Phaunos Timber Share Discussion Threads

[jonwig] 15/4/2013 16:52

Yes ... reluctantly!

[pugugly] 29/8/2012 09:39

jonwig: Agreed - Significant (imo) writedown of NAV per share - If same continues year by year and expenses and erosion of NAV are still in the same area then if discount remains the same share price will continue to erode.

I am out - may get back in again if more significant erosion of the share price

[jonwig] 29/8/2012 07:19

These results won't set the share price alight.
They also seem to have quietly shelved any revision of the expense structure.
In the last AR (p4) they wrote:

Discussions with the Investment Manager over how to further align the
performance fee calculations with the interests of shareholders are ongoing.

- which hasn't been mentioned this time.

And why add two new directors?
They lost two last year, but I really don't see the need for so many on the board.

[jonwig] 28/8/2012 08:24

H1 results tomorrow.

[jonwig] 26/8/2012 16:27

GTF is their US asset (about 7%), and I suppose that serves the US market.
But I suspect they could sell product into any market, and rising US demand will lift prices generally.

Brazil too, should be a growth area in the next few years, though their economy is wobbling.

I'd really like to see progress on the manager's fees - they said they were in discussions.

[pugugly] 26/8/2012 14:41

jonwig: Good find. I am not sure however from the accounts as to the revenue/profit split in the various markets sold into by the investee companies so cannot guess how much benefit we well get from the changes in the uS housing market.

The accounts are in my view very obscure in this matter and unless one of the analysts has done an in depth analysis (I have not been able to find any data here) maybe anyone who attends the AGM could ask some probing questions into profit breakdown between investment/plantation type and conversion products - eg: Pellets, pulp, sawn lumber and harwood -v- softwood etc..

Declaration:- I started nibbling at the beginning of August.

[jonwig] 26/8/2012 09:56

Yes, I've seen the rise ... with some relief!
Can we put it down to US homebuilding upswing?

In the latest sign that the U.S. home-building industry has finally found its footing, Toll Brothers Inc., the nation's largest builder of luxury homes, reported a 46% increase in quarterly earnings and posted a double-digit gain in revenue.

Toll's results follow strong earnings from other home builders and increasing confidence in the market for newly built homes. Across the sector, companies such as PulteGroup Inc., D.R. Horton Inc. and Meritage Homes Corp. have reported earnings jumps, and last week, the National Association of Home Builders said builder confidence had risen to its highest level since February 2007.

"It feels good to be making money again," said Martin Connor, Toll's chief financial officer, in a conference call with analysts Wednesday.



Confidence among U.S. homebuilders climbed in August to the highest level in more than five years, affirming the improvement in residential construction.

The National Association of Home Builders/Wells Fargo builder confidence index rose to 37, higher than projected and the best showing since February 2007, according to figures from the Washington-based group released today. The median forecast in a Bloomberg survey of economists called for no change from July's 35. Readings below 50 mean more respondents said conditions were poor.

[pugugly] 26/8/2012 09:28

Looks as though seller may have paused up just under 20% from low.

Results should indicate if this is just a dead cat bounce or the start of a significant narrowing of discount to "advised" nav.

[bisiboy] 16/7/2012 16:47

picked up some more today
seller is still around i think

[jonwig] 12/7/2012 10:21

Small sale at c.39% above valuation:



The main point is that stated asset values seem to be robust, making the current discount even more astonishing.

[clocktower] 09/7/2012 14:19

Could be a good recovery play for a longer term investor it seems. DYOR.

[jonwig] 25/6/2012 14:25

So L&G bought up the big tranche, 32,250,000 (6%) and the share price has come off the floor ... we hope!

[bolador] 20/6/2012 18:48

Another block of stock sold today but a willing buyer seems to be around now.
It is quite amazing but when an institutional seller wants out of a small cap sometimes they just drive the stock down regardless. At least they got a big lump away in one go as jonwig posted today. When working in the stock market I saw this kind of action several times. Once on finding out who a very large seller of a small cap was we rang them up and made a bid at market on behalf of a client for all their remaining stock in the then little company whose shares they were trying to unload.But no, they did not want to sell all at once in case it turned out to be a noticeably bad bargain for them we supposed. They continued dribbling out stock and the shares fell thus knocking the share price from about 17p to 8p in a generally bad market. Over the following years the share price rose to todays price of around 265p. Any guesses ?

[jonwig] 20/6/2012 09:09

Some big trades going through and the price edging up.

Yesterday a negotiated trade of 16,232,911 just below the bid. That's over 3% so should be an RNS.

[bolador] 15/6/2012 08:35

jonwig, thanks for your note. I saw a trade go through this week for 950000, perhaps that stock has been overhanging the market for some time.

[bolador] 15/6/2012 08:32

If thats what the directors believe how about them buying some shares ? I am glad this is not a unit trust, imagine selling timberland into an unwilling market.

[jonwig] 15/6/2012 07:10

Well, they have an announcement this morning:

In response to the recent share price performance of the Phaunos Timber Fund the Directors wish to make the following comment:

"The Phaunos Timber Fund remains fully invested in high quality timberland assets. The assets have been independently valued. The directors believe that the prospects for the company in the short, medium and long term remain strong and are confident that progress is being made on all important issues."

I hope they count the Four Winds management fee as important!

[mangal] 12/6/2012 14:43

This was supposed to a "safe" long term investment but has proved to be a disaster- down almost 40% over 4 years; have thought of selling out but the discount has stopped me from doing so. Surely, must come good eventually. Dec 2016? that's a long wait.

[jonwig] 12/6/2012 14:03

Bolador - I suspect they've been trying to strongarm Four Winds to reduce their management fee, and failed.

"Under the terms of the Investment Management Agreement, FourWinds
Capital Management will continue as the Investment Manager unless the
agreement is terminated by either party giving to the other not less than
36 months' notice. Such notice cannot be given earlier than the seventh
anniversary of the initial admission of the Ordinary Shares to AIM, that
being 20 December 2013."

So it looks like they are stuck until Dec 2016, unless FW does something really bad, when they could be sacked.
I don't think share price performance would be enough to get rid, though asset performance might.
(53% discount to latest NAV now.)

[bolador] 12/6/2012 13:56

Well this is a real horror. There seems to be no support at all and yet no bad news has been announced beyond a small fall in nav. Any ideas ?

[jonwig] 19/4/2012 08:16

Well, the results for the year are pretty stable, and I believe them when they talk about long-term promise.

No performance fee this year - and I should think not!
But the ongoing expenses are huge ($15m for the timber, $11m for the investment managers) amounting to more than half the fall in NAV.

Assuming the NAV is still around $1.04 per share, the discount is 40%. I suspect that will only narrow when the assets themselves start to appreciate - so a double whammy for the share price.