Woodford Concerns

Moe_The_Bartender

It seems that WPCT is close to breaching its 80% limit on unquoted stocks. Investec have placed a sell rating with a target price of 40p. Trading under 47p today.

poppy10_2

Moe_The_Bartender wrote: »

It seems that WPCT is close to breaching its 80% limit on unquoted stocks.

Yes. Woodford's dodgy listings of Industrial Heat and Benevolent AI and too shady for even the Guernsey stock exchange and they have now been de-listed. As the number one and number two top holdings in WPCT, accounting for 17.4% of the portfolio as of April, if they are now going to be classed as unquoted again it is going to push WPCT over its self-imposed 80% limit. Not that that's ever stopped Woodford in the past - he changed the unquoted limit from 60% of net assets to 80% of net assets and then 80% of gross assets, all waved through unquestioningly by the "independent" WPCT board. Nothing to stop him raising the limit to 150% of gross assets.

Also on the horizon - as per FT today Woodford Investment Management is still on the hook to give Proton Partners a further £43 million on request at any point until August 2020. If they call this in, WIM is screwed. WEIF is gated and unlikely to be able to spare the cash. WIFF is (supposedly) only for dividend-producing quoted stocks, and has been facing redemption pressures so won't be able to conjure up £43 million either. WPCT is already knee-deep into its £150 million overdraft and even if it maxes this out still won't have enough cash to pay PP. Omnis (which Woodford previously used to buy into PP) is no longer managed by WIM.

AnotherJoe

Moe_The_Bartender wrote: »

It seems that WPCT is close to breaching its 80% limit on unquoted stocks. Investec have placed a sell rating with a target price of 40p. Trading under 47p today.

Easily fixed. Just write them down to their true value.

Thrugelmir

poppy10 wrote: »

Yes. Woodford's dodgy listings of Industrial Heat and Benevolent AI and too shady for even the Guernsey stock exchange and they have now been de-listed. As the number one and number two top holdings in WPCT, accounting for 17.4% of the portfolio as of April, if they are now going to be classed as unquoted again it is going to push WPCT over its self-imposed 80% limit. Not that that's ever stopped Woodford in the past - he changed the unquoted limit from 60% of net assets to 80% of net assets and then 80% of gross assets, all waved through unquestioningly by the "independent" WPCT board. Nothing to stop him raising the limit to 150% of gross assets.

Also on the horizon - as per FT today Woodford Investment Management is still on the hook to give Proton Partners a further £43 million on request at any point until August 2020. If they call this in, WIM is screwed. WEIF is gated and unlikely to be able to spare the cash. WIFF is (supposedly) only for dividend-producing quoted stocks, and has been facing redemption pressures so won't be able to conjure up £43 million either. WPCT is already knee-deep into its £150 million overdraft and even if it maxes this out still won't have enough cash to pay PP. Omnis (which Woodford previously used to buy into PP) is no longer managed by WIM.

Liquidating stocks at a 15% discount it seems. Forced sellers of large lines just have to accept what's on offer. Stock overhangs have depressed a number of stock prices. Takes time for the market to digest.

Midas

Burford Capital (which from memory was the second or third largest holding in WEIF before the suspension) is being shorted by Muddy Waters and down c. 25% this morning :eek:

Reaper

At times I think I should get back in as
1) Woodford Patient Capital Trust says it is thinking about replacing Woodford which might restore confidence
2) Some investors think it has fallen too far and are looking to make money on a recovery or if the trust is wound up.

But then I hear Woodford has sold 60% of his own holdings in the fund (though he claims it is just to pay tax bills etc)

Now I hear another Woodford pick may well turn out to be dodgy and I wonder just how much research he did on the rest of his portfolio. Once free of the restraints imposed in his previous funds he seems to have gone overboard leaping at every high risk opportunity that he could get his hands on without checking them out properly. Let's hope he didn't invest in LCF

I think I am going to stay clear. It doesn't feel like all the bad news is over yet.

MaxiRobriguez

Reaper wrote: »

At times I think I should get back in as
1) Woodford Patient Capital Trust says it is thinking about replacing Woodford which might restore confidence
2) Some investors think it has fallen too far and are looking to make money on a recovery or if the trust is wound up.

But then I hear Woodford has sold 60% of his own holdings in the fund (though he claims it is just to pay tax bills etc)

Now I hear another Woodford pick may well turn out to be dodgy and I wonder just how much research he did on the rest of his portfolio. Once free of the restraints imposed in his previous funds he seems to have gone overboard leaping at every high risk opportunity that he could get his hands on without checking them out properly. Let's hope he didn't invest in LCF

I think I am going to stay clear. It doesn't feel like all the bad news is over yet.

Replacing the manager doesn't warrant consideration in my mind. You still have a toxic brand and a portfolio which still constitutes a load of crap that will weigh on anyone managing the fund Woodford or otherwise.

Reaper

MaxiRobriguez wrote: »

Replacing the manager doesn't warrant consideration in my mind. You still have a toxic brand and a portfolio which still constitutes a load of crap that will weigh on anyone managing the fund Woodford or otherwise.

That depends what you think of Woodford. If you think the fund price may be driven down below the true NAV by a loss of confidence in him then replacing him and have somebody start to reverse his policies would help.

If you think he has neutral or positive effect on the share price then replacing him is not a good idea.

Personally I think he needs to go, even if the funds are named after him.

Moe_The_Bartender

Midas wrote: »

Burford Capital (which from memory was the second or third largest holding in WEIF before the suspension) is being shorted by Muddy Waters and down c. 25% this morning :eek:

Burford is down over 50% today as of now. It accounted for 6% of Woody's fund at the end of June so will now be around half that or less.

If the Muddy Waters report is accurate, this yet again raises the question about Woodford’s stock picking. Same goes for his chum Barnett at Invesco who must surely be overdue for the bullet. To think that I used to have a six figure sum invested with them at one point and got out before the stench became overwhelming.

Malthusian

I can't really see the point of replacing Woodford and getting a new manager to - what, sell all his unlisted crap and buy large-cap equities with the handful of coppers that is left, turning WPCT into just another UK or global investment trust with an image problem and a hideous performance graph? You may as well wind the fund up.

Equally I can't see the point of sacking Woodford and getting a new manager to keep the fund as it is. It's still the same crap, only you have eliminated the rationale behind the fund, which is: Woodford's genius stockpicking + patience = moon. If you believe that WPCT's investments will eventually come good it makes no sense to sack the man who bought them.

And what are you going to pay a new fund manager with given WPCT's "fee free" structure?

It's double or quits at this point.