Newriver Reit Share Discussion Threads

[hpcg] 12/7/2019 10:49

I have short positions on almost all the time; shorting is the only mechanism that counters capital mis-allocation and criminal acts. I completely understand the short thesis here. However the primary driver of lower prices, and thus the short thesis, is Woodford's forced selling, and by proxy the new SJP manager optional selling. These technical processes are coming to an end. The shorts have been correct to this point. However now the share price has baked in a substantial discount NAV and the rent roll. A discount is completely justified, but the greater the discount the more of a mark down is baked in and the more the balance of probability that the discount is excessive. This is especially the case here where the company could withstand near enough a halving of the rent income. If you think that is a scenario then I have a much better short for you, ASC, which by that point would be running up significant losses as it would be unable to compete on price with bricks and mortar.

N.B. I don't think this pops much when the Woodford supply is exhausted, 185-190p maybe. In the long term a minimum 8% distribution is sustainable and that will provide a more than comfortable return. The short term excess return is just gravy.

[chucko1] 12/7/2019 00:47

20pps is 94% EPRA div cover. What’s more, they see 100% cover in FY2020 as a result of the newly announced JV with PIMCO and earnings from platform fees.

Perhaps people should stop worrying about Mr. Market (as you say) and worry more about whether or not NRR can achieve the targets they outlined in their presentation of May 23rd. Sometimes I get the impression certain posters here have not got that far.

One or two seem inclined to do neither as they believe the answer lies in the pages of the “i” newspaper, or The Guardian. Such sophistication.

[m_kerr] 11/7/2019 23:38

plenty on here take instruction from Mr Market. if the share price was at 250p, and all else the same, they'd be much more upbeat. remember, it's down recently because of woodford selling pressure.

i see much more upside potential than downside risk of loss, at this level. company indicated that once the recent acquisitions and HL synergies are taken into account, FFO will be 20p per share. assuming no growth at all, and a 12% discount rate, this gives a DCF value of 168p per share.

[ramellous] 11/7/2019 18:59

Wetherspoons seem to sell beer sub 2 quid a pint.. Food is where it’s at. I’m off to a pub tonight for quiz night. 3.50 a pint and free pizza. It will be full. On the way to that pub I will go past another one that was taken over by the Co op a couple of yrs ago.

[propinv] 11/7/2019 18:43

Asmodeus. Agree with that, but we aren't the future. Dynamics against pub trade. Doesn't mean doom, but going to have to spend money to reinvent

[rcturner2] 11/7/2019 18:00

Pubs are closing at the rate of 10 a day. No pub can survive on the weekend trade, the sector has been taxed to oblivion. £4 a pint or £1.20 in the supermarket?

[chucko1] 11/7/2019 17:06

Some of it bought by Barnett according to the 16.37 RNS. If he liked it at 249p ...

[spectoacc] 11/7/2019 16:18

@popinv - have a look further down the RNS:

Name(xv) % of voting rights % of voting rights Total of both
if it equals or through financial if it equals or
is higher than the instruments if it is higher than
notifiable threshold equals or is higher the notifiable
than the notifiable threshold
threshold
------------------------ --------------------- -----------------
Woodford Investment
Management Ltd 0.00 0.00 0.00
------------------------ --------------------- -----------------

[ramellous] 11/7/2019 15:05

That doesn’t mean they aren’t going to pubs to eat out though. And 2.40 in my local for a half of Diet Coke means soft drinks probably have a far higher profit margin..

[asmodeus] 11/7/2019 14:51

PropInv - although many under 25 are not drinking, those of us over that age are drinking to excess - and have more time to lurk in Pubs - not me, of course.....

[propinv] 11/7/2019 14:24

Specto, it doesn't say sold the lot. It says below 5%

[spectoacc] 11/7/2019 14:02

STOB's chart might be a good example of what to expect from NRR - very little, for a while. Hard to tell if NRR has gone to strong hands or not.

Mind you - wouldn't touch STOB :)

[cc2014] 11/7/2019 13:59

Woodford below 5%. Expect a slow sustained rise now. Shorters will be probbably looking to exit if they haven't already against Woodford's sells.


Another terrible trade for Woodford!

[spectoacc] 11/7/2019 13:46

I'd imagine the fund management industry, insofar as represented by Unit Trusts, is delighted by Woody's demise. He set levels of disclosure and fees that put many to shame, whilst attracting multi billions in flows.

Sadly, he couldn't stock pick if you paid him, and his implosion has been so spectacular that it threatens to (deservedly) tarnish the whole industry.

STOB Holdings RNS just out from Woody, from c.15% to under 5% - might mean the NRR one is due soon.

[Edit - forget that, STOB trades were from 2nd July, STOB notified on 3rd July, only just put the RNS out. c.115p when bid was 125p, but a lot to get away].

Edit again! - the NRR one is out! So long Neil Woodford - he's sold the lot. Onwards & upwards. Could still be a small overhang from mandate transferees, or a massive one from Barnett, but bye bye Woody.

[jbfnfn] 11/7/2019 13:39

Thanks for that SpectoAcc

Another thing that has struck me about the Woodford situation is there appears to be no sense of collective responsibility among the fund management industry. It seems every day in the Daily Mail business section and other papers is another little article of bad news about Woodford. When it kicked of I thought it would be in the interest of the fund management industry to get it sorted out as quickly as possible. That would have involved other funds picking up Woodford's more liquid holdings quickly, but it's dragged out for ages. The situation is terrible for the fund management industry but none them cares.

[spectoacc] 11/7/2019 13:22

@jbfnfn - trackers often stock-lend as a way of raising cash and reducing fees, is why we have the Vanguards etc at sub-10 pips cost. Some are ignorant enough to exclude trackers that stock-lend on misplaced moral grounds, but the main risk is counterparty risk - if eg Crispin Odious went under, how would you get the stock back? SImilar happened 10 years ago during the Icelandic banking crisis to some of the longs, eg those lovely Tchenguiz brothers & a very large stake in SBRY, if memory serves.

[salchow] 11/7/2019 13:14

Minerve 2 - if you don't gamble you shouldn't buy shares. There is always a risk. I advised many businesses during my working career and the best laid plans of the most honest directors can go awry, sometimes through no fault of their own.

[jbfnfn] 11/7/2019 13:11

Somebody has to loan out the 7% of the shares that are shorted here. Who is loaning them out? Could Barnett at Invesco be loaning them out? How much is made loaning the shares out? Is there some disclosure for who is loaning out the shares?

[propinv] 11/7/2019 12:14

REDCHEF - 25% of people 18-25 are not drinking

[minerve 2] 11/7/2019 12:00

Perhaps

We shall run like smoke n' oakum.

Is more applicable.

[eeza] 11/7/2019 11:57

Nothing quite like splicin' the mainbrace with harry gulpers grog especially when it's neaters..

[lord gnome] 11/7/2019 11:45

Shiver me timbers, splice the mainbrace, avast behind - bloody enormous.Will that do?With apologies to Angus Prune and IASIRTA. It's an age thing.

[minerve 2] 11/7/2019 11:26

I don't gamble.

Shorting increases cost of capital.

[asmodeus] 11/7/2019 11:19

The majority are usually wrong. Most people believe that.....

[salchow] 11/7/2019 10:54

I don't normally short although with the political situation perhaps I should. When I buy I am not thinking that I am contributing to creating jobs. I am looking to make money. When someone shorts it is simply the reverse. You cannot make a bad company good by buying their shares. You cannot make a good company bad by shorting their shares. If it is wrong to gamble on shares that you think will fall it must be wrong to gamble on shares that you think will rise thus pushing the share price too high. I say gamble because frankly what we are doing is no more than sophisticated gambling!

The shorter's sometimes get it wrong. Look at Ocado as an example. From experience I have always thought Ocado had a great offering irrespective of their accounts and my view prevailed to the cost of the shorter's. Nevertheless, the shorter's are right often enough and the level of shorts is one of the things I look at when buying a share. Incidentally on NRR they are far higher than the figures that have been quoted as those figures tend to only include individual shorts of more than 0.5%.