Smithson Investment Share Discussion Threads

[bezer] 26/7/2021 15:14

Many thanks Wildshot:
Yes, it would be great if Smithson could make FTSE 100 status.
Yes, I am aware of the 85% up against the market cap. The following is my view and please correct me if I am wrong:
I hold both the main Fundsmith Fund (which I adore) and Smithson. I understand that fees are controversial to some investors....... Personally, I am totally relaxed about the fees as I am more than happy to pay for the excellent performance that I have enjoyed since I originally invested in the main fund in August 2018 and Smithson on day one.
Now, I believe that I am correct in saying that Smithson can issue equity but not the main Fundsmith Equity Fund. Smithson is regularly issuing new shares at a premium to NAV as the share price seems to spend approximately 95% of the time higher than NAV. The profits from this conveyor belt of equity issue all go into the NAV to the benefit of shareholders, as far as I am aware...... Thus, as the profits from this operation are considerable, are we not effectively having our fees paid for us and more by this process? This is not (cannot be?) the case with the main fund......
If I am talking nonsense, please put me right, but that is the way I see it. Every time they issue more equity at a premium to NAV these extra profits go towards our fees... Comments please! Thanks.

[wildshot] 26/7/2021 13:40

Hi bezer, are you taking into account that the share price performance is up ~85% since launch about 3 years ago. The rest of the market cap has come from the repeated issue of new shares to meet demand for the SSON investment trust. So yes it can be pushing for the FTSE 100 which is good for profile however the rise is not just down to performance.


The rise in the issue of shares and the growing market cap has made me wonder if it is worth e-mailing Fundsmith and asking if they are looking to revise down the % fees. However judging on Terry Smith's past comments on fees for the Fund I very much doubt we'd get a favourable outcome, just more dough for Terry, Simon et al.

[bezer] 25/7/2021 19:04

Sorry! Me being thick - I meant £3 Billion! To busy look at Microsoft Mkt Cap!

[socal1] 25/7/2021 18:24

£3trn would be comfortably in the 100 I think ;)

[bezer] 25/7/2021 17:56

Did anyone else notice this fund has now a market cap of a stone's throw off £3 Trillion? The first Factsheet dated Nov 2018 reported a Market Cap of £850m. This fund could be a candidate for FTSE 100 status if it continues like recent performance.....

[bezer] 11/5/2021 22:24

Hands up, I hated the first Wingstop restaurant in London. The numbers are great and I am entirely happy with Wingstop added to the Smithson portfolio. If this is another Dominos Franchise, we are quids in. Let's hope for the best guys....

[adamb1978] 07/5/2021 09:44

Interesting addition (Wingstop). Financial metrics look interesting but pretty levered and PE is just over 100x this year (and even going out to 2024 is on a PE of 55x). Maybe those forecasts are wrong, and whilst Wing would be a reasonable sized in the UK, its probably poorly researched given size relative to the US market so credible that they could be undercalled

(I hold SSON before people ask!)

[aa29] 06/5/2021 09:01

AGM presentation video



Also here

[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.