Standard Life Investment... Share Discussion Threads

[dragonsteeth] 28/1/2019 09:25

How you doing PA , you still running?

[pavey ark] 26/1/2019 12:04

Update this week (30th ?)and looking at the previous years it will be very detailed.

Given the activity and positive news in Q4 it should make good reading but the BREXIT nonsense it bound to have an effect.

I expect the dividend to nudge towards 5p which given the assets and very modest gearing makes this a fairly good place to be.

[dr biotech] 18/1/2019 16:36

5% in a day. I have a wad in my SIPP that is in cash and I was looking to add here - made a deal with myself to wait after brexit but can't help wondering whether the boat has sailed. Still sure there will be some down days in the months ahead...probably monday

[nimbo1] 18/1/2019 11:46

probably got a few people buying and although I don't buy on telegraph tips its better to have main stream media agree with you than disagree with existing positions : )

[nimbo1] 16/1/2019 11:58

It's the most simple way to make money - buy things when everyone else seems to be selling. Investment trusts make it doubly easy because you can see when sentiment is depressed due to the widening discounts to nav. The worst case downside scenario everyone frets about hardly ever transpires. And even if it does - as you say life goes on : )

[pavey ark] 16/1/2019 11:39

nimbo1, I agree.I bought many more of these than I originally intended and now comfortably in profit but that may not last.
Given the assets, the lease length, the client list, dividend and discount to NAV I felt that thing had turned a bit silly here.

Yes, the swivel eyed Telegraph readers may yet win the day and a hard Brexit will be really hard but life goes on.

[nimbo1] 16/1/2019 09:30

I just got some at 81p - a lot of these Uk focussed assets too depressed. Yes I know you can argue the outlook is bad but it’s not like that’s a secret! So how much lower could they reasonably go. IMO only

[essentialinvestor] 11/1/2019 15:53

Had a few at 78.25

If it's a No deal, we are in to the 60s share price IMV.

[pavey ark] 11/1/2019 08:35

Bought more at the end of play yesterday at 6% yield and 14% discount.
I expect the dividend to be covered and a fair chance that after being held for two years it could be increased.
Still have both eyes on this Brexit shambles but given their portfolio spread, client list and average length of leases in place I'm not that concerned.
A mad, no deal exit will hurt us all and the price of all shares will fall but I see some resilience here and would buy more if things got silly.

[essentialinvestor] 06/1/2019 11:32

With the recent acquisitions, would think so.

The more interesting question perhaps, is it sustainable through
the next cycle, that remains to be seen.

Whoever was buying SLI on an 8% premium to NAV just last September,
has little grasp of commercial property in what looks to be late cycle.

[sleepy] 06/1/2019 11:25

The dividend yield may be 6% but is the dividend covered by rental earnings?

[essentialinvestor] 05/1/2019 15:14

Might expect some support around the current SP, with a yield of 6%.

If not, then the post referendum plunge lows were around 72-73 pence.
For lower than that, I think you would need a wider equity bear market
and recession.

Undoubtedly Brexit uncertainty is now impacting significantly on sentiment.

I added yesterday at just over 78.

[dr biotech] 04/1/2019 21:03

This really is friendless and I’m not wholly sure why. But I have decided not to buy anything now until after brexit. It’s difficult to see that there won’t be better opportunities around when the full uncertainty is in play.

[essentialinvestor] 04/1/2019 13:05

SREI trading at around a 17% discount to NAV, prefer SLI.

Below 80 pence came more quickly than I expected.

It may be quite some time before SLI get to issue shares at a NAV premium
again.

[pavey ark] 01/1/2019 15:13

As I said in a previous post, I have no great experience in investing in property companies due to a reasonable part of my assets being tied up in property I owned(diversification issues).

With the recent sale of most of my property assets I was looking for an IT specialising in property and this caught my eye:

Standard Life Investments Property Income Trust (SLI), which has a yield of 5.4 per cent. And over five years its share price has risen 73 per cent, beating the Association of Investment Companies (AIC) Property Direct – UK sector average return of 65 per cent.

Because of its good performance, Standard Life Investments Property Income has mostly traded at a premium to NAV over the past few years, and as recently as September was on a premium of around 8 per cent. But since then its rating has fallen quite sharply, and as of 15 October the trust was trading on a discount to NAV of 2.1 per cent, according to Winterflood Securities. Reasons for this include uncertainty about the impact of UK’s withdrawal from the European Union on commercial property and concerns on whether the property cycle is in its latter stages.

Despite this, Canaccord Genuity has recently upgraded its recommendation on the trust to 'buy'. “[Compared with other UK commercial property trusts this one] gives the highest effective exposure to the industrial sector, which has the highest consensus forecast return over the medium term,” says Mr Brierley. “It’s a high-quality vehicle and the derating is a good opportunity to buy a very good manager on a discount. The yield is also attractive on a relative and absolute basis.”

The manager of this trust is highly respected and took over in 2006.
I would suggest that he would have had little chance to change things or prepare for 2008 but obviously he looks to have done well since.

You pays your money you takes your chance.

[essentialinvestor] 29/12/2018 19:22

Is a 10% discount a reasonable entry point?.

Depends on the next cycle.

Current NAV remains around 20% Lower than 2007, nearly 11 years later.

Dividends were cut by 40%.


I'm not holding HLCL atm, keep an eye on that company as they are
exceptionally capable. Their NAV is well above 2007 levels
Interestingly they recently sold out of industrial/distribution,
They appear convinced selected London office space now offers better returns.


SLI has a loan to value of around 25% following the large Birmingham purchase.
The dividend may now be fully covered.

Is this level of dividend sustainable?, We will only know when the next cycle
arrives.


Edit - SLI NAV is about 40% Lower than June 2007
having checked the data.

Current NAV remains lower than 2004. The performance is significantly weaker
than I first thought.

[essentialinvestor] 27/12/2018 16:07

Had a small amount more @ 82.22. it's gotten away very lightly today
given wider markets.

[pavey ark] 24/12/2018 20:50

EI, can't object to anything said in your last post and happy to run the rule over a property company at 30% discount.
Very brief look at HLCL but absolutely not interested in a predominately London office company with a LBV twice that of SLI.
The SLI management explicitly mentioned retail and London office space as the two areas that they had largely extracted themselves from.

If any company has a large retail or London property component then I would expect them to trade at s large discount.

The question for investors on this board is whither the 10% discount that exists in SLI is the correct entry point ?

My own very personal take is that the assets SLI have invested in should be required in all but the most catastrophic Brexit/ macro economic outcomes....albeit with the possibility of some dividend reduction.

I note that the dividend was cut in the 2008/9 bloodbath but started rising almost immediately afterwards.
I like to be careful but if investors were to try and plan/worry about another 2008/9 then they would be unlikely to get out of bed in the morning.
Having said that I hold a large cash component which is an obvious comfort.

[essentialinvestor] 24/12/2018 18:11

Bought back a small amount this week so I hold SLI.
Sold at a premium to NAV as
did not think a premium sustainable in late cycle.


Just to clarify I'm not making any buy case for LAND,
retail compromises approx 45% of their assets.
Find it striking so many of the major REITS sell on
such large NAV discounts. HLCL which is 100% office is on
a 30% plus NAV discount. Perhaps the market is questioning
current valuations or to an extent factoring in the next cycle..

Glass half full?, Yes that's a fair comment.
I'm cautious on markets currently, however attempt to
remain open-minded.

Intend to add lower, if available. Luck with your holding.

[pavey ark] 24/12/2018 17:41

DrB, you beat me to it.
The average lease, the current yield and the rather agile management style all appeal to me.
Brexit is a large factor but at the end of the day the UK is a large economy and the need for the sort of assets we have here will remain.

EI, having read some previous posts I see that you held here when there was a premium but having sold you tend to have a glass half empty view.(or so it seems)
I recently sold two commercial properties I owned and up to that point I stayed well clear of property based shares to diversify my assets.
I spotted the IC piece on SLI but it was at a premium and 5% yield there was also some concerns about dividend cover.
Since September the news here has been very positive, the share price has fallen considerably, the premium has gone and the yield has increased.
Could it do lower ?.....of course it could!!
I'm a fairly experienced investor (just not in property shares) and having done considerable research into SLI the point has come when things look good to me.
I am certainly experienced enough to know that nothing is certain but having surplus cash at 1-2% this purchase fits my current investment needs.
Happy to hear of other property investments but not happy with anything in retail.

[dr biotech] 24/12/2018 15:47

Land securities has a large retail portfolio. That’s not something I’d want and it probably explains a large part of the discount. Brexit will be next years story, if we end up level this time next year it will have been good

[essentialinvestor] 24/12/2018 13:15

Pavey, if you intend just to buy and hold long term the current price
is reasonable(ish) - on the assumption they hold the dividend through
the next cycle. Depends how ugly events get. LAND currently trades on a 40% NAV discount, so makes me wonder are NAV's about to be hit for six.
Find out over the next 12 months.

I'm not expecting a rerun of 08/9.

[pavey ark] 24/12/2018 12:58

Bought here today after spending some time going over the recent reports and news.
I expect the year end asset value to be close to 92p and the recent deals and reduction of the voids makes the dividend cover much more satisfactory.
Very low retail and very low London offices makes the performance look more stable.

10% discount and almost 6% yield will do for now and I expect I will hold for some time.

Brexit is almost certainly a very bad idea but life goes on and the portfolio will continue to produce returns.