Sdcl Energy Efficiency I... Share Discussion Threads

[2wild] 03/12/2024 12:11

Market seems to have priced in something horrendous during last several weeks. Hopefully not insider trading. Could get a decent relief rally tomorrow. Medium to long-term interest rate seems to have turned. UK 5 Year government bonds now down to 4.07%, having nudged 4.5% following the budget.

[jitters3] 03/12/2024 11:44

Half Year results out tomorrow I believe

[cc2014] 03/12/2024 10:53

Historically they haven't been in a hurry to sell but that has changed now.

It took them from 20-09-23 to 27-10-24 to sell down from 13.01% to 11.99%

but only from 27-10-24 to 29-11-24 to sell down to 10.84%

[kinbasket] 03/12/2024 10:11

What makes you think they plan to sell it all ? They might be finished adjusting at 11%.

[cwa1] 02/12/2024 17:13

Stake reduction by Rathbones

[return_of_the_apeman] 29/11/2024 17:02

Looks like the bottom could be in here now, so oversold
I know most are in for the long haul but a bounce back to 58p perhaps

Fingers crossed

[chucko1] 29/11/2024 14:00

What's more, the number of stocks he (Oak Bloke) has written "in depth" articles about is simply too many to actually research "in depth". Nevertheless, he points to some of the key determinants in each case, which is useful for those of us who cannot possibly do deep research into all the stocks that are on our radar screens.

I probably analyse very deeply only about 3 or 4 stocks each year. And part of that is not fundamental, but mathematical/statistical, and what other holders are being forced, sometimes, to do. In markets which have been significantly affected by observable interest rate moves, relative valuation has been more useful to my P&L than knowing about some laundrette in Cleethorpes that's been on the market for 6 months. I'll let management of the relevant IT worry about that. However, if it's an IT in liquidation, and is one of, say, 6 remaining sites, then that's a different story.

SEIT getting to the point where I need to analyse it more to justify a large position based on the now huge yield. I do not yet have a large position, but it's been growing every day for the past week or two. At 800bps over 10yr Gilts, it has less pure interest rate risk than the quality REITs such as BBOX and SREI at al. And at the current valuation, this may make it overall a far better risk/reward than those.

[cc2014] 29/11/2024 13:42

GSF...

As I've said a million times if these guru's were any good their time would better spent maximising their returns not writing articles.

I'm sure it's not the first time he's tipped SEIT so eventually he will be right.

[williamcooper104] 29/11/2024 13:42

RESI - I bought it recently and he wasn't wrong that it looks like a decent long - but it's not a multi bagger with loads of hidden reversion

[solarno lopez] 29/11/2024 13:36

And VSL……

Anymore for anymore

[williamcooper104] 29/11/2024 13:30

Noooo If only I'd cut my losses when he went super bullish on DGI9

[solarno lopez] 29/11/2024 13:00

Coupled with the Kiss of Death ( Oak Bloke ) has written them up

[kernelthread] 29/11/2024 12:40

That's the thing - they started up when it cost very little to borrow. The question is how well does their business model work with higher interest rates? They can't get access to any more equity funding because of the huge discount to NAV, and borrowing is now much more expensive.

[spectoacc] 29/11/2024 11:52

Good point. Most of these ITs are ZIRP-era.

[cousinit] 29/11/2024 11:30

I kind of also suspect that there will be some central asset allocation models at wealth managers which will have increased 'target' bond weightings since yields increased in 2022, so has actually forced some selling of alternative income trust positions that were built up in the ZIRP era to deliver yield when bonds didn't.

[spectoacc] 29/11/2024 11:27

Retail money has left the UK market for 37 straight months I believe - there'd never previously been two consecutive years of withdrawals, even during the GFC.

Some of that is surely cost-of-living, some probably the ageing population (from net savers to net spenders). Some has got to be tax (1948 highs for govnt share of economy), some due to what rents, house prices, and interest rate rises have done (keep funding your pension or meet mortgage payments?).

A decent part must be the Mag7 & S&P, that crazy bubble where to match the market, you've got to have 60% in the US. Nvidia is supposedly worth $3.5 trillion.

Bottom line - net fund withdrawals = selling down proportionately as they know they mustn't do a Woodford and sell only the liquid holdings. So the small ITs get sold, and the lower they go, the more they fall through market cap limits that force others to divest.

But it's overall very positive for us, for picking up bargains. Assuming, that is, you avoid the DGI9's etc.

And for long-term holders it's clearly bad, because all these co's are now starved for capital & unable to grow. And if they do wind up, it won't be for what the original buyers paid at float.

[wshak] 29/11/2024 11:12

Lousy performance by their funds causes investors to question them and ask for their money back - redemptions.This means the Fund Manager has to sell portions of their portfolios to give cash to satisfy redemption demands.

[mwj1959] 29/11/2024 09:56

Liquidity / Discount risk is a major concern for many of the institutional holders of these assets, such as Discretionary Managers. None envisaged (naively in my opinion) the level of discounts that some of these alternatives trusts have gone out to in recent years. Clearly 10yr Gilts rising from 0% to 4-5% have had a lot to do with that, but underlying performance hasn't helped either. In some of the smaller trusts if investors are given the opportunity of a wind-up somewhere around NAV in a vehicle with limited liquidity, illiquid assets and a large (and volatile) discount they are not surprisingly going for the latter. That trend is going to continue. Other than Gilt yields falling materially (unlikely) and/or massive buybacks (not been effective so far) there is little to drive sustained discount narrowing. Frustrating for LT holders, but a clear yield opportunity currently for the patient buy and hold income investor, albeit still with plenty of discount and NAV risk i.e. share prices can still go lower. Investing is about the balance between risk and reward and for many of these trusts it is probably tilted to far towards the former.
I don't own SEIT currently, but do own plenty of others in this space.

[121spa] 28/11/2024 21:03

Why are so many funds getting out?

[williamcooper104] 28/11/2024 14:23

The discount rate used to value the assets is 9.4% - take of just over 1% for management costs and then adjust for the discount to NAV and you get a market implied return of 15.15% - so on that basis the divi is covered Of course there will be assumptions about asset performance/inflation and such like which would upset the value FGEN and NESF have similar implied discount rates of 15-16% DORE has the tightest of the ones I follow at 12.9% ROOF was taken out at a 10.5% implied rate

[hindsight] 28/11/2024 14:10

Yes one would hope at least one of their 600 employees has made a visit

[panshanger1] 28/11/2024 13:45

The General Atlantic buying has given me some comfort but l only view this as a hold atm

[erstwhile2] 28/11/2024 13:27

Want to pull trigger but it has echoes of DGI9 about it, raised in late low interest rate period, overpaid for ESG stuff, valuations look like massive EBITDA multiples. But owner of the manager has been a buyer last time at these levels. No good financials for wholly owned subs to form a view. Tough one

[stangunner] 28/11/2024 12:50

Does anyone have a view on the economic life of the assets here? 12.5% div yield is tempting, but if these are 15 year contracts, a lot of that is just repaying capital.

[pavey ark] 28/11/2024 10:57

Well two years ago I bought in three lots at 95p average and thought I was really smart......this year I doubled up at 61p (two lots) at 61p average......again going with the "smart" theme.

Even though the price /discount/yield now looks very strange (inviting!!??)I have decided not to be smart.

With dividends reinvested my spreadsheet is showing a 8.9% yield (8.1% on purchase prices) and as this is in my income portfolio I am content to simply let it be.

Trump said anything that would get him elected and out of prison......greatly aided by Biden and the left of the Democratic Party......huff puff chaos for two years then mid-terms.

I don't think there are specific concerns for SEIT......not to say that there aren't dangers for the wider economy.