In the dark yet again
21 Apr 2015
Re: Bank of Eng spin off OK, sort of see whee you're coming from but a few points.Dividend yield: the most recent dividends were 5.4p final and 2.7p interim, i.e. about 1.6% on a £5 share price. They were accompanied with a special dividend of 7.9p and 3.3p which would would take us up to about 3.9% net which is still only 4.3% gross (not sure who actually counts it gross other than a company's PR people). That aside, when is a special dividend not special? In this case 3i state that they are returning to shareholder realised investments meaning there's a certain amount of self-cannibalisation going on - yeah, they are returning cash but through selling investments, therefore the remainder is smaller going forward. Then again, with 3i, that is their business and they have stated that they will continue to do so. Aside, the core dividend to which the board is committed ongoing is only 8.1p, anymore depends upon when and if so you shouldn't count on it as regular income.Discount/NAV: always a difficult one with 3i. The last official count was the finals of last year, 14th May 2014 and a lot has happened in the meantime, not least of which being the market finally reaching new highs after 15 years (31/12/99 6930). Unlike 'normal' investment trusts 3i don't revalue their assets on a daily basis, indeed even the annual 'valuation' is highly dubious (conservative, low count) as many assets will be kept on the books at original cost - let's face it, 3i aren't investing for zero return which is what original cost price on the books implies. Me, I'm not reading too much into the current discount or where it is relative to historical trends as with, the FTSE100, 250, All Share (in fact just about every index you can think of) trading at new highs all the time, who knows what fair value on 3i's book actually is - maybe they do and maybe they'll tell us May 14th but even then it will still have lots of assets at original book cost.As for an 'old SP of £7', well it's a nonsense number given the changes in the meantime. 2007 it was over £11 so why no use that number (14/02/07 my deal ticket says sell 556 @ 1123).....but then there waa massively dilutive rights issue June 2009. It was 9 for 7 at 135. The arithmetic is simple. Say you had 7 worth £3, your share of the company is worth £21. You take up your rights, pay 9*135 = £12.15. Now you have 16 shares in a company where you share is worth £33.15 (less a few expenses since Investment Bankers don't wok for free) i.e. those shares should be worth 207p ish - the value of your investment hasn't fallen by 1/3rd overnight but the SP has and comparing before and after is useless unless you can adjust appropriately (which almost no charts do)........... why not look at RBS and say it was over £25 at one point, ignoring the 3 for 1 share split, massive rights issues, near bankruptcy, a 1 for 10 consolidation - there were 2.5bn shares, now there are over 11bn (count the Bs as they are very, very real) so not really comparing like with like. My point? Just be very, very careful when looking at historical share prices and make sure you know/adjust for what's happened in the meantime.So £5 doesn't sound outrageous to me - I might argue it feels a little toppy given the general circumstances all around. As for £30 in a few years, well whatever it is you're smoking it's clearly top quality gear.Regards,ITDYA
albent
08 Apr 2015
III valuation 3i Group (III): [link] infographic has some good data.
thechinaman
23 Mar 2015
Breakthrough! Well, it's taken its time but finally broached the £5 resistance level. I suspect with the QE in europe, and the aggressive asset realisation strategy of the new(ish) regime at 3i, this is heading back to its old £7 sp - I'd say by mid-June 2016. Would then be a reasonable and fair PE rather than the paltry one currently .... and still some substantial divis to come! All IMHO, of course!; )
daverob82
05 Mar 2015
Re: Bank of Eng spin off Interesting citytrade....what do you think about the current SP premium over NAV which is extraordinarily high (+34%)? Certainly in the mid-to long term it could justifiable but do you think there'll be shorter term correction to bring it back closer to historical levels (+13%)?I'm long but considering taking some profit.DR
citytrade
05 Mar 2015
Bank of Eng spin off 3i was spun out of the BoE in 1945.I dunno about a 3 months play- couldn't advise you, but long term it looks like a brilliant investment capital growth + 5% div.BTW historically director buys on the FTSE have a 1/3billion relevance to sp (David Hand RSS) ie no relevance at all on average! Against that individual companies/people have to be profiled.Long term great IMO and it doesn't matter which industry rises or falls.World economy has been depressed for 6 years and will rise with markets being worth 5 times what they are now in 10 years. I'm contrarian on this...most analysts have been screaming there's a bear coming. I dont think so because of tech infrastructure being pushed esp by machine intelligence, however scalps will be taken.I took the liberty of visiting 3i's main office before sizing them up. They have less than 300 people world wide for huge revenues. That could backfire of course, but it's also slim with fewer salaries to pay out. Crowdfunding is OK competition but 3i brings essential experience an networking. 'A load of dosh and no directions' wont always work for developing companies compare that to experience: eg Sir Victor Blank knew how to move Lloyds to gobble up HBOS in the depths of the depression when everyone else was down sizing....breathtaking.3i No brainer to me. and £30 a share in a few years as the sluggish economies get powered up is more than likely.DYORGLA
OilGuru
05 Jan 2015
Re: Chief Exec buys half a million shares Merlin & AdamBeing an oil stock specialist without a clue about industrials - want to thank you for info re CEO buying iii shares = bullish. While the fundamentals have been good recently -I bought purely on chart analysis when in early October NAV & share price intersected at 365p (then sweated while it dipped to 352 before picking up) whereas in the recent past the NAV has acted as a support level. While iii has great fundamentals - even at 5% div yield stubbornly refuses to reach anything over 7-8 PE Ratio - oscillating between 440 and 455p (459 high) - whereas there are less distinguished companies with less EPS growth, worse Price/Book value ratios but trading a PE 20+. GRRRR. It seems that max differential between NAV & share price was 88p in the past but now reached 98p and refuses to break through 455-9p. Mr Buffet says - err sit tight fo10 years - yeah but sitting here just oscillating is tying up my capital when there may be faster growth to be bought out there. I plan to sell next time 455p resistance level is reached. What do you guys feel about iii near term 3month behaviour?Nick Caka OilGuru
Merlindale
05 Dec 2014
Re: Chief Exec buys half a million shares This is as good a reason as any to hang on to these in spite of the shares trading at a high and at a premium to stated net assets - my guess is that the next updated NAV is going to show a significant uplift with maybe another 'special' div on the way
