Woodford Concerns

bowlhead99

poppy10 wrote: »

Reaper wrote: »

They say:
we calculate that as a percentage of NAV 79% is in unquoteds, 23% in "quoteds with no trading" and 17% is in quoted companies

They got it wrong. 79% of GAV is in unquoteds. That includes the approx £100million overdraft. If you only take net asset value the percentage of unquoteds is significantly higher

Isn't it you that got it wrong?

Because their "...we calculate that..." is telling you that it's already the result of a calculation to convert % of GAV (66% of which is unquoted, 20% quoted with no trading, 14% regular quoted, total 100% of portfolio) to an approx % of NAV (79, 23, 17, with roundings, total 119% of NAV, while borrowings are -19% of NAV)

Scarpacci

The sharp movement in the pound over the past two days is hitting the global companies which benefited from the depreciating currency. The likes of Diageo, Unilever, Diageo, Reckitt, GSK, etc. are all down over 2%. The improving sentiment towards a US-China trade truce also not helping, though how many times have we been whipsawed by that.

I think it's going to be another tough month for the Terry Smith, Nick Train-style investors. Not that either of them claims to be a man for all markets, of course.

It is interesting to wonder if what Woodford was waiting for might finally be happening. A look at today's FTSE risers paints a prettier picture for him today.

Perhaps a more pressing question might be whether it matters now, given the reputational hit and the outflows of the non-gated assets. You can be right eventually but have it come too late.

AnotherJoe

Scarpacci wrote: »

The sharp movement in the pound over the past two days is hitting the global companies which benefited from the depreciating currency. The likes of Diageo, Unilever, Diageo, Reckitt, GSK, etc. are all down over 2%. The improving sentiment towards a US-China trade truce also not helping, though how many times have we been whipsawed by that.

I think it's going to be another tough month for the Terry Smith, Nick Train-style investors. Not that either of them claims to be a man for all markets, of course.

It is interesting to wonder if what Woodford was waiting for might finally be happening. A look at today's FTSE risers paints a prettier picture for him today.

Woodford isn't waiting for the Pound to rise. Woodford is waiting for the disastrous selection of failing/failed companies he bought to come good.

Scarpacci wrote: »

Perhaps a more pressing question might be whether it matters now, given the reputational hit and the outflows of the non-gated assets. You can be right eventually but have it come too late.

If "being right eventually" consists of the pound rising by 2% in a few days perhaps you can inform us what colour the sky is on your planet.

Thrugelmir

Scarpacci wrote: »

I think it's going to be another tough month for the Terry Smith, Nick Train-style investors. Not that either of them claims to be a man for all markets, of course.

Nick Train is bemoaning holding an underperforming Pearson in all their funds for so long. Around a 20% fall in the share price since last months profit warning.

bowlhead99

AnotherJoe wrote: »

Woodford isn't waiting for the Pound to rise. Woodford is waiting for the disastrous selection of failing/failed companies he bought to come good.

If "being right eventually" consists of the pound rising by 2% in a few days perhaps you can inform us what colour the sky is on your planet.

Woodford is not a play on the strength of the pound but on his opinion that UK companies are under recognised and some of them have unnecessarily low valuations.

Following last night's pointer to a potential less-hard Brexit than feared, not only did sterling strengthen by a couple of percent as mentioned, but a broad swathe of UK-focused businesses have decent share price rises. For example in my portfolio tracker I see Tesco and WHSmith up 6.6% today, Syncona up 6% and Lloyds is close to double that (as in a favourable Brexit scenario, consumers and businesses would be more confident and interest rates are at lower risk of being cut further).

RBS are currently leading the FTSE risers with about 15% and lots of UK- exposed businesses (Persimmon, Intu, Kingfisher etc) have double digit percentages.

These swings are a bigger than a couple of hundred bps on the FX rate.

FWIW, WPCT has not moved much. Having bought in the mid 60p range, and not done any 'averaging down' since then, I am a buyer today at 37p.

Thrugelmir

bowlhead99 wrote: »

FWIW, WPCT has not moved much. Having bought in the mid 60p range, and not done any 'averaging down' since then, I am a buyer today at 37p.

Brave move in my personal opinion. When trading in the fund reopens will there be further "firesales" of stock to fund redemptions. Confidence in not just Woodford but the board of WPCT must be at rock bottom.

Scarpacci

AnotherJoe wrote: »

Woodford isn't waiting for the Pound to rise. Woodford is waiting for the disastrous selection of failing/failed companies he bought to come good.

He is waiting for a turn to these UK-focused companies and away from global growth. The pound certainly moves those global UK companies, and as a barometer of sentiment on the UK economy (and Brexit) it does often move in line with those UK stocks.

As bowlhead99 has noted better than I did, those UK-focused stocks are having their day [and perhaps it will only be a day] in the sun.

All I'm saying is there are signs that the market winds may be moving in the direction of what Woodford [in his own words] has been waiting for with regard to his equity income fund and the listed holdings. No, it's not going to change the narrative on those unlisted companies

AnotherJoe wrote: »

If "being right eventually" consists of the pound rising by 2% in a few days perhaps you can inform us what colour the sky is on your planet.

Don't get me wrong, I'm not extolling the virtues of Woodford's record. I don't invest in funds, but if I were to line up behind anyone it would Terry Smith, Nick Train, et al. I've got a portfolio of shares in the Fundsmith/Lindsell Train style, so my only interest here is in seeing where the markets are moving.

I'm not banging the drum for Woodford, merely noting the change in market sentiment over the last two months. In an entire thread devoted to noting just how bad Woodford's performance has been, maybe there's room between posts on the horrors of the unlisted stocks and disasters like Kier to note when those listed stocks he's been buying seem to be in vogue.

Now, I didn't say he was right. I said if the move he is waiting for does happen, it still might not matter at this point given the outflows and damage to his name. He wouldn't be the first fund manager who seemingly comes right too late.

grnglide

When trading in the fund reopens will there be further "firesales" of stock to fund redemptions. Confidence in not just Woodford but the board of WPCT must be at rock bottom.

But WPCT is an IT and isn't gated.


Since it isn't closed, how can it "reopen"?

bowlhead99

Thrugelmir wrote: »

Brave move in my personal opinion. When trading in the fund reopens will there be further "firesales" of stock to fund redemptions. Confidence in not just Woodford but the board of WPCT must be at rock bottom.

WPCT is the closed ended one, which is not required to do firesales for redemption purposes, and has been given some leeway on its bank covenants to avoid selling illiquid assets to repay its funding facility as quickly as might have otherwise needed to be the case.

There may of course be sales of assets at knockdown prices if a strategic buyer is looking to buy a substantial position in something also held by Woodford's open ended one as 'job lot'. The lack of confidence in asset quality or manager/ board quality is something that one would expect to lead to a large discount to published NAV - and there is one - but doesn't strike me as irrational to think that discount will reduce over time and that the loss from the current published NAV will be lower than the large discount.

As an aside, The European Investment Trust plc (EUT) proposed a change of manager this week after some poor years - having made some swift gains in the past I still held a couple of thousand pounds of that as a play on the discount coming good, mentioned in threads here in the past. Baillie Gifford will take it over and reposition as a growth fund and I think some unwinding of the discount will now come to pass, over time (currently 822p share price vs 922p NAV). The discount on the portfolio of European assets allows some insulation from a potential pound strengthening, so I've doubled my holding in the last couple of days.

Thrugelmir

bowlhead99 wrote: »

There may of course be sales of assets at knockdown prices if a strategic buyer is looking to buy a substantial position in something also held by Woodford's open ended one as 'job lot'.

If Woodford holds a sizable holding in a Company, Burford Capital and Amber Crystal for example. Then the stock will get placed at a discount, some off book. Even liquid stocks can suffer from market indigestion.

WPCT is the closed ended one, which is not required to do firesales for redemption purposes, and has been given some leeway on its bank covenants to avoid selling illiquid assets to repay its funding facility as quickly as might have otherwise needed to be the case.

WPCT holds silmilar stocks to the open ended fund. The performance has a high possibility of being correlated as a consequence.