Smithson Investment Share Discussion Threads

[lomax99] 06/5/2021 06:19

Part of the editors view in today's Shares:Perhaps the key attraction to Smithson for the two Domino's companies and Wingstop is the fact that they are all master franchise owners. Companies with franchise business models have often been good investments over the years. Many have been able to pay generous dividends as well as deliver capital growth for shareholders.Franchise models can take various forms, but what connects them all is their 'capital light' characteristics. Each franchisee is expected to provide the capital investment and manage the operations in return for the legal right to use a brand or business process.The main advantage of such an arrangement is that the master franchise owner can expand quickly and without the need to raise equity or bank debt to facilitate growth.Wingstop beat expectations with its first quarter 2021 earnings (28 Apr) and announced plans to expand into Canada. During the period it opened 41 net new Wingstop restaurants, a record first quarter that translated to year-on-year unit growth of 11.7%.Refinitiv scores Wingstop 96 out of 100 for earnings quality, based on components such as cash flow and operating efficiency.While chicken and pizza may not initially seem like good investments, Smithson is clearly taking the view there is good money to be made if you pick the right franchise owners.

[hectorscrackhouse] 05/5/2021 22:30

Wine, so they say, is a half-decent investment of itself.

Still, I would drink a bottle at chosen SSON price increments, either on the way up as a celebration, or on the way down as a consolation!

Cheers!

[bezer] 05/5/2021 22:00

[sorry Hector] I had to look that quote up.

Question to you: Now we are talking Barolo, I have looked up my cellar and your call. I hold 12 bottles of Barolo Ciabot Mentin Ginestra Clerico 2004. I think it should be sold and invested in Smithson, however it is very nice. What would you do, sell and invest, or drink it with good company? I am inclined for the latter! Bez. [no problems either way].

[bezer] 05/5/2021 21:56

Many thanks Hectorcrackhouse. I had to look that

[hectorscrackhouse] 05/5/2021 21:33

Barolo, the king of wines and the wine of kings.

Thanks for exploding the mines on the dodgy chicken Bez.

[lomax99] 05/5/2021 19:40

Wing stop was mentioned as a contender in this FT article around the time of the float:Https://www.ft.com/content/437ce926-b00e-11e8-8d14-6f049d06439c

[lomax99] 05/5/2021 19:19

Pretty sure mentioned them around the time they floated, presumably just waiting for the right entry point.

[hectorscrackhouse] 05/5/2021 19:11

New holding

""Portfolio Comment for April 2021
We finished building a new position in Wingstop during the month. Wingstop is a fast growing US restaurant franchise, specialising in chicken wings, which now has over 1,500 restaurants around the world.""


Never heard of them, although there are a few branches in the UK. They do breast as well. But the underlying theme is definitely the chicken.

[the juggler] 02/4/2021 21:31

Thanks lomax99, an interesting read.

[lomax99] 02/4/2021 11:37

Worth a read: Https://www.itinvestor.co.uk/2021/03/how-big-can-smithson-get/

[mattboxy] 17/3/2021 22:00

Sorry to hear that but she was indeed a wise investor - good luck!

[lomax99] 17/3/2021 19:13

The 2020 annual report is available:Https://www.smithson.co.uk/docs/default-source/smithson-annual-reports/annual-report-for-the-year-ended-31-december-2020.pdfThe table at the bottom of page 16 shows how lame the average constituent of the MSCI SMID reference index is with reference to key performance indicators.

[bezer] 04/3/2021 21:00

wildshot: You sound like a real Gentleman.

[wildshot] 04/3/2021 17:27

Thanks for sharing hectorscrackhouse. Rollins has been held for a while by Keith Ashworth-Lord in the Buffetology fund. He likes the financials and repeat trading of this business, as someone who owns a property in Florida Keith explains that vermin control is obligatory and not optional - good repeat business.

[hectorscrackhouse] 03/3/2021 10:47

""Portfolio Comment for February 2021
We initiated a position in Rollins, a US based provider of pest control services, a company which has demonstrated consistent growth and strong margins and returns over several decades. We began purchasing a stake after a negative share price reaction to recent results. We exited our position in Abcam during the month after we became increasingly concerned regarding the future capital allocation in the business.""

Clearly there is money in vermin.

[bezer] 20/2/2021 20:21

qvg: Beautiful, Just beautiful! M

[qvg] 20/2/2021 16:02

bezer, i get a double benefit - I both hold Smithson, and I bought Fortinet before Terry did

[bezer] 20/2/2021 09:33

Smithson has been weak so far in 2021 so I could not resist a top up this week.

In my notes I wrote at the time that Fortinet inc (bought September/Oct 2020) for roughly 120. It is now 171.93, a rise of 43.28%. You can't knock that!

[bezer] 04/2/2021 19:11

Sadly, a dreadful January best forgotten for all manner of purposes! Fundsmith and Smithson and our new friends at Blue Whale all underperformed the Market. I doubt in five years time we will remember their Jan ’21 performance. If we remember anything about last month it will be the usual January traits of cold; miserable, dark early without the pick up of the annual hope of Tenerife in March, as Spring homes into view..... On a happier note, it should be noted that in Jan 2013 Fundsmith did 9.4% up – where did that come from historically? – just stay invested in these great funds.

[hectorscrackhouse] 04/2/2021 17:42

New position accumulation from latest Monthly factsheet:

Portfolio Comment for January 2021
We began buying a new position for the fund, the name of which will be revealed when we have accumulated our desired weighting. The top 5 contributors in the month were Qualys, Domino's Pizza Enterprises, Ambu, Technology One and Domino's Pizza Group. The top 5 detractors were Sabre, Paycom, Verisk Analytics, Simcorp and Rightmove.""

[hectorscrackhouse] 20/1/2021 12:47

Terry Smith's annual letter for the main fund out today.

Nothing very startling or new, although this bit struck me as quite interesting

"I became increasingly bemused listening to or reading various
commentators predict that the economic recovery from the COVID
lockdowns would be V shaped, or shaped like a U, an L, a W, a
bathtub or like the Nike swoosh (I’m not making this up). But just when
I was bored of this entire meaningless alphabet soup of predictions, I
came across one that I thought might be correct and help to explain
what may happen. It was that the recovery may be shaped like a K. A
K shaped recovery occurs when different sectors of the economy emerge from a downturn with sharply differing trajectories — like the
arms of the Roman letter K."



Oh, and the fact he can't spell 'de rigueur' ;)

[marksp2011] 08/1/2021 17:40

I bought some more today which really screwed my average of 960p

Still............. let's hope I have the same issue next year