The development platform is the much smaller part of Onyx than the actual projects, 4% of GAV vs 17% for operational projects. The platform is the one part portfolio that benefits from the Inflation Reduction Act. Thankfully rooftop solar and local battery storage are just about the easiest renewable projects to justify economically. This is especially the case in the US where grids and local distribution are so flakey.
Recession and customer closure are conventional and pertinent risks but all the push from the current administration is for onshoring. Not only should that increase demand for industrial facilities, but it will stress power grids even more. |
 I actually bought a few last week, having always found reasons not to since it listed. Still not exactly a fan, but accept that the current price and yield are probably too harsh. And that the investments have now had a few year's to bed in and whilst not always performing as hoped, none have gone bust or lost serious value, as yet.
General Atlantic buying in, as well as at management level, also gives a bit of comfort.
My current concern would be Onyx, which we were told last March:
"The Company's development platforms, the largest of which are Onyx (onsite solar) and EVN require further capital to enable the management platforms to be scaled up and value created in both the platform and the associated project pipeline. With a view to maximising the opportunity whilst conserving the portfolio's current prudent gearing levels, discussions with select prospective co-investment partners have been initiated."
And since when at least another £90m, courtesy of SEIT's expensive RCF, has been stuck in it. So, if they can't conjure up a co-investor shortly, at a non distressed price, then that won't be good. |
Unfortunately the twin effects of endless (ex last November) AUM drain from the UK markets are mergers, and a move to ETF/tracker/size (for liquidity)/US.
So even something like SEIT, with its half billion market cap, may get sold right down.
Some great ops for us, but I'll feel better once the weak hands are gone, & s/p's can find their level again.
Fortunately with SEIT, we're paid to wait. |
Just why ARE they selling continually - and do we know it's their intention to sell the remaining 10%?
I'm a yield hunter, so in a way it's good, but only if you keep buying more. I thought I'd pretty much caught the bottom at 50.4p - and that may still prove to be so in time - but 12.74% at 49.6p is impossible to resist as it seems fairly safe to me, but WDIK!? |
Closed at 12 month low, down over 30% from 1Y high. Now have lots at an average price of 50.7p including stamp duty and a few broker commissions. Maybe pushing my luck as brought around this price 3 months ago and sold between 57.4p and 58.5p, prior to Ex Dividend day. Can't see going much lower given discount and huge yield. Never really know. However risk reward ratio is looking good. |
Yup - another year and they will be out! (assuming 5% their final target). Just keep adding as they squeal. |
I happy with that. I have plenty of irons moving in the other direction so it would be great for this to stay under pressure so I have a destination.
The prior notification was 2 December so they aren't yet going all in to crash the price but it is certainly going to be under pressure. Note that even on HLs banking product market place 3 month fixes are at best 4.3%, so one could see more individual yield seekers looking at trusts once more. |
Another percent gone. Still squillions left :-( |
Look at the trades today. Until the supply runs out the share price will be contained. It will then move up, and buyers that are prepared to invest when they see positive momentum will join in. It is a consistent behaviour with value. The good thing is acumulators get a meaningful chunk to reinvest every quarter. |
Doesn't the share price usually drop by the div amount on ex-div date though ?
Also a recent holder here, but does seem odd it's not bounced along with everything else lately. |
It's a good time to buy now because there is a dividend due to be announced. Last year it was announced on 23rd February and there was a quarterly update released a few weeks later. I've bought this morning at 50.1p |
Finkie, could you analyse a bit why SEIT gives you a bad feel, and why you continue to hold it? If I don't like a company, I sell it (or don't buy it in the first place) and turn my attention elsewhere. |
I don’t like this company it gives me a bad feel and I own a chunk of it. |
Also doubled up this afternoon. If 3 months ago is anything to go by, could get another 18% dead cat bounce towards next Ex Div day. |
I've been buying more as well. I'm nervous about RED and Onyx accounting for 29% of the portfolio but flip side is that both look solid, as in unlikely to be subject to big write downs. Famous last words.
Also cash appears on the tight side, hence no buybacks
Now valued like tech PE, valuations viewed with extreme cynicism but I'd hope that SEIT's assets are more saleable.
Whatever, the 43% discount to NAV factors in a lot of bad news and the directors were so bullish in December...... Why would someone like Roper mislead the market? |
Just topped up (again). All the 50.04 trades currently, which show as sells are in fact buys (mine being one of them!).Here's hoping no nasty surprises lurking around the corner, you would hope a lot already in the price at this level... |
... apart from being 10.48% owned by Investec. |
Difficult to see that SEIT has done much wrong, but is very unloved, even for the sector. |
The problem with EBOX was IIRC they never did a net realisable value balance sheet and as it wasn't a reit and had actually made money there would have been latent taxes so it's hard to work out just how cheaply it was sold for But given who it was sold for and the cheap debt we can be sure it still went too cheaply I was happy enough as I just bought in for the wind up so got less than wanted but quicker than expected |
Trust in the managers evaporated when interest rates rose. Then they started to trust management more when interest rates started to come down. But ooh, then inflation looked a bit more sticky and the rate of IR cuts was slower than anticipated those doubts about management resurfaced.
Just overlaying IGLT (also distributing) from 2021, as long gilts started falling well before the long duration trusts and it seems they didn't trust I-shares managers' either.
I have absolutely no idea why I am making a case here, I don't want this to move at all yet. It has been phenomenal to experience trusts close their discount, for one reason or another, sequentially rather than concurrently. So to be perfectly frank I would rather the doubters invested in GCP at this time! |
So true; quality at a bit of value often better than deep value junk |
Hang about - you have to take into account the fall in medium term Gilts to make a proper analysis of the share performance. Even if you ran a fund "perfectly", there will always be some interest rate risk. Has to be.
There was ample opportunity to sell at higher prices - except many did not because they were unaware of the future 400bps rise in Gilt (and UST) yields. As were all the major banks and analysts, the HF managers, central bankers and Presidents - so of course it's risky. But so often I see the outcome "annoying" to certain holders. The way to avoid this angst is to buy 3m Bills. See how far that gets you over time. |
Also let's not forget that these "amazing value" REITs/ITs are only so if interest rates drop. If you look where e.g. SUPR trades relative to 10YRs over time then the price looks about right as in the credit spreads over Gilts have remained pretty constant. The supermarket sector in parts (Morrisons) is also under some pressure now the discounters have arrived vs post bumper profits.
I have bought a lot of these things but for them to rerate we need to see lower yields/inflation and that's not a given.
Also I'm pretty shocked at how much the "managers" take out of earnings. It's like the opposite of buying a high return on capital quality compounders. First you have enormous capital requirements and then you give away around 25% of rents to managers who seem to be at best mediocre and at worse fraudulent. |
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