North Atlantic Smaller C... Share Discussion Threads

[rambutan2] 21/2/2022 21:31

topvest, the esteemed Peter Spiller of CGT, who is certainly not a fan of high fees, has held NAS for decades. He says it's a way of accessing private equity and associated skills on the cheap...

[rambutan2] 21/2/2022 21:23

So, nav down approx 5% in Jan:

The Board announces that as at 31 January 2022 the unaudited net asset value per share (excluding current period revenue) under the equity accounting method was 5,846.96p.

The unaudited net asset value per share quoted above differs from that required under IFRS 10, which was adopted by the Company from 1 February 2014 as detailed in its Half Yearly Financial Report for the six months ended 31 July 2014. The unaudited net asset value per share (excluding current period revenue) under IFRS 10 was 5,769.79p.

[topvest] 21/2/2022 18:28

You have to pay for Christopher Mills, but his long-term record has shown that he is well worth the money.

[loglorry1] 19/2/2022 20:26

Holding Oryx means Mills gets to double dip on fees.

[ali47fish] 19/2/2022 17:01

anybody cares to comment whether this is good entry point- big discount but good historical performance. I am intrigued where does it invest apart form the uk;

[m_kerr] 14/2/2022 20:04

anyone know why they hold oryx growth fund which mirrors many of their holdings? it's quite rare to get a trust with this sort of record trading at such a discount.

[loglorry1] 01/2/2022 10:42

Given the drop in UK small caps almost across the board the NAV will have to have dropped a bit. Renalytx is down to 464 from a high of around 1200 for example.

[chillpill] 01/2/2022 08:38

Not sure what the current NAV is but have been accumulating a few more for the bottom drawer.

[spectoacc] 26/1/2022 15:52

Thanks @Spartacus. A few buy-backs to factor in too, but likely within the margin of error.

Perhaps coincidentally, HL has the 12 month average discount at 25.99%.

[spartacus mills] 26/1/2022 15:50

I make the running NAV today to be about £58 down 6% from the Dec 31st number. Implying a discount of c.25% to today's SP

Big Mills portfolio losers in the recent sell off have been the big growth holdings such as Polar, EKF, Renalytix and Oyrx.

Surprisingly good performances from Hargreaves, MJ Gleeson, Odyssean, Circassia and SureServe

My rudimentary model gets a bit less certain at this time of the year because we don’t have much recent details of the holdings below the top 10 – for which we are awaiting the end of year report to Jan 31st which normally surfaces in May.

I would hope that Mills has been in the market over the last couple of days. There is £100m+ cash available so plenty of firepower and perhaps some bargains to be found.

At a 25% discount NAS continues to be outstanding value.

[spectoacc] 26/1/2022 14:13

Wonder what the current NAV is - considering the number of listed holdings, a daily NAV wouldn't go amiss IMO.

Looking for an excuse to buy back in.

[apple53] 30/12/2021 00:20

Pink - you seem to be implying buybacks are already limited (or maybe I misunderstood). Based on the latest waiver, there is still room to repurchase over 1m shares. There continue to be votes against the waiver, but they have been a minority. The team has been working hard for ages (see my posts above) to try to get the naysayers to see sense.
We need to make sure we vote....

[apple53] 30/12/2021 00:10

first sorry for the duplicate post everyone
loglorry - quite a few different points over the 2 posts. Though the latter one was primarily to update on the NAV, and ask if Spartacus has an uptodate guesstimate.
Yes the FTSE small cap fell almost as much in November. And ex Renalytix NAS outperformed.

At first sight it's quite hard to square Mills' immense bullishness on a lot of his holdings with his cautious view and holding lots of cash. However, I think I can broadly defend a consistency - most of the names he mentioned on the recent call are small or very small and there is a limit to how much cash NAS can be deploy in them. If asked, he would probably say it is harder to find value among the mid-cap names that would tend to be larger holdings. And of course he is making a general remark about the UK market (and beyond) as a whole.

[p1nkfish] 27/12/2021 11:27

Posted the below on Fulcrum pbb. Harwood not covered themselves in glory on that one so far.

"Just some thoughts.

A) obviously an attempt at buy and build in MAP and any buy and build is always risky.

B) debt risk as they mention increasing it, *optimised", or something along those lines. See C).

C) might optimised debt on cash generative assets be via a CLN (convertible loan notes) and big holders might love that. Revolving credit facility via bank, investment debt via CLN arrangement, "optimised". Optimised for whom? Debt holders get preferential treatment on any liquidation risk. Bayford & Harwood offering debt would give them income, some protection and equity upside over time - could take quite a while? Very optimised especially as rates are so low currently and there is cash waiting to be allocated. Tax on profit due to rise to 25% April 2023 onwards. Debt offered by large equity owners squares more than one circle. "optimised".

D) for now share price appreciation might not be the main target of the large holders - interest income via offering debt might be. Think about that, especially if pis are locked out of offering debt. I don't think Bayford & Harwood are necessarily playing the same game with the same goal as ordinary pis. They have incentives that could be outside of near time equity value increases via share price.

E) The other point is what about post, about, January 12th. The new shares hit the market and any upside will be limited as pis look to take some cash out on any increase.

F) In fact upside might be limited until both the acquisitions are clarified (uncertainty) and the debt level and type made clear. Both are big unknowns.

Just thoughts, dyor etc. Imho.

Convertible loan notes make sense for the large holders and Harwood are clever.
Whatever happens, debt is due to increase according to the rns release and I don't see why the bank should benefit."

[p1nkfish] 27/12/2021 09:55

Would rather ride it out here than take a chance of exiting and not getting back in lower or even the same price. This has become a keeper for me having held quite a while. £40 -£50 is probably the range barring ability to increase buybacks or some other interesting event in the portfolio.

[p1nkfish] 27/12/2021 09:50

Posts 272,3,4 from August is point we have arrived at and mentioned in the last set of results. Buyback limitations will hinder supporting the share price

Mills chance to allocate more capital will come and might be as a result of US tightening feeding through into a period of greater volatility and weakness.

[loglorry1] 27/12/2021 08:55

A 4% drop on NAV is probably a big out performance against the small/mid cap index. It will be lower for the end of December too. I'm not sure what your point is? Mills thinks stock prices have run up too much which is why he holds a lot of cash and has been buying back stock.

As far as I can tell he is performing well in a soft market.

[apple53] 27/12/2021 08:43

Just realised my post just after NAS announced the NAV didn't stick:
QUOTE: Renalytix a bit of a shock I guess; makes the massive buyback look unfortunately timed. End Nov NAV down almost 4% to £61.1 (despite buyback impact). Not losing faith, but not really looking to add. A whole bunch of trusts with c. 30% upside to realtime NAV, though I am always interested to hear Spartacus' latest estimate, and whether there is any offset to the continued drop in renalytix.

[apple53] 24/12/2021 22:06

Interesting comments.
I was very close to top-slicing a large position, then the buybacks restarted. Really bad luck that renalytix' price collapsed, and the discount has barely moved despite the falling NAS price, so neither buying nor selling at present.

Strath- any idea how big frcm and eskn were? Surely nothing to rival renx? (I have been tempted to buy it separately so would have loved some commentary. Up 14% in 5 days....)

I think it is great he does these interviews. His portfolio knowledge gives me great confidence. I am more convinced that he will perform than classic small-mid cap managers chasing games workshop after it went up 10 fold. I could buy one or two directly. He enjoys it but it is indeed a bit altruistic. It might move the price of some of the stocks, especially if it builds a bigger following.

He has been in this game a long time so his relative certainty about EBITDA multiples surprises me (eg on a restaurant business). Such multiples are not set in stone- big pharma used to trade on 20x PEs and that pretty much halved in a decade. Mediterranean retail banks for 15x and that went to 10 even before the financial crisis, etc. Nonetheless I think there is enough upside in most cases even if you cut the multiple targets by 2 points.

I also note his confidence that several of the names will be taken private. This is the flip side of my caution that too much PE money is chasing too few targets. Also that he stripped out the cost of being listed for at least one name to get an underlying profitability.

[loglorry1] 24/12/2021 18:49

He does it to a) ramp his one book b) keep investors invested c) attract new buyers to support the price.

I'm relaxed that he knows wbat he is doing in this space amd has had very good multiyear returns. Also loads of his own skin in the game.

Liked his caution. We've had a good run, US markets high on most metrics like CAPE, taxes both corp and personal increasing and obviously rates and inflation presure. If anything I find him a bit too bullish but he has to be I suppose.

[p1nkfish] 24/12/2021 11:50

It might be altruistic to give small fry some info, background and tips as Mills has made his bundle already and most people like to be invited to expound on what they are good at so he gets that opportunity too.

I enjoy listening to the thinking process. Interviewer could do better by calming down and not shouting.

Wider share ownership can help instil a more entrepreneurial thinking in folk too and I think Mills is very pro that sort of thing.

Buying will feed through to Oryx, NAS, Harwood and help close portfolio valuation gaps quicker than waiting for fundamentals to do it.

Glad to hear Mills speak.

[strathroyal] 24/12/2021 10:42

I'm not so sure CM found 2021 quite as easy as some suggest. Yes, the likes of AUG and ASTO did extraordinarily well but on the otherhand FCRM and ESKN have been dreadful investments and the podcast quite noticeably didn't give FCRM a mention.

I've been interested in NAS for a number of years but I can't say that I understand why he puts out these podcasts with what appears to be a sycophantic host.

[p1nkfish] 24/12/2021 09:48

NAS returning cash via buyback would be one option but that's limited by the outcome of the last vote from what I can see - look at RNS from yesterday.

[p1nkfish] 24/12/2021 09:47

I totally agree China but external shocks can hit and lead to sell-offs.
The child tax credit end in US along with their tightening will be "interestng".
I can't see any decent sell-off in the US not washing up on UK shores.

I hold NAS and no intention of selling, it's a good basket. Not so sure about individual shares though looking at the run up that has occurred. A bit of a shake would be no surprise.