Sqn Asset Finance Income Share Discussion Threads

[touche] 22/1/2020 15:36

Taken the opportunity to top up, won't be as bad as feared in th AD space

[spectoacc] 22/1/2020 14:36

And that's 50p assuming no more bad news! I'd guess c.2 years for wind-up, from November, but may happen sooner if they speak to major s/holders and know early on that they're going to lose it.

Loans are the most interesting end of the market atm IMO, now that property IT's have rallied.

[skyship] 22/1/2020 13:37

Sometimes so tempting to buy into a fall of this size; however the assets remain opaque. What is the true value; and what would be the likely timescale of liquidation?

In view of the seemingly rubbish management, better to wait until ridiculously cheap - Specto's 50p perhaps...

[chucko1] 22/1/2020 13:31

I agree that the management and communication has been poor, and has been for some time. Again, therein lies the value at some price.

[chucko1] 22/1/2020 13:29

Eeza, yes, I am a PI, but am I not an institution as well?!

[eeza] 22/1/2020 13:15

"Massive institutional selling" - maybe, but someone is taking the other side of the trades. Not PI's I would suggest.

[delspirido] 22/1/2020 13:07

Massive institutional selling , poor management and communication , difficult asset valuation - says it all really

[chucko1] 22/1/2020 11:45

Just bought back 1/5 of what I sold. 63.57p. Red meat!

[eeza] 22/1/2020 09:39

Sells are still being sucked up without moving price.

[spectoacc] 22/1/2020 09:02

@andyj - that divi is uncovered remember.

I see the value as being in them losing November's wind-up vote, possible Suniva returns, possible AD delayed returns, all on top of a (as you say) discount to the (current) worst-case scenario.

But wind-up likely to take a few years from November, so some discount is warranted.

[andyj] 22/1/2020 01:44

I agree. The dividend, if held, is now just over 11%. The worst forecast write down was 13p from NAV and it is now 19p below the level it was before the announcement. At this level you have worst case scenario priced in and a lot of mistrust and punishment. I see opportunities when emotions take place of reason.

[eeza] 21/1/2020 22:01

Quality of management appear to be the biggest risk.

[valhamos] 21/1/2020 21:32

Marine (11 ROVs and ancillary on vessel equipment) and waste processing are the 2 largest investments for the C shares but other than the concentration of credit risk, in the absence of any detail, there's nothing to suggest that risks, e.g. asset risk, are outside of what is normal for this sort of investment.

[chucko1] 21/1/2020 18:07

Chopp1, I do agree. I sold a large chunk as soon as the news hit, but will repurchase some of them at this level.

The switch into the C class was an inspired trade - if not entirely for the correct reason! (the logic was still good, however). But I do deserve some luck were I to share which football team I support.

[chopp1] 21/1/2020 17:20

This is all rather speculative at the moment. From what I have heard internally, the write down on nav is likely to be around 8 p which will leave an nav of around 85p. Not good but livable. Hopefully they will learn not to put over 30% into one asset class in the future. The sell off to me seems massively overdone, I have to say.

[horndean eagle] 21/1/2020 16:53

There are a few shared investments iirc. Don't have details handy. They really don't make it very easy to see what's what. Within C portfolio I would be worried about Marine and waste processing equipment. Need an asset by asset breakdown really and commentary about status and recovery expectations.

[valhamos] 21/1/2020 16:25

I have a small amount of C shares from last September. The portfolio for these seems to consist of a greater proportion of equipment leasing and receivables transactions rather than the more riskier project finance as compared to the ords. Having 41% of the ordinary share portfolio in one AD asset class under project finance terms was too risky imo. To be honest a bit naughty calling it "SQN Asset Finance" when so much was project finance.

Horndean Eagle - other than items like "US Dollar-denominated investment in a diversified portfolio of equipment assets through a US reinsurance company" I cannot see much in the way of overlap; which ones are you thinking of?

[horndean eagle] 21/1/2020 15:16

There are a number of shared investments with ord portfolio which leads me to think quality cannot be great. 17p may be a little high but I think there is some risk in there. C will definitely be wound up. I was in from issue date. The scumbags sat on that cash for ages rather than do the decent thing and hand it back. There is a lot of displeasure with these cowboys. No doubt a lot of shareholders holding both classes of stock will just want rid.

[spectoacc] 21/1/2020 14:44

NAV of X was 97p at last count, with a latest due out shortly. Current bid price 80p. Just how bad do you think the writedowns are going to be? Fully covered 9% yield. No AD investments. No Suniva.

One or two writedowns wouldn't be a surprise in a big portfolio, but 17p of them? Even the Ords would struggle to match that.

C's won't be wound up IMO, why would they be?

And certainly won't be merged with the Ords!

[horndean eagle] 21/1/2020 13:42

Had a look through c portfolio assets. Can't say I am hugely impressed by it. Would have preferred better assets in spaces which were doing better. Undoubtedly will be write downs. Have to hope board bite the bullet early re continuation and not re-invest proceeds. Will only drag the process out longer.

[tournesol] 21/1/2020 12:06

Shows the wisdom of selling immediately a red flag is hoisted aloft.

Management almost always turn out to have been too optimistic with their warnings and things are almost always worse than thought and take longer than expected to fix.

[spectoacc] 21/1/2020 10:21

Agreed, but whoever it was yesterday bought a lot above 81p!

Per post above, still wondering where the value lies in SQN - we're clearly getting closer. Will prob take a year or two to actually wind it up post-Nov continuation vote so I'd want I reckon 20% below a revised NAV. Last NAV 93p, say 80p, possibility either way on Suniva, even the highest estimate from yesterday's RNS on the AD doesn't get close to writing them all down.

I'm going 50p I reckon, but reserve the right to buy higher or lower. Or not at all.

[lord gnome] 21/1/2020 09:58

Still a large number of sells going through. But who is taking all the stock, and why?

[lord gnome] 20/1/2020 15:00

They have been paying dividends partly out of capital until Suniva is sorted. If the AD portfolio is hitting problems, I can foresee a dividend cut being inevitable.