Utilico Emerging Markets Share Discussion Threads

[davebowler] 16/10/2017 13:31

UEMS is still a bit low at 40 to buy and 37.3 to sell. It should be c.46 to buy.

[kenmitch] 12/10/2017 13:28

At last! UEMS up over 10% with share little changed. Now 40p to buy and 38p to sell. Still too cheap, but with UEMS worth 44p, not as crazily undervaluedas it was.

[kenmitch] 11/10/2017 14:00

Still the same barmy UEMS price. Have never seen warrants/subscription shares so cheap. Obviously it needs the share to go higher still to get UEMS higher. Soon for that?

[kenmitch] 06/10/2017 13:51

UEM 228.5p to sell and yes all time high. UEMS now worth 45.5p but buy price is a bonkers far too low 36p. Seems this ludicrous undervaluation will continue simply because so few trade sub shares there are few if any buyers to correct the price.

If only these could be exercised at any time! Then there would be a great arbitrage opportunity. I.e buy UEMS at 36p then exercise and pocket the 9.5p (30%) difference, and do so ad infinitum until mms wake up to current price anomaly.

[davebowler] 06/10/2017 12:04

£2.30 to buy makes it an all time high I think. UEMS is still cheap.

[kenmitch] 05/10/2017 15:44

UEMS worth 43.5p with share back to highs at 226.5p to sell.But UEMs still only 35p to buy. Last time share at this price UEMS was 38p to sell.

[kenmitch] 04/10/2017 20:58

Agree re sub shares. Was surprised to see buy price drop to 29p. Still only around 33p to buy today.

[davebowler] 04/10/2017 10:29

The sub shares are again a bargain, having an intrinsic value of 39p.

[kenmitch] 19/9/2017 09:05

Share now back up to 219p to sell, so UEMS worth 36p, but could be bought for just over 31p yesterday. Worth reading the fact sheet.

[vacendak] 16/9/2017 11:18

August factsheet.


NAV progression a bit meh, but upbeat commentary on the holdings.
The UEM share price got hit on Friday due to the current excitement about Sterling I suppose.

[kenmitch] 07/9/2017 15:57

UEM 225p to sell and UEMS worth/intrinsic vale 42p. UEMS just 35p to buy!

[kenmitch] 01/9/2017 09:31

Below is part of my first post on this thread on 15th Feb with reasons why UEMS looked a strong buy. One of the target prices has already been reached - the 32p sell price for 35% gain, against 5% for the share. The higher 42p target has also been hit but so far only the buy price. Very high chance that 42p will be exceeded if current bull market continues. Share now 226p to sell so UEMS worth 43p but can still be bought under 40p.

Target 240p share price. Then UEMS worth 57p if exercising but probably as now lower is deciding to sell the subs. Trustee route is risky but has the advantage of need to do nothing and just wait for proceeds in accounts.

Here's the first part of Feb 15th post. Hope one or two hold from 24p or so or lower:-

"The subscription shares (UEMS) are now very good value AND (some probably don't realise this) sub shares can go in to ISAs. For any not familiar with sub shares and warrants,they are traded the same way as shares though you may have to sign a risk form first if never having traded them before. As with shares they can be bought and sold at any time up to expiry date of Feb 28th next year.

Exercise price is 183p. So with the share at 205p to sell, UEMS are currently worth 22p. Current buy quote is 24.5p but they can be bought inside the spread at 23.25p. Yesterday they could be bought for just 21.3p.

Target a 5% gain for the share price to 215p and UEMS would be worth 32p, and around 35% more than the buy price today.

Target a 10% share price gain to 225p to sell and UEMS would then be worth 42p and not far off double the current price."

[kenmitch] 24/8/2017 17:12

Agree again. Also UEM is a good performer. 2nd out of 13 Emerging Trusts over 5 years and 5th over 3 and 1.

23% in electricity, 16% gas, 12% ports, 10% transport and 10% airports.

29% in Latin America, 29% Asia/Japan and 18% Europe.

Share stilltrading at discount of more than 10%. So very high chance of more to come for UEMS and hoping for/expecting at least 50p now, and with good chance of 60p.

[hiddendepths] 22/8/2017 19:25

Thanks kenmitch - agreed. Happy enough with my gains so far (doubled and then some) but hoping for quite a bit more before the subs go the way of all things.

On this one, I suspect many investors haven't realised that utilities in emerging markets is a growth sector!

[kenmitch] 22/8/2017 16:07

VERY interesting hiddendepths and good to read of someone else who not only realises what brilliant investments Investment Trust warrants and subscription shares are (now WERE unfortunately) but also knew how to invest in them successfully. Limited understanding of warrant basics was one of the reasons they fell out of favour, and we only have to look at the posts here and on the warrant thread to see how otherwise clued up investors don't "get" them.

e.g they rush to exercise at the first possible opportunity so as to get the dividends, so don't even realise (and still don't even when the figures are provided to show it) that the gains from the warrant/sub are far far higher.

Perhaps now UEMS is up 90% from around 20p when I first posted to say they looked well worth buying, to 38.5p to sell today, compared with share price gain of around 10% they will get it now......... if they haven't already exercised.

[hiddendepths] 21/8/2017 14:54

All time high :-)

Didn't risk the trustee on PCFS. Subscribed for about half and sold the rest in the market shortly before they expired.

Will probably do the same here.

I used to be a big investment trust warrant investor and devised my own model (which came up with very different valuations to the ubiquitous Black-Scholes used in the City). Made money on 24 of my 25 investments made on the model and a tiny loss on the other.

I mourn the disappearance of warrants. The model is gathering cobwebs on my laptop.

Just transferred my largish SIPP to self-select. It's going to be an Investment Trust portfolio with about 20 -25 holdings

[killing_time] 17/8/2017 18:44

Hi kenmitch, Just been reading what you posted on the warrant thread. Have come to the same conclusion that like you say I will need to sell early any subs I don't want to exercise. Thanks, KT.

[kenmitch] 17/8/2017 13:21

killing time.

re risking the trustee.

Trustee got a very poor price for Polar Finances subs. Share sell price around 20p so sub worth about 20p. Yet trustee only got a bit less than 15p. Don't know whether that was trustee greed (nearly 5p for their expenses) or they had to exercise at a discount to the sell price, or a bit of both. Hence my preference if possible to sell any subs I don't want to exercise at least a month ahead of final expiry date.

[kenmitch] 17/8/2017 13:18

jonwig.

Thought I had seen your posts before somewhere. After you left Mike Walters site I ran a warrant portfolio. Had to close it a couple of years ago as too few warrants left to invest in. It ended up doubling but had done far better at one stage before mix of too few warrants left and a few iffy decisions knocked performance. Now running an Investment Trust portfolio there instead and that can include the odd subscription share but not warrants as every holding must be ISA eligible. It's up around 35% and f25% annualised so far, and includes UEMS with first stake bought at 20p and a further buy yesterday at 35p.

Warrants/sub shares are often a big win for the investor and also for the issuer as long as they finish in the money. The Investment Trusts get £millions more to invest when the warrants/subs are exercised. It doesn't matter how far in the money they end up. As long as they get exercised the Trust wins. Also the costs of issuing new warrants/sub shares are very low compared with a rights issue. Often costs are around £200.000 which is small beer for most Investment Trusts and yet huge reward if they finish in the money.

Yes, subscription shares and warrants were often issued as a sweetener, usually on a 1 for 5 basis with new Investment Trust issues. When there is a bonus sub share issue to existing investors as happened with UEM, then really it is like a disguised rights issue. BUT the negative effect of the warrants being exercised on NAV is usually small.

btw both Geiger Counter and Golden Prospect are hoping to issue bonus subscription shares soon and on a 1 for 2 basis for existing investors. There has been a delay as they say there is now more red tape than when they last issued them.

[killing_time] 16/8/2017 19:27

kenmitch, thanks for the response.

[jonwig] 16/8/2017 18:40

kenmitch - I respect your experience with these instruments: from memory you wrote a lot on the Michael Walters site some years ago, when I was a subscriber.

My recollection is that a lot of warrants were issued in the past as sweeteners when new investment trusts were launched. (Investors didn't fancy paying 100p for 98p of assets.) Nowadays trusts seem to get off the ground without the incentive.

Maybe fashion, like split capital trusts, etc?

In a sense you could argue that if a warrant was good for the investor, it was not good for the issuer, but I'm unsure of my ground there.