LIC & LIT Listed Investment Companies - Fundamental Analysis

Thanks mate,

You're a champion putting in all this effort and sharing with us.

Not sure I'd agree with PMC frequently trading around NTA. It has historically tended to trade at a noticeable premium. The dividend being one of the main reasons given it's an international LIC.

Pretty much nails it in my view with the above conclusion. Although it has in part some absolute return attributes. So that needs to be taken into account rather than viewing it as a full on capital growth play.

I also look at PMC as one of the best ways to get some Asian exposure without going the full hog with a dedicated Asian LIC which doesn't appeal to me.

There's no guarantees in the world of stocks but my long term experience with this one has me optimistic patience will be rewarded.

As for what I'd ideally like to get it for particularly given we already hold a decent stake in it is in the mid $1.20's. Very optimistic but who knows the US is overdue for a correction and perhaps with PMC already out of favour anything is possible. I'd love for them to cut / suspend their dividend. This has offered excellent buying in the past when it occurred. That said I don't think I could resist starting to nibble if PMC dips into the $1.30's.

 

I took that directly from th annual reports. They made a point of listing the NTA vs SP for a few years and there was nothing in it. Admittedly it was always on the one day of each year (June 30) and there are another 250 working days in the year.

 

Just added the analysis for ARG.

We have seen better

LIC Fundamental Analysis

 

Just added TGG.

Pleasantly surprised.

The result adversely affected by disproportionately high fees. Currently priced at a significant discount to NTA .

LIC Fundamental Analysis

 

When preparing the analysis of TGG it occurred to me that there may be some good value in TGG which does not show up in the raw numbers.
- In 2012 the directors wrote off a tax credit of over $10M but recognised it again in 2013. The result being the performance is not as volatile as indicated.
- Early performance was adversely impacted by disproportionately high expenses because it was then a relatively small LIC.
- The directors have renegotiated the investment management fee (now there is no performance clip) which should result in an overall fee reduction of 25%+. The fee is now 1.2% of NTA, which for an international investment is not unreasonable.
- It is selling at a discount factor of 0.89 to last months NTA, and usually trades around it's NTA.

A guy called Wilson bought into this LIC recently.

IMHO worth a considered second look.

 

I must admit that I haven't been following TGG that closely for awhile as it's longer term history is not that spectacular. But without initially having looked at your data I was surprised with your first post stating the disproportionately high fees. Since around 2013 TGG has been working on progressively reducing their fees. Compared to other International LICs it's fees are quite reasonable.

Actually a number of changes were introduced in 2013. An important one being their commitment to the distribution policy of paying a minimum 3% of NTA. The following Chairman's Address in 2013 details these important changes. Take note of how the minimum 3% distribution might be met in more difficult circumstances :

http://www.asx.com.au/asxpdf/20131016/pdf/42k1x8pcl1by47.pdf

Having Wilson on the register will no doubt encourage them to do whatever possible to reduce the discount. Trouble is one never knows what Wilson's motives are.

But the last few years suggest that TGG is doing the right things to improve its future propects.

 

Just posted an update to AFI due to an error in unrealised losses. Thanks for @austing for picking this up.

If you have an interest in AFI please read because the change has had a material impact on the result

 

Hi jhmtaylor,

I was a buyer of some TGG today so guess I have already made up my mind and agree with your points made in writing here on this site. I was curious to see the analysis on the link of yours but I am getting a permission denied error. If you happen to know what the error might be about let me know. Is there some extra work on a blog of yours I could take a look at in regards to TGG?

thanks

 

I too am getting a permission denied error when I attempt to view the blog.

 

I have taken the blog private. If anyone wants access to view the blog send your email address to jhmtaylor at gmail dot com .

 

Thanks for giving the access to the blog @jhmtaylor

- What are the values in blue? Updates?
- The formatting of AFI looks like it is very narrow.
- I don't see ARG in your portfolio. Is it because of the recent negative "Information Ratio"?
- Why is MLT on your watchlist for negative outlook? Similar reason?

Thanks again.

 

@jhmtaylor where are you?

L-plates question, since at this point, I don't know how to interpret financial statements well.
Where does it indicate whether what sort of leveraging is happening? Eg. Been reading up on babcock and brown ,and want to avoid buying into LICs which are highly leveraged. I am even unsure whether babcock and brown is classified as an LIC?

Thanks!

 

Look at the balance sheet, in particular the long-term liabilities. Similar to LVR for property, you can work out the debt-gearing by dividing this long term liabilities amount by the sum of the equity (also listed in the balance sheet) and long term liabilities.

 

Just to make sure I understand correctly, I looked up BKI consolidated statement as of 30 June 2016 - page 24

Simple calculation
i used, total non-current liabilities = 58,327,000
div total equity = 879,960,000
= 0.06628



Thanks!

 

Yes that's pretty much it. Only thing is if you want the lvr equivalent it should be ltl divided by equity AND ltl.

In any case, as you can see the gearing is very low.

 

Also I should add, the non current liabilities here aren't really debt but tax deferred liabilities. So bki really has next to no gearing on it's assets.

 

Hi @jhmtaylor, I am a noob. I have been on and off the forum and have been reading @austing / @Falcon posts every now and then. Thank you for sharing your knowledge. I have bought some BKI, WHF, QVE and MIR. I would like to increase my holdings if I have extra cash. I am investing for income as I don't work much
I would like to view your analysis but for some reasons I cannot see it. Would you be able to help?
Thank you all.

 

Serah,
PM me your details and I will give you access, but don't hurry. I am going away on holidays for 4 weeks and two weeks after that we will be seeing the first of the 2017 results. The 2016 results are truly now, obsolete.

 

Thanks @jhmtaylor. I will PM my details. I need to find out how first
Enjoy your holdiays!!!

 

Go to inbox at top and start conversation with him requesting access.