ACTIVIST LIC’s

I wrote a couple of months back about an activist LIC in GVF was a good opportunity at the time with the discount to NTA over 10% and I note with interest already today the discount has closed completely. I think investors like the fact it gives them non AUD exposure, this has assisted their numbers greatly since listing. They also probably appreciate it offers a different investing style, it can have some comparison with 2 other LICs mentioned below.

Two other activist LICs that also started around the same time may be a little underappreciated lately in TOP & SNC. Note all three I have mentioned in the useful web links category on the blog as they can come up with some interesting ideas by following them. Thorney (TOP) had alerted me early to SSM as an idea that I acted on and has gone from 26 cents to 87 cents for me. TOP had a fantastic month in July by my reckoning and in the past has traded at substantial premiums to NTA. They run a concentrated portfolio so one should examine it closely, personally I like the look of it. SSM feature prominently which I own and am comfortable with and MNY is a big stake for them, a company I was close to buying recently. Funnily enough right now their performance is as good as ever, yet the shares recently have probably been at a discount of greater than 10% if I am correct on their July performance.

Sandon Capital (SNC) is at a much greater discount possibly up to 17% of late. Here though they have not had the portfolio success with their picks like TOP. I believe that will change. I recommend going to their website and looking at some of their research pieces on BSL, TTS & FWD of which I expect you will be impressed. Gabriel Radzyminski is also involved in the successful MVT. He has remarked they are not short of investable ideas so I wouldn’t rule out some way they either merge down the track, or each are able to tap some sophisticated investor demand to increase the scale of both. The smaller size of SNC holds the share price back I believe. The other weakness of TOP & SNC are the high management costs. In my opinion they will be justified longer term. One should note the performance of Sandon’s unlisted fund is very solid and very steady, rather than solely look at their more recent record as a LIC.

TOP at a discount of above ten percent and SNC at above fifteen percent where I have seen both very recently are ok entry levels for those seeking a fund manager with a bit of difference. Recently I have acquired small amounts of TOP at 59.5 and SNC at 83.5.

 

Advertisements

5 thoughts on “ACTIVIST LIC’s”

  1. Last try – wanted to drop a quick note to let you know I really enjoy your posts. I own both SNC and GVF PA and think there is some sort of irony given then trading at discounts…

    Like

    1. Thanks, I think WordPress makes me approve comments first by default, so it can be confusing to see if it got posted correctly or not.

      Yes the irony is certainly not lost on me. I think recently when I acquired GVF at $1 and a 10% discount to NTA that I was trying to make a similar point. They will look a bit silly if the discounts get too wide in their own shares given their strategies and that can help limit the downside.

      Your comment today is also topical in terms of the SNC announcement today. Sandon making a big effort to pass on large franking credits available to shareholders. One day I am sure they will be arguing a target company needs to do the same so they need to be acting in shareholders interests themselves. With their biggest holding AIK having a great August we may have seen the lows in the SNC price a month or two ago.

      Like

  2. I really enjoy your posts because I dont have the depth of understanding you have. But I am picking up new ideas. Thanks for your effort and please keep itup.

    Like

    1. Hi James,

      Thanks and I certainly appreciate the encouragement. I may slow down a bit soon from the last few months large number of posts because of other things I am spending time on but will continue blogging next year again. I will be moving away from sharing virtually every trade which I almost did this year. I do still want to share many good value investments though as long as I can find some next year! So overall the blog should look similar I think.

      Cheers
      Steve.

      Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s