite critical of NSI management but at least it's safe from the ftse250 rout.

[spectoacc] 02/7/2016 15:16

Wonder what next NAV will come out at - some Euro & gold in there but might only be counterbalanced by UK losers.

[edwardt] 27/5/2016 08:07

anyone know where the high water mark is for performance fee? loving the debate - think someone needs to point out to the big man that unneeded income that is gifted does not constitute a pet- ergo raise the dividend here!

[spectoacc] 17/5/2016 06:27

Lol @topvest - perhaps trying to do us a favour by not doing well enough to charge the performance fee?

Looks like I'm in profit, though don't think I'll test sell size..

[topvest] 16/5/2016 19:33

Yes, and they struggle to even achieve that derisory return.

[rooky4] 16/5/2016 18:35

Performance fee is 15% of growth in net assets over a hurdle of 3-month sterling LIBOR plus 1% p.a.

This has acted, and still acts, as a continual drag on returns while being a nice earner for Brompton. Setting a performance fee against 3 month Libor in the current extreme low interest rate environment just shows contempt for the non-Brompton holders and no wonder the discount stays high.

[spectoacc] 26/4/2016 15:29

Picked some up, despite agreeing with both bears & bulls. I'm a sucker for NAV discounts but I agree there's no catalyst, the company's comments re the discount are scandalous, the performance is poor, & the shares uselessly illiquid. But "one day" it'll amount to something and it's a bet on it being sooner rather than later (gone into the SIPP and not retiring anytime soon).

Joins several similar punts like NCE (which I won't ramp except to say it's available nearer 11p than the 10/12.5p spread would suggest, and manages to make NSI's performance look stellar).

[topvest] 11/4/2016 19:27

Think you will live to regret building a big stake in this. Alliance Trust is far better. This an orphan fund. Rubbish performance, no dividend, no interest and a controlled company. I'm sure we will get a £1 back, but when? Could be years off!

[coolen] 11/4/2016 10:39

Am I correct in thinking that new rules are coming into force requiring substantially more disclosure, including geographical and offshore trust beneficiaries, from anyone known to be a major shareholder in an investment trust?

May not help the share price, but might give an insight into this guy's thinking.

[rndm355] 11/4/2016 09:41

27% over 20 years is 1.2% compounded annually. Better than nothing, but we are talking about a horribly illiquid share here where minority owners have no power at all. I don't know if the discount fully compensates for that.

The underlying investments are not bad anymore as you suggest, Fundsmith is the second largest and that could do well if it sticks around in its current form for the long term. Apart from that there are a bunch of run of the mill funds. Lots of layers of fees to keep the City in business.

If you don't care about illiquidity and can hold forever then it is not a bad proposition but you might be holding for a very long time and while I do think you have a good chance of beating a FTSE tracker with that >1.2% tailwind, it's not guaranteed. Fundsmith has had a great run already and are the rest of them very likely to do so going forward?

[buttanc] 11/4/2016 09:14

Have bought another 25k at 73.11p, had to sell some ATST to fund them.

In response to the previous posts, and further explaining my reasons for investing:

Looking at a pessimistic scenario that it takes 20 years to close the discount, the admin expenses of NSI (circa 1% annually) would reduce NAV by 18%. You would then have have a NAV of 97p or 33% above your purchase price of 73p today. Apply a 5% discount for the cost of liquidation and you come out with a 27% gain purely related to the discount.

On top of this, your NAV gains are leveraged. So each year, your percent return will be increased by the discount (so in year one the discount is 63%, and if the underlying NAV rises 5%, that is a gain of 5.9p on your 73p or 8.1% NAV return).

You can play around with the assumptions, but even well beyond 20 years you make a handsome increase on the underlying return on the investments when the discount closes, and you benefit from free leverage throughout.

If you can hold indefinitely, the only foreseeable reason this will let you down is if the underlying investments perform significantly worse than alternative investments. This may happen, but I'm happy with their current investment mix.

Another investment of mine has some similar issues. SVM, is similar in having a poor past record and a large discount, but with revamped investments that are both quoted and liquid. It has an extra disadvantage of being very small, but is investing in smaller UK companies which I like as a sector. Again there is potential for the unwinding of the discount and in the meantime your NAV returns are leveraged.

Our differing views of the NSI investment case are really about whether to look at share price or NAV. For my long time horizon, NAV seems the better measure for my circumstances.

[rndm355] 10/4/2016 00:36

It would be more profitable to buy Mr D's life insurance policy (or someone of the same age and health.) Cos that's basically what you're speculating on here. The underlying investments aren't as bad as they were before but then the fees for Brompton make it an expensive funds of funds. I wouldn't consider it cheap unless it had a 50% discount to NAV.

[topvest] 09/4/2016 19:32

Yes, agreed if liquidated in a year. If its in 10 years then that 50% return doesn't look great. I bought mine for 64p in 2009. Dreadful return.