thirty fifty twenty
07 Jun 2016
WOW! at 158p NAV is 243p Per previous posts I was expecting NAV to be >235p,243p is a fantastic result - underlying equity valuations growing at > 20%,and after July share price will be supported by c.70p of CASH.So adjusting for CASH the investment portfolio is at a discount of almost 50%!!!Simon Thompson will defo pick up on this and I think set a price target of closer to 200p.For me an overall discount of 25% is a minimum so today that gives fair value of 182p,but would expect another 10% NAV growth over the next 12 months so 200p likely,which represents >25% growth including divi (share price backed with 40% CASH!)I wonder any chance of a CASH return when they get loan repaid in July?All IMHO, DYOR + BoLBPM is in my top5 hldgs
II Editor
03 Jun 2016
NEW ARTICLE: The week ahead: J Sainsbury, BP Marsh "Monday 6 JuneBRC Retail Sales Monitor (Annual)Trading StatementsTCS GroupAGM/EGMTrendit, React Group, Global Energy DevelopmentTuesday 7 JuneAIM-listed financial services investor LSE:BPM:B.P. Marsh & Partners will announce final results on ..."[link]
thirty fifty twenty
05 May 2016
analysis of recent RNS I think the recent disposal of RQIH is a very good signal for the following reasons:1. it is converting a volatile and illiquid asset into CASH2. the disposal price is ahead of book value thus adds (very modestly to NAV)3. the fact that it is BP Marsh himself that is buying the shares is good news.....Why did he buy and BPM not just sell into the market? I doubt if RQIH will continue to surge in price as this would be very embarrassing for him personally. If there was no buyer in the market for 1% of RQIH then similarly we have done well as BPM shareholders. Thus I conclude that he paid a fair price for something he believes that over time will be a good investment.4. So why sell at all? Well as is stated in the RNS it is because it is 'non-core'. To me the important aspect of this sentence is that 'they care'. They care how the group is perceived (remember Mr Marsh and directors owns >70%) which is an indication I think that they care about the discount, believe it is unwarranted and are taking action to reduce it. it is quite significant that Mr Marsh has spent well over £1m of his own money to increase his effectively holding in RQIH from 0.6% to 1% - why do it? I can only come to the conclusion that its because it will add value to his 60%+ shareholding in BPM.5. Overall, this indicates to me that the NAV at results will be good and there might be some surprise announcements over the remainder of the year that will give the share price a decent nudge upwards. They have still not spent any money on buying back shares. Time we tell.....All IMHO, DYOR + BoLBPM is in my top5 hldgs
thirty fifty twenty
09 Feb 2016
at 152p NAV = c.235p My analysis of RNS this morning indicates NAV could increase by 20p! – but given my ‘holder bias’ I’ll stick with a 10p increase to 235p with the finals on 7th June. That would be a 9% increase since LY.Besso c/be worth 18m + 4mLLBC c/be worth 10.5m + 2mSumma doing wellSth Africa doing well and surely worth more than 0.1m combined£7.3m of CASH expected from Hyperion in July.They say they have a strong pipeline to invest in so CASH will increase in value in time as well. all in all reason to reduce the discount in timehelped with the continued small but regular buy backs and of course there is a great chart break out pattern confirming the fundamentals All IMHO, DYOR + BoL BPM is 1 of my top5 hldgs
TX2
09 Feb 2016
Trading Update Seems satisfactory;obviously it is difficult for outside shareholders to judge the performance & attributed valuation of essentially investments in private companies;but to date the company has delivered and its management has a big capital stake in its continued success.The dividend policy makes the shares more attractive to hold and has contributed to their improved valuation.
thirty fifty twenty
05 Feb 2016
spread is actually 1.5p Interesting the spread is quoted at 5p (148p to 155p) but you can get 1.5p spread on Spread Betting accounts which includes their the SB mark-up - so I think liquidity is better than might initial seem.
thirty fifty twenty
05 Feb 2016
at 150p - 60p CASH + 35% discount BPM share price has held up very well I the recent market downturn... see the relative chart on the 3 year view..the price above 146p is at an All Time High and string relative to the market this is a classic positive sign and can be lucrative to ride the momentum...BPM has achieved 11.5% p.a. over 25 years,and c.7% p.a. over 10 years,it has outperformed peers and benchmark indices.In Sept 12 the board decided to take action re the discount which at the time was 48%With dividends, buy backs and promotions,the price rose rapidly to 140p and the discount narrowed to 20%.Since then the price has barely rise yet the NAV has risen c.20% such that the discount is 35%.the board again are publicly stating they think the discount is too large and have been buying some shares...... so I expect the discount will again narrow to c.205 over the coming 12 months.I model only 6% annual NAV growth which gives NAV of 240p by mid 2017 which at a 205 discount give a share price of 190p + dividends.....the shares are tightly held but this make it even more attractive so small interest will cause a re-rating and its obvious there are no sellers around at current levels, the company is only able to mop up 10k of share at a time, and now the chart has broken out it will attract momentum and technical traders.......I expect positive news with the next results.One issue of concern might be the age of the BP himself at 74p ... I've calculated that even on a distressed basis the assets would get 190p realised in total over 18mths but front weighted CASH repayments sooner given the high CASH balances.if my chance he sells the business then there is the additional benefit that the 4.4m provision for CGT would not be needed by new ongoing trust. This gives a further 15p of safety net!Little downside, decent upside, evidenced by share price trends...All IMHO, DYOR + BoLBPM is in my top 5 hldgs
thirty fifty twenty
07 Dec 2015
decent further investment in Nexus good news to see a further 1.5m going into Nexus.on a general basis I prefer to see their investment going into known growth businesses,so to be this is a good use of CASH,and improves the 'quality' of the Net Assets.Nexus using the money for acquisition which is classic BPM support territory,Nexus seems to be growing (with 2 acquisitions in 2015) into a more significant business with BPM providing nurturing and funding as it did with Hyperion. Not saying that Nexus will deliver the same returns as Hyperion, but BPM obviously have great track record and experience and they have long said that Nexus has great potential which I think translates to the fact that there is a market opportunity and a mgt team at Nexus that they value.a little disappointing to see some of the mgt at Nexus take money off the table so will be interesting to see at what levels for which individuals etc.... when full details of the acquisition announced.all in all reason to reduce the discount in timeand of course there is a great chart break out pattern confirming the fundamentalsAll IMHO, DYOR + BoLBPM is in my portfolio
TX2
03 Nov 2015
Re: at 150p - 1m traded I assume the larger trades were agreed ones as I doubt market makers would have/or would want to take that many shares on their books.I retain my holding which I have had some years.
thirty fifty twenty
03 Nov 2015
at 150p - 1m traded 1m traded and the price had held firm / risen slightly -that seems like good news to me and quite possibly the company buying back shares,but regardless it is a great show of confidence with NAV at 225p.All IMHO, DYOR + BoLBPM is in my portfolio
Tom WM
14 Sep 2015
Re: analysis at 144p Thanks for your reply TFT which clarifies the position for me. I am inclined to agree your anticipated growth rate of 6% for the next couple of years as there are now many unknown factors here.So I would love it if they could keep the HYP stake beyond the option date but I think that's just wishful thinking. I have been here since March 2012, having watched it closely since it floated. My average purchase price was 89.8p so I showing a very acceptable 50% gain.With the proposed increased dividend my yield is about 3% which, again, is good news.Of the new investments it is Nexus that excites me. That one has reat growth prospects.
thirty fifty twenty
14 Sep 2015
Re: analysis at 144p Hi Tomits not correct to add the two %.My analysis shows that the initial money invested into HYP has grown at 17% p.a.the money invested in a wide portfolio of assets is only 9% p.a.My logic is that the mgt team are more likely to replicate the wide portfolio return than find another HYP. Beside it is conservative assumption.And if take the last 10 years the return is only 6% p.a.So, for me, although the company is happy to boast of its long term record of 11.3% p.a., in my opinion this is heavily impacted by the 'early years' and also the 'one-off' success of HYP.Thus in my modelling I think that 6% p.a. is a conservative ongoing assumption.There is also a risk that the current NAV is 'over-inflated'. The valuation range that auditors find acceptable is c.15%-20%.Then my analysis tries to say what is BPM worth breaks into 3 strands,1. The current NAV is not at all over-valued but is underpinned by a high proportion being CASH, and like you say future CASH with HYP loan repayment and equity realisation. And also underpinned byt eh fact that valuations on its 2 biggest investments can be substantiated by my own independent analysis of known public information.2. How much will those asset grow by - i'm using 6% as I think the most recent 10 years is a better proxy than 25 years. Warren buffet has an incredible lifetime % return - but over the last 5 and 10 years he has under performed the market - no surprise or criticism given the size of his portfolio but a conservative assumption would use the more recent performance figures than a 'life time' % return.3. Lastly what discount should be used - 20% is the historic norm and I agree that argument can be easily made for it to be lower but I'd rather use a conservative estimate and see if there is value.So all in all, for me, the 3 strands indicate that 185p would be a reasonable price in 2 years time. This is 36% return over 2 years (including divi). That seems like great value to me though the upside is limited.Hope that is clearer and answers your queries.Best wishes TTFAll IMHO, DYOR + BoLBPM is in my portfolio
Tom WM
13 Sep 2015
Re: analysis at 144p You have clearly put some work into this but there are a couple of points I can't understand.You say that HYP growth is 17% and the rest is 9%. That totals 26% or am I missing something here?You also need to take into account that the sale of most of the Hyp stake changed the whole company in that a major revenue producing asset was converted into cash at a time of record low interest rates.Investing that money will take some time although a good start has been made and some of the cash has been loaned at attractive rates. The company is still in transformation and this will take time. so it's unrealistic to compare I now with the past 10 years or so.The question that should be addressed is whether we have confidence in the board to use that cash wisely. ( Incidentally there could be a further cash influx of c£7m when the option to sell the remaining HYP holding either lapses or is called.)Personally I am very happy to retain my holding.
thirty fifty twenty
10 Sep 2015
analysis at 144p interesting that ST of the ic re-iterated his buy advice at 144p - he has a target of 180p.I decided to do my own analysis.it is widely quoted that BPM has a 11% compound growth over 25years.when I analysed how much was due to the 'one-off' of HYPERION,it showed that HYP had delivered c.17% p.a.,and the remaining portfolio had delivered c.9%also I wanted to look at the last 10 years as this is equally relevant.NAV growth then is c.6% p.a. so maybe the magic touch is slowing down?regardless, for me, the relevant fact is that it is still outperforming the general market.DISCOUNT - the average discount over the last 10 years is c.19%however this is influenced by the period in 2007 when it was trading at only 10% discount.I think it is reasonable to assume a 25% discount is 'the norm'.though admin expenses as a % of the portfolio size has reduced in recent years.also interestingly at the moment is the fact that BPM has a higher proportion of loans and CASH assets than normal which gives more support to the NAV.Biggest equity investments are LEBC + BESSO.LEBC is in a growth market, and compared to valuations of MTW, IFP + LGT it is conservatively valued in the NAVBESSO is also conservatively valued compared to recent deals.So this means that:> 20% of NAV is in CASH > 25% of NAV is conservatively valued compared to know public information.To me this supports if anything a lower discount than the 10 year average of 20%.My conclusion.....NAV will 'only' grow at 6% for 2015 and 2016 to then be 245p;the discount to NAV will revert to norm (25%) and thus generate a share price of 185p.So that is 36% return over 20 months including divis,and downside is very limited given the asset backing and CASH levels.I am holding as a BTC (Better Than CASH) investment, intending to then flip into something 'more exciting' when the market bottoms.ALl IMHO, DYOR + BoLBPM is in my portofolio
nk1999
03 Jun 2015
IC Simon Thompson "Aim-traded insurance sector investment company BP Marsh & Partners (BPM:150p) has announced yet another rise in its book value per share, extending its impressive track record. In the past 25 years, the company has grown its net assets at a compound annual growth rate of 11.3 per cent and this important measure of shareholder value increased by a further 14p to an all-time high of 216p a share in the 12 months to end January 2015............"
