Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
To provide Shareholders with an attractive return, principally in the form of quarterly income distributions by being invested primarily in solar energy assets located in the UK.
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Nice dig up on BSIF .. looks like old news though ... AJ Bell are pretty useless in my view ... I left and moved over to Interactive Investor in 2021 ... saved me £1000 a year in AJ Bell fees for a better on line system that didn't crash as frequently as AJ Bells plus and this was the big irritation ... getting money out of AJ Bell was impossible where I had to stop trading for a week to satisfy cleared fund criteria. Useless.
Well, I wasn't going to buy any more BSIF, as I was already overweight renewables including a good-sized holding of BSIF. But BSIF stood out like a sore thumb today as my only holding in the red for the day. The price has just got silly, at 97.5p. That's a discount of 28% to latest NAV, and a forward yield of 9% (probably still 2x covered). Also, gas prices (which have probably contributed to the falling share price) have been creeping back up, though that could easily change again. I can't help feeling that the reason BSIF has been particularly singled out is because some platforms have been warning potential buyers about it or even blocking them from buying it altogether! (See https://citywire.com/investment-trust-insider/news/aj-bell-blunders-deepen-row-over-fair-value-restrictions-on-trusts/a2440235)
I was puzzled by the idea of BSIF falling an FCA "fair value assessment" (thanks for posting, DaveysShares). So I did some googling and found this:
https://www.lemonfool.co.uk/viewtopic.php?f=54&t=42922
It looks like it can be safely ignored.
James Carthew: ‘Buy’ great opportunities in run-down renewables
https://www.theaic.co.uk/aic/news/industry-news/james-carthew-buy-great-opportunities-in-run-down-renewables
Whatever the reason it's overdone in my view.
The whole sector's down. Something to do with coming elections IMO.
FYI, on Saturday I received an email from A J Bell which advised me as follows:-
"We’ve got an important update for you about an investment you hold – BLUEFIELD SOLAR INCOME FUND LTD.
Recently, this investment failed a fair value assessment, carried out by the manager of the investment itself. This means the investment may not offer you good enough value over the long term. "
I imagine this is why there was a sell off/so drop on Monday.
Apparently the FCA require a fair value assessment to be carried out periodically.
Why is the Bluefield Solar Income Fund so far under NAV?
https://www.ig.com/uk/news-and-trade-ideas/why-is-the-bluefield-solar-income-fund-so-far-under-nav--240305
I have recently bought both BSIF and NESF . They both seem an excellent investment at this time to me.
As Buffet said, be greedy when others are fearful.
All the below are now pushing out over 11% divis. Spoilt for choice. Got all these but not selling. Quite the opposite.
Usf might start buy backs soon.
Good to see Bsif director buys when dips occur.
GSF Gore Street Energy Storage Fund
USF US Solar Fund
NESF NextEnergy Solar Fund
Solar PV is now the cheapest source of electricity around the world – including in the UK, where the cost of utility scale solar has fallen in cost by 88%.
https://www.energy-uk.org.uk/insights/electricity-generation/
Doubled my holding at 99.74p. This is the best opportunity to buy this trust IMO.
https://www.energy-uk.org.uk/insights/electricity-generation/
I was very tempted to add yesterday below 100p. But I've already got 25% of my portfolio in renewable energy funds. I really ought to diversify more. But nothing else I look at seems to be as good risk/reward value. Today I spent some time seriously looking at BBGI. It's probably safer than a renewable energy fund, but lower return and more vulnerable to inflation. I just couldn't bring myself to do it.
We’ll done. I’ve been in this since day one and never thought I’d see the sp back at this level.
Keep buying these heavily discounted ITs. :=))
Bought 25000 at 101.20p
Bought or sold? There's a transaction for 25,000 shares but it's listed as a Sell.
Just bought 25000 shares.
Oh, just seen my 12k buy recorded as a sell. When will LSE stop bothering with providing information that is misleading at best. Just record the trades.
Been watching this for a short while after the recent fall. Decided that now is a good time to start building up a position here for the future.
The buy backs are a good use of funds, given dividend is 2x covered.
Having a government more committed to carbon neutral will help. Its on it way.
GLA
Tichtich and Star Bright, your recent dialogue is amongst the most helpful and enlightening I have read on a bullitin board. Thank you!
Correction: I should probably have deducted 1 percentage point from my return estimates, to allow for the 1% management fee.
P.S. The interim report claims that "ample transactional evidence adds further weight to the credibility of the Company's valuation". Perhaps that's a sign that buyers and sellers of these assets are all doing similar DCF calculations, and pricing assets on that basis.
I'm aware that the NAVs for such companies are based on a DCF calculation. I prefer that to an estimated market value. I don't care that much about the market value, unless the company is going to wind itself up. I'm more interested in the long-term fundamentals, and what better way is there to assess those than a DCF calculation? Of course, a DCF is only as good as its assumptions. So I do look at those. I've looked more closely at UKW, which I have a much bigger position in, and I think its assumptions are pretty conservative. I haven't looked so carefully at BSIF, and I don't think its assumptions are quite as clearly stated, but as far as I can tell they seem reasonable. Maybe they're a bit less conservative than UKW's, but arguably that's balanced by BSIF's bigger discount to NAV.
If the assumptions are correct and the shares are bought at NAV, their long term rate of return should equal the discount rate. That's 8% for BSIF, but I think that's an "unlevered" rate and the levered rate (taking leverage into account) is probably more like 10%. The DCF assumes long-term inflation of 2.25%, but let's say 2.5% inflation to allow for the higher short-term inflation that's assumed. That makes a real return of 7.5% if bought at NAV, or about 9% at current price, which is a little more than the current yield. I take that as confirmation that the current yield is sustainable (rising with inflation) for the long term, if the DCF assumptions turn out about right. That said, I'd be perfectly happy with a 7% real return, and satisfied with 5%, so there's a decent margin of safety as far as I'm concerned.
Well, that's how I look at, rightly or wrongly.
@tichtich - I have a controversial view: the NAVs reported by renewable energy companies applying the IFRS10 “investment entity” approach [where subsidiaries are recognised at fair value through profit and loss] are largely illusory and should be disregarded by investors. Consequently the NAV discounts that many (most?) of these companies are reporting presently are not particularly relevant or useful. In fact, the term “NAV” is somewhat misleading in this use case.
There are three different ways that investment companies calculate NAVs. They are VERY different to each other. In simple terms:
Method A - the NAV represents the sum total of liquid securities traded on the open market. This is how traditional investment trust NAVs are compiled. It is a largely objective measure, verifiable against third-party data.
Method B - the NAV represents the sum total of independent professional valuations of illiquid (not traded on an exchange) assets. This is how property funds work; they have to get periodic valuations of individual properties performed by qualified independent surveyors. This method is slightly less objective, because it relies upon the professional judgement of the appointed surveyors.
Method C - the NAV represents the sum total of the Director’s valuations of the assets (in this case typically unquoted companies) that make up the fund. The valuations are based upon cashflow projections for the underlying assets, to which a discount rate is applied. This is FAR from objective, because it combines together uncertain projections for future cashflows and arbitrary assumptions for discount rates, interest rates and inflation etc.
The renewable energy companies utilise Method C. Thus the “NAVs” they publish are subject to significant inaccuracy. In no way do they represent a dispassionate view of the “market value” of an underlying portfolio comparable to those of companies using methods A & B. The NAV’s they publish are hugely sensitive to input assumptions for discount/interest/inflation rates. That IFRS10 requires these companies to update their self-generated “NAVs” periodically and recognise the changes as operating income just compounds the mis-representation. If/when interest rates and inflation fall these companies will all adjust down their discount rates and report increased operating income as a result. Even if everything else stays the same; no more projects are made operational, no more wind/irradiation etc. the reported “NAVs” will increase. I think this is nonsensical.
The questionable NAVs however form the basis upon which the management companies “employed” by these funds charge for their services. It is the mechanism through which their operators are paid. Hence it is extremely important to them…
What matters more is the ability of the underlying portfolios to produce sufficient free cashflow to sustain their dividends. I may write a separate post on this another time
Thanks, SB. I was wondering about that too. In fact I was struggling to understand most of the items in the NAV bridge. I thought "Date Change" might refer to a change in the life expectancy of the panels. You'd think that, if they'd re-assessed the efficiency/longevity of the panels, they'd mention it in the text.
The chairman's statement mentioned the drop in the NAV, but didn't say anything about what had caused it. Since the drop seems a little at odds with his positivity about the period, I think it's reasonable to expect an explanation.