Woodford Patient Capital Share Discussion Threads

[researchanalystman] 27/11/2018 11:39

See previous post - (and to mention before someone else does.)As at the period end, of the unquoted holdings 0 per cent is valued using the process explained in (i) above and the remaining60 per cent is valued using the valuation technique described in (ii) above.----(Valuations of non quoted have been discussed previously and imho although they judgement its necessary to have them.As such always please be aware of the risks. But that is what WPCT is about... Taking risks but on a large spread of companies not just one.

[researchanalystman] 27/11/2018 11:27

Mad and jonwigJonwig - Misinformation again (i'm afraid )you said.. "BVCA guidelines are nowhere mentioned .......which implies that they are not taking account of them..." !! and also.. and there is no evidence...Please don't be so sloppy and I also get fed up having to do your research for you.Evidence ; (which is so easy to find...)"Unquoted investments are a significant accounting judgement which is stated at fair value by the Directors in accordance with Amendments to FRS 102: Fair value hierarchy disclosure, which are consistent with the International Private Equity and Venture Capital Valuation ('IPEVCV') guidelines:For your information- "The following associations endorsed the IPEV Valuation Guidelines as of 23 June 2017.- (Amongst 30+ other international organisations) BVCA - British Private Equity and Venture Capital Association.- ==============Mad - hope this helps ;This is the actual investments and a breakdown of their valuation.Investments at june 2018 Level 1Quoted investments. 163,589 Level 2Investments at fair value through profit or loss. 123,574 Level 3Investments at fair value through profit or loss. 620,624(Unaudited) 30 June 2018 £'000 Total. £907,787 All investments are held at the price of a recent investment for an appropriate period where there is considered to have been no change in fair value, which accounts for 40 per cent of the value. Where such a basis is no longer considered appropriate, the following factors will be considered: (i) Where a value is indicated by a material arms-length transaction by an independent third party in the shares of a company, this value will be used. (ii) In the absence of (i), and depending upon both the subsequent trading performance and investment structure of an investee company, the valuation basis will usually move to an earnings multiple basis or, if appropriate, other valuation methods may be used. The shares may be valued by applying a suitable price-earnings ratio to that company's historic, current or forecast post-tax earnings before interest and amortisation (the ratio used being based on a comparable sector but the resulting value being adjusted to reflect points of difference identified by the Investment Adviser compared to the sector including, inter alia, a lack of marketability).Where an earnings multiple basis is not appropriate and overriding factors apply, discounted cash flow or net asset valuation bases may be applied. As at the period end, of the unquoted holdings 0 per cent is valued using the process explained in (i) above and the remaining60 per cent is valued using the valuation technique described in (ii) above. For financial reporting purposes, fair value measurements are categorised into a fair value hierarchy based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurements in its entirety, which are described as follows: Level 1 – the unadjusted quoted price in an active market for identical assets or liabilities that the entity can access at the measurement date. Level 2 – inputs other than quoted prices included within Level 1 that are observable (i.e. developed using market data) for the asset or liability, either directly or indirectly. Level 3 – inputs are unobservable (i.e. for which market data is unavailable) for the asset or liability.Not difficult. to find. - ( 1/2 year interim june 2018)

[jonwig] 27/11/2018 09:29

mad - there is a difficulty here. Private Equity, VCTs, EISs have a strict code of valuation set out in their guidelines:



Whereas ram has described these valuation methods (with a built-in bias to WPCT), there is no evidence that WPCT actually employs them. On p18 of the prospectus, it says:

The Company’s investments in unquoted securities will be valued in accordance with the valuation policy adopted by the Board from time to time. Such valuations may be conducted on an infrequent basis, are subject to a range of uncertainties and will involve the Portfolio Manager exercising judgement.

BVCA guidelines are nowhere mentioned, nor is the word 'prudent' which is the usual term adopted where judgment has to be applied. It's also the case that some of the holdings (Industrial Heat series) are hidden behind a brick wall, with no opportunity for independent verification.
__________________________________________

That said, I think Stifel probably has a point: if the dross has gone, what's left may be purer stuff.

[researchanalystman] 27/11/2018 08:49

They are revalued according to the price of new share investments when they happen as embryonic companies progress and meet targets and get more capital to extend progress on their plans.Benevolent ai is an example- Still private . In April 2018, it received $115m in additional funding from new and existing investors, to hire more people and expand its focus to new diseases. This new investment now values the business at just over $2bn.One company which developed was autolus which had an ipo this year at $15-$17 quote but had raised money at lower prices so had a gain from original and secondary share raisings on ipo price. It also then soared after the ipo to the current $40 but you take your own view as to whether thats 1. Short term hype and stock shortage 2. Justified on likely having achieved something great or 3, speculative and will not succeed and crash and fall in 2/3 years time.Both are large wpct holdings -8/10 percent ish at current prices/valuations

[mad foetus] 27/11/2018 07:42

Stifel have issued a note rating WPCT a speculative buy. They rated it a sell at launch as they didn't like the premium, but say the discount now, plus the 80% in unquoted that must be starting to reach maturity make it attractive. I have no position but am going to dig deeper.Can someone help me with valuation: are the unquoted investments valued at par until they are floated (thus giving a big uplift) or are they revalued before then? Thanks.

[ltcm1] 26/11/2018 12:31

Xeros - 300p to 30 in a year. All washed up???

[chuckol] 26/11/2018 12:28

Thank you, thank you, daffywinnikins, you did a nice little morning poo for mummy and got the share price up. And afterwards another nice little name for my little psychobunny.

[daffyjones] 26/11/2018 05:04

Jeez topvest. That really is a shocker. He chucked more money at RM2 in March on condition that they meet certain Key Performance Indicators. They failed miserably at achieving them. Yet now he is giving them more money, just to keep them afloat. Note the RNS states that if the new placing is unsuccessful, they will have to liquidate the company.

Woody should have pulled the plug a long time ago. Now as the bagholder he is left with owning 2/3 of a completely useless company.

He just doesn't understand technology. The 'smart pallet' concept was never going to fly. Such hubris for him to assume he knows more than the market.

[ltcm1] 25/11/2018 19:48

I can see why he did this though, the amount is relatively small and he does hold 68% of the shares.

Perhaps RM2 is the new Ocado???

Wonder what he will do with Zeros and Alm???

Good luck Mr Woodford, least he is having a go!

[topvest] 25/11/2018 18:53

Another example of throwing in more good money, after bad.....when Woodford really should be admitting he got it wrong....



Doubling up on your big losers is really not the right thing to be doing when you are low on cash. Presumably funded through the sale of something good (like Hostelworld).

[saltraider] 25/11/2018 14:03

Let's face it Winnifroth, a man like you is only going to get solitary pleasures.

Pandora knows btw ... ever since you took that photo of her at the beach. On every rare occasion you open your wallet, you can see the sticky print in that window where a person who actually had a business would normally keep his business card.

... oh and every one who follows her on Snapchat knows as well.

[truthteller3] 25/11/2018 13:21

What was that garbled nonsense from jonwig about the shareprophets' paywall? I didn't understand it at all unless it was a desperate plea from him for people here to subscribe? Some hopes, EH?

[1tcm1] 24/11/2018 20:37

I don't know what the fuss is about. A man like me needs his solitary pleasures. It's OK if I don't enjoy it, anyway.

Trollwatch you were damn quick to suss out the jonwig connection eventually, fair play. He does try to help me out from time to time by praising the shareprophets, bedraggled as they may be.

[solonic] 24/11/2018 18:11

Up he pops again, Tommy-Jack in the Box.

[topvest] 24/11/2018 17:58

Daffyjones - a good post. Just shows how they have slipped into doing what they weren’t supposed to do.....out of desperation or over-confidence. Unfortunately, I think the valuation here will slip close to zero in a bear market. Using debt when investing in highly illiquid loss making investments that need continued funding is absolutely stupid. When the tide goes out you find out who has been swimming without any trunks!

[trollwatch] 24/11/2018 17:09

Where has the sanctimonious jonwig disappeared to? Back into that smelly little hole where he's been cowering most of the time! LOL LOL LOL LOL.

[chuckol] 24/11/2018 17:05

No stopping him, is there?

That last post obviously designed to bring the share price down on Monday.

Probably won't work because it was all about piffling matters that no sophisticated investor cares a hoot about.

[daffyjones] 24/11/2018 16:46

Henchard, while I think you are just being mischievous, I'll take the bait.

Yes the prospectus stated WPCT would be invested 25% in Mid/Large cap, 25% in Early Growth, and 50% in Early Stage companies. The actual breakdown as of end of last year (when Woody stopped publishing the figures) was just 7% mid/large cap, 31% early growth and a whopping 60% in pre-revenue early stage companies.

The prospectus stated investment in unquoted companies would be limited to 60% of NAV. The figure as of the last interim report was 85% of NAV.

The prospectus stated that long term gearing would not be used. WPCT has been geared to the gills for over a year now.

The original top ten WPCT holdings included Prothena, Vernalis, Circassia, Northwest Bio, Allied Minds. Almost all of these have crashed to near worthless levels.

It's a completely different beast to that which was touted three years ago. Shame the bagholders can't see it. Maybe one day they will break even on their investment.