Category: Uncategorized (Page 225 of 342)

The Results Round-Up –
Which investment company has grown its NAV per share by +891% over the last 15 years? And what gets Monks’ investment managers excited?

By
Frank Buhagiar
05 Jul

Monks’ (MNKS) Investment Managers Reveal What Gets Them Excited
MNKS’ NAV total return came in at +17.6% for the full year while the share price total return matched the FTSE World Index’s +19.1% exactly. On the one hand, Chairman, KS Sternberg, is encouraged by the return to positive relative performance after the last two years’ declines but on the other ‘we are well aware that on a NAV basis, this is the third year of underperformance.’ In response, the investment process has been refined with a particular focus on valuation discipline. The managers explain, however, that the core approach to managing Monks remains consistent: selecting stocks on the basis of their fundamental attractions without reference to the index; investing in a diversified portfolio of companies that can deliver superior levels of earnings growth; and allowing compounding to ‘work its magic’ by being patient.

The investment managers go on to talk about what gets them excited ‘Growth companies excite us. From AI, to gravel, to storm drains, to digital payments, Monks seeks to give shareholders exposure to the world’s leading beneficiaries of change, whatever the sector, wherever in the world.’

Numis: ‘Monks is differentiated from its stablemates: Scottish Mortgage (more concentrated plus unquoteds); Edinburgh Worldwide (smaller companies); and Scottish American (income mandate). Since the team took over management on 27 March 2015, Monks’ NAV has risen 172% (11.4% pa), slightly underperforming FTSE World Index which has returned 187% (12.0% pa).’

JPMorgan: ‘MNKS is large for an investment company with a market cap of £2.4bn and has low competitive costs (44bps) and it trades at one of the wider discounts in the AIC Global sector at 11.6% vs the average of 9.0%. In our view MNKS is one of the better global equity growth options in the sector and we remain Overweight.’

Investec: ‘We regard Monks as a core strategic holding for investors looking for a well-managed, lower-risk and low-cost exposure to Baillie Gifford’s best global growth ideas. A differentiated philosophy, strong corporate governance and a strong balance sheet represent solid foundations and Monks is well-positioned when markets broaden from historically narrow levels.’

Artemis Alpha (ATS), Showing How It Can Pay to Be Different
ATS’ NAV per share gain for the year was double that of the FTSE All-Share – up +15.1% compared to the index’s +7.5% on a total return basis. According to Chairman, Duncan Budge, ATS was able to achieve this because the portfolio bears little relationship to the FTSE All-Share and ‘the stock-selection is not constrained by it. As the last three years have shown, short-term performance is likely to bear very little resemblance to the benchmark; our aim remains to out-perform it over the long term.’ Vive la difference!

Looking ahead, Budge cites an improving macro environment and low valuations across the UK market as reasons to be optimistic. ‘Many of our investee companies stand to benefit from the improved prospects for consumer spending reinforced by clear competitive advantages’. The Chairman is also looking forward to the prospect of a more stable political environment after the election’ as this may help to improve the rating of UK companies.

Numis: ‘Artemis Alpha (ATS) has a triennial tender for 25% of share capital at a 3% discount, with the next due to take place later this year at the AGM. Within its annual results, the Board comments that the tender will be subject to the level of the discount prevailing at that time as well as shareholder approval’.

BlackRock Sustainable American Income (BRSA), Focusing on Quality
BRSA’s NAV per share return marginally outperformed the benchmark over the half year – up +15% compared to the Russell 1000 Value Index’s +14.8%. The NAV performance wasn’t far off the +17.2% clocked up by the larger-cap S&P 500 (sterling). The biggest contributor to relative performance was stock selection, particularly in the healthcare and consumer discretionary sectors. The investments managers believe the current “late cycle” economic environment in the US is ‘best suited for ‘quality’ companies, i.e. those which demonstrate consistent earnings, have strong balance sheets and have savvy management teams among other characteristics. These companies should be well positioned to manage through the economic cycle’.

Valuation discipline is important too ‘we feel valuation discipline is key given higher than average forward price-to-earnings ratios for equity markets.” As is a “focus on more secular themes which may offer more attractive investment opportunities, such as reshoring and AI/digitalisation.’ What could be called the QVT approach – Quality, Valuation, Themes.

Winterflood: ‘Share price TR +15.9% as discount narrowed slightly from 10.1% to 9.6%; 2.9m shares (3.6% of shares in issue) bought back for £5.6m. EPS -20.5% YoY to 1.59p, reflecting portfolio mix tilting to lower yielding stocks’.

Oryx International Growth (OIG) Cashed Up and Ready to Go Again
OIG reported a +12.2% increase in NAV for the full year. As Chairman, Nigel Cayzer, writes ‘When compared against the smaller companies indices, this is a good result.’ The longer-term track record is even more impressive. Over 15 years, NAV per share is up +891.0%; 10 years +211.7%; five years +76.3%; and three years +0.8%. The equivalent figures for UK small caps are +265% over 15 years; +29% for 10 years; +17% for five years; and +6% over three years. Apart from the three-year timeframe, a full house.

Back to the year under review, performance was driven by an outbreak of M&A activity among the portfolio holdings. As the investment managers write ‘Recent corporate actions will substantially increase our cash reserves, enabling us to take advantage of opportunities as they arise.’ And so, the cycle begins again.

Winterflood: ‘Share price TR -1.8% as discount widened from 19.0% to 29.1%; no shares repurchased.’

Polar Capital Global Financials (PCFT) Getting More Active
PCFT outperformed over the half year – NAV and share price total return came in at +18.2% and +23.3% respectively compared to the MSCI ACWI Financials Index’s +15.9% net total return. As the investment managers explain, the global financials sector has been a beneficiary of the higher interest rate environment, ‘the rapid rise in interest rates has been a tailwind for the banking sector’ That’s not all. ‘Equally insurance companies have benefited from the rise in interest rates and bond yields, which has boosted investment income and therefore profitability’.

With interest rates expected to start coming down (at some point), the managers believe they may have ‘to be more active than we would otherwise be in positioning the Trust’s portfolio to benefit from the sector’s tailwinds as well as navigate around some of the risks.’

Winterflood: ‘Europe allocation was the largest geographic contributor to relative performance, while India and Philippines detracted. Overweight allocation to alternative asset managers contributed. The managers remain constructive on the outlook for Financials, and note that, as the biggest spender on technology, the sector is expected to be one of the key beneficiaries of AI efficiencies.’

Numis: ‘Since the fund’s reconstruction in April 2020, PCFT has returned 112.8% on a NAV total return basis, as compared to 112.5% for the MSCI ACWI Financials. We believe the fund is an attractive holding for exposure to financials. PCFT is currently trading on a 8% discount to NAV.’

Why You Need Passive Income: Building Financial Freedom For The Future
Melissa Houston


As financial stability and independence are increasingly valued, setting up passive income streams has become a crucial goal for many. Whether you’re looking to supplement your current income, save for retirement, or achieve complete financial freedom, passive income offers benefits that can pave the way to a more secure and fulfilling future.

Let’s explore why you should prioritize building passive income and how it can transform your financial landscape:

1. Diversification and Stability
   One of the most compelling reasons to set up passive income streams is diversification. Relying solely on a salary or wages from a single job can leave you vulnerable to economic downturns, job losses, or unexpected expenses. Passive income diversifies your income sources, reducing reliance on any one source and providing stability during turbulent times. Whether through investments, royalties, or rental income, passive income can create a safety net that cushions financial setbacks.
2. Freedom and Flexibility
   Passive income empowers you with the freedom to design your lifestyle on your own terms. Unlike active income, which requires your continuous time and effort, passive income allows you to earn money while you sleep, travel, or pursue other interests. This flexibility is invaluable for achieving a better work-life balance and pursuing personal passions without sacrificing financial security.
3. Building Wealth Over Time
   Passive income has the potential to accumulate and grow exponentially over time. Whether through compound interest on investments, increasing rental income from real estate properties, or royalties from creative works, passive income compounds your earnings without requiring additional effort. By starting early and consistently reinvesting your passive income, you can accelerate wealth accumulation and achieve your financial goals faster.
4. Retirement Planning
   Planning for retirement is another compelling reason to prioritize passive income. As traditional pension plans become less common and social security benefits face uncertainty, building passive income streams ensures you have a reliable source of income in retirement. Whether you choose to retire early or continue working, passive income provides financial peace of mind and allows you to maintain your desired standard of living throughout your golden years.
5. Creating Generational Wealth
   Passive income can also play a pivotal role in creating generational wealth and leaving a lasting legacy for your loved ones. Income-generating assets such as rental properties, dividend-paying stocks, or intellectual property rights can provide ongoing financial support for future generations. By strategically planning and managing your passive income streams, you can build a foundation of wealth that benefits your family for years to come.
6. Achieving Financial Independence
   Ultimately, the goal of setting up passive income is to achieve financial independence. Whether your definition of financial independence includes early retirement, starting a new business, or simply having the freedom to pursue your passions without financial constraints, passive income is a powerful tool that can make these aspirations a reality.

The bottom line is that setting yourself up for passive income is not just about earning money; it’s about securing your financial future, gaining freedom, and creating opportunities for yourself and your loved ones. Whether you’re just starting out or looking to expand your existing income streams, the benefits of passive income are undeniable.

Start today, invest wisely, and reap the rewards of passive income for years to come.

ForbesWomen: Get the ForbesWomen newsletter, and supercharge your mission with success stories, tips and more.

Updated List

Story by Christopher Ruane

The Motley Fool
It can be exciting thinking about the possible returns of investing in the stock market. That helps explain why some people rush into it and start investing before they really understand what they are doing.

If I was going to begin investing for the first time, here are five things I would like to know.

1. Costs matter
   Some investment trusts charge an annual management fee, often a low-single-digit percentage number. Buying or selling any shares usually also attracts fees. They can also sound low on paper, again in the single-digit percentage range.

But a few percentage points here and a couple of percentage points there can soon add up. The more one trades, the sooner such costs are likely to add up.

I would begin by comparing different share-dealing accounts and Stocks and Shares ISAa to see which one looked most appropriate for my needs.

2. The future is not the past
   Past performance can be very helpful when investing. For example, knowing how a business did in the past can help me decide whether its business model looks proven and what sort of seasonality it has.

But past performance is not necessarily a guide to what comes next, even for a proven business with a long history. Fortunes have been lost by investors sinking money into fallen giants, only to see them keep on falling.

3. Chasing yield is a fool’s errand
   The dividend yield is the amount one receives each year as dividends as a percentage of the cost of the shares.

For example, Diversified Energy currently has a yield of 16%. If that is sustained, spending £100 on Diversified shares today ought to earn me £16 in dividends annually. Even at a time of high interest rates, that sort of yield grabs my attention.

But dividends are never guaranteed. A common mistake when people start investing is simply to look at yields, without understanding the business concerned. A high yield alone tells me nothing. Instead, I need to understand the business concerned and judge how able I think it will likely be to maintain its shareholder payout.

4. Diversification is simple but important
   Many people have their eye on what they think is an amazing share when they start investing. Anyone who has ever heard someone in a pub drone on about how they almost bought Amazon or Tesla shares before the companies grew huge, will have experienced this first-hand.

While some companies do well, others perform terribly. There are lots of ways to form an opinion on what is likely to happen – but there is no way to know for sure ahead of time.

By spreading my eggs over multiple baskets, I can reduce the risk to my portfolio if one share I choose later performs badly.

5. Stay calm
   Investing involves risking one’s money. The twists and turns of the stock market can seem exciting – or nerve-racking.

Investing is ultimately about making money. I think a valuable lesson when one starts investing is always to stay calm and try to avoid emotionally driven decision-making.

As legendary investor Warren Buffett says: “When forced to choose, I will not trade even a night’s sleep for the chance of extra profits.”

Here’s how I’d invest £20k in high-yield dividend shares to target £500 in monthly passive income
The Motley Fool

By Paul Summers

I don’t have the time, energy or brain power to run a second business or invent something everyone wants. So, I think the stock market is my best option for generating passive income.

Here’s what I’d do with £20,000 at my disposal.

Getting organised
My first step would be to chuck the entire amount into a Stocks and Shares ISA. Conveniently, this amount is currently the maximum I can deposit into this kind of account per year.

But the main reason for housing my investments inside an ISA is that I won’t pay tax on any income I receive. I’ll come back to this in a bit.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

Buyer beware
I now need to think about which high-yield dividend stocks might be worth buying.

Spoiler alert: not all companies that return lots of cash to their owners are great buys!

At least some offer high yields because their share prices have tanked, perhaps because trading is bad. When this happens, the yield rises.

There are exceptions
Not every high-yielding stock is necessarily a disaster in waiting.

Housebuilder Taylor Wimpey (LSE: TW.) is one I’m more comfortable about. As thing stand, analysts have the company down to return 9.31p per share in FY24. Using the current share price, that gives a dividend yield of 6.4%, making it one of the biggest payers in the entire FTSE 100.

Is this all nailed on ? Sadly, no. A fresh economic headwind could see another dip in demand for housing. This would impact the Taylor’s bottom line and possibly its ability to pay dividends.

But I’m optimistic about this UK titan.

Firstly, its balance sheet is already in great shape.

Secondly, a cut to interest rates later this summer could be the catalyst for the next housing boom.

Third, there remains a huge shortage of quality housing in the UK. As a big player, this is surely positive for the company’s long-term outlook.

So, would I invest my full £20k in Taylor Wimpey? Absolutely not. Going ‘all in’ on any stock is asking for trouble, regardless of its quality.

Instead, I’d spread my cash around other shares to reduce risk. This is known as diversification and it might just save me from a world of (financial) pain.

To be clear, being diversified won’t stop my portfolio from losing value during a market correction or crash.

However, it should mean that my income stream isn’t massively disrupted if one or two stocks have to cancel their payouts.

Small steps
Investing in 10 or so companies for an average yield of 6.4% would only generate £1,280 per year in dividends. That’s nowhere near the £500 per month I’m looking for.

But this is where the secret investing sauce that is compounding comes in. By reinvesting the passive income I receive over time, I’m more likely to get to where I want to be.

Compounding at 6.4% annually for 25 years will generate just over £500 per month. I think that’s very achievable, especially if I’m shielding all of my gains from the taxman (remember him ?).

And the more money I can add on top of that initial £20k, the greater that passive income pile might become.

Remember this is no such thing as a safe dividend but just ‘safer’ dividends.

Trading update for the first quarter ended 30 June 2024

Assura plc (“Assura”), the specialist healthcare property investor and developer, today announces its Trading Update for the first quarter to 30 June 2024.  

Jonathan Murphy, CEO, said:

“Over the first three months of our financial year we have continued to deliver on our strategic objectives, and remain extremely well-placed to help support the NHS and wider healthcare market: we deliver an exceptional product, have a strong financial position, and have a culture that focuses on all of our stakeholders to ensure we build strong relationships for the long-term.

“At our results in May, we announced we had entered into a £250 million joint venture with USS, the largest private pension scheme in this country. This represents a significant and exciting step for Assura, providing further diversity of funding for future growth. It also allows us to recycle capital into our pipeline of opportunities across broader healthcare markets including with NHS Trusts, private hospitals, mental health and in Ireland. We continue to look at further emerging opportunities which could be funded through a variety of sources, including third party capital, whilst operating within our stated LTV policy range of 40-50%.

“The UK healthcare crisis is getting more severe by the year, which in turn is driving increased demand for healthcare infrastructure. The requirement for investment in this space has received cross-party political support, and we look forward to working with whichever party is in Government following today’s election.”

Continued track record of disciplined activity through first quarter

•      Portfolio of 612 properties with an annualised rent roll of £149.2 million (March 2024: £150.6 million)

•      Three developments completed with a total combined spend of £46 million; GP surgery in Shirley, ambulance hub at Bury St Edmunds and our largest in-house development project to date of the Northumbria Health & Care Academy at Cramlington

•      42 rent reviews settled in the quarter, covering £7.0 million of existing rent and generating an uplift of £0.5 million (7.8% uplift on previous passing rent)

•      Initial tranche of seven assets (valued at £107 million) agreed for transfer to joint venture with USS

•      Completed three asset enhancement capital projects (total spend £1.5 million) and four lease regears (existing rent £0.5 million); on site with a further five capital projects (total spend £2.9 million)

•      Quarterly dividend increased by 2.4% to 0.84 pence per share, as announced at the full year results, with effect from the July 2024 payment

Pipeline of opportunities for strategic expansion and further growth 

•      Currently on site with five developments; total cost of £46 million (March 2024: eight, £92 million) of which £32 million is remaining to be spent

•      Immediate development pipeline of five schemes (total cost of £28 million) (March 2024: five, £28 million).

•      Pipeline of 15 capital asset enhancement projects (projected spend £9 million) over the next two years

•      37 lease re-gears covering £4.5 million of existing rent roll in the current pipeline

Strong and sustainable financial position

•      Weighted average interest rate unchanged at 2.30% (March 2024: 2.30%); all drawn debt on fixed rate basis

•      Weighted average debt maturity of 5.8 years, no refinancing on drawn debt due until October 2025. Over 50% of drawn debt matures beyond 2030, with our longest maturity debt at our lowest rates

•      Net debt of £1,159 million (March 2024: £1,217 million) on a fully unsecured basis with cash and undrawn facilities of £293 million

DIVIDEND DECLARATION

   

Supermarket Income REIT plc (LSE: SUPR), the real estate investment trust providing secure, inflation-linked, long income from grocery property, has today declared an interim dividend in respect of the period from 1 April 2024 to 30 June 2024 of 1.515 pence per ordinary share (the “Fourth Quarterly Dividend”).

The Fourth Quarterly Dividend will be paid on or around 16 August 2024 as a Property Income Distribution (“PID”) in respect of the Company’s tax-exempt property rental business to shareholders on the register as of 12 July 2024. The ex-dividend date will be 11 July 2024.

The Company has now declared four quarterly dividends totalling 6.06 pence per ordinary share in respect of the financial year ended 30 June 2024, in line with the Company’s full-year dividend target.

As the Company’s ordinary shares are currently trading at a discount to the published EPRA Net Tangible Assets per share, the board of directors of the Company (the “Board”) believes that it is not in the best interests of shareholders to offer the scrip dividend alternative, under which shareholders would have been able to elect to receive new ordinary shares in lieu of the cash dividend (the “Scrip Dividend Alternative”). The Board has therefore exercised its discretion to suspend the Scrip Dividend Alternative in respect of the Fourth Quarterly Dividend.

All shareholders who are entitled to receive the Fourth Quarterly Dividend will therefore receive it in cash.

The Board will keep under consideration the offer of a scrip dividend alternative in respect of future quarterly dividends