Woodford Concerns

fun4everyone

If it goes under 30p I will buy some. I just plucked that number out of nowhere because 1) The NAV appears impossible to fairly price so everyone is just guessing in regards to that and 2) It's a complete punt - there must be some value in the portfolio. Presumably it's going to see a short term rise if these shorters close their positions though.

Brian65

Going by the discount and fees WPCT is a screaming buy. I don't think Woodford is a superstar or toxic - just mediocre with runs of good and bad luck.
But this is what puts me off
https://www.fool.co.uk/investing/2019/06/17/why-id-still-avoid-the-crashing-woodford-patient-capital-share-price/
Maybe the possibility one or two of them could be another Glaxo in the making though? In which case I'm missing out big time.

MaxiRobriguez

Brian65 wrote: »

Going by the discount and fees WPCT is a screaming buy. I don't think Woodford is a superstar or toxic - just mediocre with runs of good and bad luck.
But this is what puts me off
https://www.fool.co.uk/investing/2019/06/17/why-id-still-avoid-the-crashing-woodford-patient-capital-share-price/
Maybe the possibility one or two of them could be another Glaxo in the making though? In which case I'm missing out big time.

I don't see 'screaming buy' at the moment, even if the NAV was accurate. There's too many things that need to be shaken out before putting your money in. I want to see just how forced Woodford is to sell EI funds and how that impacts PC. I also want to see if there's any board overhaul/strategic change.

There's too many "what if's" to argue that a near term price rise can occur. It's a monitor over the next 30 days or so for me.

Brian65

MaxiRobriguez wrote: »

I want to see just how forced Woodford is to sell EI funds and how that impacts PC. I also want to see if there's any board overhaul/strategic change.

Yes but if that works out well the price will have gone up.
If your buying stuff like this you need to be looking at least 5 years - not 30 days!

MaxiRobriguez

Brian65 wrote: »

Yes but if that works out well the price will have gone up.
If your buying stuff like this you need to be looking at least 5 years - not 30 days!

There are other risks remaining that will suppress any increase in price, but it's those two things that would give me some sort of confidence to take the punt that it could be (somewhat) recovered over the long term. As it currently stands I'm not even sure the fund will still exist in 2020.

Malthusian

I have a pet theory that somewhere a private equity fund will be running the numbers on all WPCT's holdings, every single one, and working out exactly what a fair value looks like.

Then once everyone is done juggling falling knives between themselves, they will make an offer for the whole caboodle - which will be substantially lower than the current hallucinogenic NAV and the share price where a lot of knife-catchers bought in.

It will be accepted by more than 50% of shareholders because the institutional holders want shot of the fund so that it doesn't keep dragging down their performance figures in years to come.

As this will be a full takeover, those who tried to catch a falling knife will have no option to hold and hope.

This will be in everyone's interests as the frauds and no-hopers will be allowed to quietly go bust out of the public eye. The private equity fund will be able to do what private equity funds do best, i.e. mercilessly drive the viable companies to IPO or sale within c. 3 years, none of this "patient capital" nonsense. Woodford will be able to retire and write his memoirs. WPCT's institutional shareholders will take an immediate hit but it won't drag down their figures in the managers' future performance reviews. Everybody wins. Except those who bought in the last few weeks, but there won't be enough of those to stop a buyout.

I am not putting any money on this, but when things are in the interests of everyone involved other than the punters who will lose their money, they tend to happen.

Woodford Equity Income has already served as one object lesson that time in the market doesn't always heal all wounds, and WPCT could be another.

MaxiRobriguez

Malthusian wrote: »

I have a pet theory that somewhere a private equity fund will be running the numbers on all WPCT's holdings, every single one, and working out exactly what a fair value looks like.

Then once everyone is done juggling falling knives between themselves, they will make an offer for the whole caboodle - which will be substantially lower than the current hallucinogenic NAV and the share price where a lot of knife-catchers bought in.

It will be accepted by more than 50% of shareholders because the institutional holders want shot of the fund so that it doesn't keep dragging down their performance figures in years to come.

As this will be a full takeover, those who tried to catch a falling knife will have no option to hold and hope.

This will be in everyone's interests as the frauds and no-hopers will be allowed to quietly go bust out of the public eye. The private equity fund will be able to do what private equity funds do best, i.e. mercilessly drive the viable companies to IPO or sale within c. 3 years, none of this "patient capital" nonsense. Woodford will be able to retire and write his memoirs. WPCT's institutional shareholders will take an immediate hit but it won't drag down their figures in the managers' future performance reviews. Everybody wins. Except those who bought in the last few weeks, but there won't be enough of those to stop a buyout.

I am not putting any money on this, but when things are in the interests of everyone involved other than the punters who will lose their money, they tend to happen.

Woodford Equity Income has already served as one object lesson that time in the market doesn't always heal all wounds, and WPCT could be another.

I rate this at a high chance, which is why current prices cannot be a "bargain".

People buying in now and hitting and hoping. Best of luck to them whilst the shake out still has a little while to go.

AnotherJoe

MaxiRobriguez wrote: »

I thought the NAV couldn't (accurately) be estimated, which is why we were avoiding it in the first place?

Let's face it, very few people even the experts are going to struggle to accurately calculate the true NAV given the complex mix of illiquid investments, niche companies, selling pressure brought on by Equity Income needs, potential grey-area investing in associates companies, lack of board oversight yada yada yada.

The path of least resistance is down I'd agree in the short term. That doesn't necessarily mean that opportunistic investors cannot consider prices to buy in at, if they're feeling particularly ballsy.

It can be better estimated than the self interested "we'll have our mates at Link value it (and look at their history )" current NAV.


eg start by writing off IH, BAI, Keir down to half what it is now which is close to nothing, halve all the rest of the non public and even thats being generous I reckon, and I think it comes to about 35p a share.

There's a lot of anchoring going on with respect to the last NAV which has as much credibility as an LC&F directors guarantee.

MaxiRobriguez

AnotherJoe wrote: »

It can be better estimated than the self interested "we'll have our mates at Link value it (and look at their history )" current NAV..

Of course, I don't disagree that the actual NAV is lower than what is reported.

I've not seen any convincing argument which can hone in on a specific figure yet though. People buying at 55 are taking a punt. So will the people at 45, 35 etc.

AnotherJoe

MaxiRobriguez wrote: »

Of course, I don't disagree that the actual NAV is lower than what is reported.

I've not seen any convincing argument which can hone in on a specific figure yet though. People buying at 55 are taking a punt. So will the people at 45, 35 etc.

See the Motley Fool article i linked to earlier that has a link to an estimate with something behind it other than Mr Woodfords "lets jack up the price of Defies Physics Inc by 382% this month"


Looks like todays Greater Fool thinks low to mid 50's is the "worth taking a punt on" price but I am going with an earlier poster who reckoned it would be sold for pennies on the pound.I dont think most buying understand IH (or BAI which is looking quite dodgy as well)