Sqn Asset Finance Income Share Discussion Threads

[apollocreed1] 12/8/2019 22:49

@Lord gnome-sorry, my mistake. I checked the last factsheet and they are 66% UK exposed, so not sure where I got the wrong idea from.

[lord gnome] 12/8/2019 20:38

SQN are mostly uk oriented to my knowledge, apollocreed1. Somewhat less than 20% in USA. Happy to be corrected if anyone knows different.

[apollocreed1] 12/8/2019 19:20

Am I correct in thinking that SQN is a similar business to GCP Asset Backed Fund and Hadrian's Wall Secured Income? If so, then I would prefer SQN on the basis that its assets are in the US and not the Brexit/Corbyn exposed UK.

On the other hand, GCP have experienced managers with a great track record whereas SQN seem to be more naive - but the premium on GCP may reflect the more respected management.

Hadrian's Wall have just the discount to make them attractive, but they are UK exposed and the managers don't seem to have much of a track record of risk management or performance.

[hiddendepths] 12/8/2019 17:20

Hmm. seller very much in evidence all day again!

[hiddendepths] 12/8/2019 08:40

I had a holding here until a couple of years ago (sold when the Suniva issue surfaced while it was trading at a premium) and am looking to get back in.

Agreed LG - on reflection it's too thinly traded to be a worthwhile short.

I suspect the Suniva thing took the gloss off the perception of management being a safe pair of hands. Hence the loss of premium. Then there's a realisation that the leasing risks are not insubstantial in a recession. Further, the NAV performance has been, frankly, disappointing. But at this level the risks and downsides appear to be well and truly in the price already.

For the SIPP, it looks like a clearcut buy. I have a stock earmarked to sell and this is number 1 on my buy list at present.

[spectoacc] 11/8/2019 18:33

Only a few years ago these were on a decent premium. That seemed incongruous; not sure the discount doesn't seem so too now, assuming there's not a loan gone bad that we've yet to hear about.

Hope they've not been lending to Burford ;)

[a0002577] 11/8/2019 10:33

Stock Bid Offer DIVIDEND Yield BID Yield/OFFer
(SQN) 83.20 85.00 7.25 8.71% 8.53%
SQNC 87.00 88.50 7.25 8.33% 8.19%

Sorry these don't quite line up : Seems to be very good value and provides a monthly income

[lord gnome] 11/8/2019 09:54

Not sure that this is one for the shorters hiddendepths. Easier targets? I think this could just be down to one forced seller dumping stock. If only Woodford was involved here we would have a ready answer, but he isn't and we don't. As it is, the timing of any additional purchase to lock in a heady yield could be critical. The amount of discount to nav makes the problems with Suniva pale into insignificance.
Interestingly, SQNX, the 'C' shares, have also dropped back below 90p, so I doubt anyone is shorting both together and I doubt it has anything to do with Suniva. SQNX just dropping in sympathy with SQN as the differential stretches out?
Looking at the chart, I see that SQN visited these levels back in March last year. It recovered then and will hopefully recover again.
Either that or we have an unknown unkown known only to a few.

[hiddendepths] 11/8/2019 08:52

Still going down on hefty selling and the ready availability of stock closer to the bid than the ask. I suspect it's being shorted, as are other high yielders in the sector and elsewhere.

Seems irrational to me but in an era of low interest rates, the argument that "there must be something wrong" seems to strike a chord with the nervous, of whom there are many at present.

[lord gnome] 31/7/2019 17:22

I've had a closer look at today's trades. All trades are reported as sells because it is possible to buy at well below the mid-point between bid and ask. Trade was actually much better balanced, but AT trades took the bid out each time and it never came back. The price has been governed by a small number of AT trades.
I haven't a clue as to what's going on behind the scenes. Assuming nothing sinister, the discount to last stated nav (95p) and the yield of over 8% puts this firmly in bargain territory.

[a0002577] 31/7/2019 15:42

But the C shares are holding up

[lord gnome] 31/7/2019 15:04

Still going down and picking up speed. All sells today or so it seems. Some large sells as well. Do we have an ii dumping? Looks that way.

[a0002577] 30/7/2019 20:25

Is it the Suniva investment causing the problem? At the moment the ords are trading at 86.4 bid) and 88 offer. The C shares (which are not impeded by the Suniva deal) are trading at 89 bid and 91 offer - unusual in recent history where the C shares have traded below the ORDs

[spectoacc] 30/7/2019 16:37

Are they currency hedged? Seem to recall they are.

[lord gnome] 30/7/2019 16:30

I did wonder, but given the overseas investments I thought Brexit might work in our favour.

[chucko1] 30/7/2019 15:48

Likely no more than Brexit angst.

[lord gnome] 30/7/2019 15:33

Most disappointing to see this continuing to drip away. Something underlying that we don't yet know about?

[chucko1] 04/7/2019 09:27

LG, very well played!! Is now 90.40 bid. Seems to be inching higher recently. Price stability or even a small rise from here is worth having with what is now an 8% div yield.

[lord gnome] 04/7/2019 08:25

In for a few this morning. Took advantage of a very good ex-div price first thing to buy at under 90p. So good it is showing as a sell. Thank you very much!

[spectoacc] 21/6/2019 13:41

Can't make my mind up - US/China trade war surely must add risk to US lending.

[a0002577] 20/6/2019 18:21

They seemed confident in their last report that all would turn out well and had a meeting to postpone the C share class conversion. That went through despite the fact that the C Class owners stood to benefit quite a lot if it happened before the Suniva resolution.

Unless there is something we don't know the market is underpricing this at the moment.

In the meanwhile the monthly dividends keep coming in and when I have spare cash on one pot or another I buy more.

[makinbuks] 20/6/2019 12:30

I wonder what John Barron makes of the current share price

[chucko1] 27/3/2019 20:59

The problem is that as soon as they announce performance on Suniva, this will not be at 92p. I am assuming there will be some future meaningful developments and position ahead of this. I suppose I am really taking advantage of people who have just become fed up! But even absent of progress, they cover their roughly 7.75% dividend yield.

[makinbuks] 27/3/2019 18:01

Yes I would expect the discount to narrow once they confirm Suniva is performing again in one way or another. Some months off yet

[chucko1] 26/3/2019 12:19

All seems unexcitedly OK. And that’s what I’m looking for here. Furthermore, it seems that that is what they are aiming to deliver.