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I can only assume that people have lost trust in what the management are telling them.
AT what point does the 'discount to NAV' make CHRY an absolute bargain.....I suppose it depends on how much one trusts the NAV. The fear will be that Klarna is replicated for other investments.
The problem is obviously that companies are 'allowed' to value themselves at astronomical amounts, that bear no relationship with reality. Like the whole investment world is hypnotised. Hopefully when valuations come back to planet earth CHRY will find its level and confidence will be restored. Perhaps we are there already....
Chrysalis forecast next 12 months 20p EPS +39% to forecasts 3 months ago:
https://www.investorschronicle.co.uk/tips-ideas/2002/01/02/latest-update-companies-smashing-broker-forecasts/
12 months this was at a 20% premium to NAV and now is at a 50% discount according to IC:
https://markets.investorschronicle.co.uk/data/investment-trust/tearsheet/performance?s=CHRY:LSE
Overdone. I've added a few more on today's weakness.
Agricore - thanks for your analysis. The RNS also mentioned the improvement in WISE from 30/06 at 297p to 541p. +80%. (510p today).
A lot of ETF's are down compared to Dec 2021. I agree that CHRY is unfashionable at the moment. Some of it self inflicted but they have now improved process a lot. Let's hope for better sentiment about the large discount to NAV.
Simply because the stock market in the short term is a voting machine.
And CHRY is unpopular because of it's high profile losses e.g. Klarna fundraise at a much lower revaluation and various negative articles about greed and bonuses - just read other posts here - and also generally that growth shares have been hammered hard due to perceptions around discount cash flow.
Long term the stock market is a weighing machine and many of CHRY holdings are profitable, cash flow generative, or increasingly becoming so. CHRY hold a good chunk of cash which could be used to support holdings where needed too.
I can't speak for fat cats or their killings. I think most cats have hibernated into cash, and therefore are overlooking opportunities like this IT. What you need to decide, is how real is the discount and whether it can grow, and provide returns to investors then invest accordingly.
i dont understand why such large discounts on so many shares? Surely some fat cats could just buy it out and sell the sums and parts and make a killing. Some with REIT's. Why is no one jumping on 35+ percentage discounts to NAV is beyond me.
Rofert, you're in luck. Lord Rockley is a highly experienced ex-KPMG audit partner in PE and oversees the CHRY 30th June valuation. He is joined by 3 others all with solid credentials. The point about valuations has been squarely addressed in my view.
163.48p is a pleasing result particularly when you consider 30/06 was something of a low point and since then many peer valuations have reverted e.g. Paypal and Square. Of particular note was Starling's ROTE of over 17%. Wow. RevB's precipitous drop is also post period.
So a discount of 47.5% to NAV (163.48p vs 85.7p) is substantial.
However if you remove the (18th Aug) of 20.5% of market cap of cash and listed equities (17.6p a share or £105m) that leaves £867m worth of unlisted investments as at 30/6/22. So you're in effect paying 68.1p for 145.88p of unlisted - so a whopping 53.3% discount.
Or put another way if you consider the holdings in Starling, Klarna and We Fox as "solid" then that's 37% alone and you are getting holdings in:
Smart Pension, The Brandtech Group, Graphcore, Featurespace, Deep Instinct, Wise, InfoSum, Tactus, Sorted, Secret Escapes, THG, Revolution Beauty all for free.
......And that's before we start looking at upwards revaluations post 30th June. As CHRY allude:
"Post period end, equity markets have performed much better with the GS Non-Profitable Tech Index +13% and NASDAQ +15%. This has led to a material rerating in many relevant listed peers to our portfolio companies, including Affirm (+72%), Trade Desk (+57%), Lemonade (+35%), PayPal (+39%), Bloc (+21%), Amazon (+30%), Adyen (+16%) and Crowdstrike (+13%)."
Last year this was published on 20th August so a new statement is hopefully imminent. CHRY website still stating the NAV at 211.76p. A realistic calculation will be helpful.
Hi all, sorry to ask on this forum but am doing my self assessment and was wondering - As I understand CHRY is an offshore fund based in Guernsey, and does not seem to be on the HMRC list of UK reporting funds (https://www.gov.uk/government/publications/offshore-funds-list-of-reporting-funds). Therefore any realised gains are.... income rather than CG? Anyone have any information on this?
Well, I've dipped my toe in the water here - not too many, but see how it goes with a small initial purchase.
I reckon the bad news - and there's been plenty of it in this trust - is sort of baked into the price.
Even using danbaker's estimated current nav of 150p, today's buy price represents a pretty compelling discount to nav of 42%.
I probably would trade this for a quick 10% but I'm not expecting that to happen. More likely a 50-100% rise over the next 3-5 years.
Is Jupiter's 22% holding an overhang? I don't think so, why would they stymie their own investment?
Could be I'm the only mug punter giving it a go. It does feel v difficult to invest at the moment.
I can understand the disappointment but an 80% haircut on Klarna's valuation, while huge, is not out of kilter with what's happened to other highly rated companies in this space.
This actually gives me more confidence in the valuations.
So latest KLARNA fundraising marks valuation at only 13% of previous valuation. If this was to be repeated, where would the SP rest? Is there a case to me made against managers for (most charitably) negligence?
So the new Klarna funding round is at a valuation of around $6.5bn, about 80% below the last funding round at $30bn. Hugely disappointing and takes around 30p off the NAV - latest NAV is just north of 150p using latest share prices.
Apologies. What I should've said was it may all be Captain Hindsight to you (and I'm sorry if you've suffered losses here) but it's new to me and I'm trying to avoid becoming Captain C*ck-up, myself.
Just disseminating, Captain C*ck-up, try it sometime. ;)
Captain Hindsight strikes again.
I've done a little digging.
Seems the NAV has indeed been dropped (again).
Also appears the valuation methodology was indeed not prudent enough, esp in relation to Klarna, and they've now removed responsibility for valuation of the unlisted portfolio from the trust's managers (but not before they trousered £117m in performance fees, which cannot be clawed back) and given it to an "independent committee".
Is that £117m in performance fees for a Trust whose share price has dropped by 2/3rds in 10 months and now has a mkt cap of just £600m?? How generous. I further note they are (belatedly) changing the performance fee methodology... of course the horse has bolted and disappeared over the horizon.
As for Wise, seems their CEO has been a naughty boy and is up before the head beak.
A fair number of red flags here, mostly under the headings of 'morality', 'honesty' and 'daylight robbery'. A lot of this can be overlooked when everyone's minting it, but in this new paradigm of low returns, maybe not.
Looks like a 'Lifestyle Trust', this one - and it's not the investor's life that's getting enriched.
Pass.
Would anybody happen know what percentage of CHRY's portfolio is in listed investments? I'm trying to get a sense of the credibility/accuracy of the NAV.
Given the massive discount, one has to assume that the market thinks the next NAV update will see a big drop, or that the valuation methodology is not prudent enough, or both.
I've been looking at WISE in particular, which I believe to be undervalued, and one can obtain a holding in it at an additional 48% discount (per HL) via this investment trust.
IF one can believe the NAV.
Tempting...
Yes Agricore it's really harsh, especially against the unaudited NAV on the 21st March. Hopefully just panic selling and not an indication of the future NAV. I'm too heavily invested to the add any more but this should be an excellent entry point for new investors.
The brutality reaches epic proportions. I'm amazed this has reached 45% discount to reported NAV.
The brutality continues.
Now on a 27.4% discount to NAV where the historic average shows as 5% premium NAV.
Yet in 2021 CHRY achieved NAV growth of 57%. Thinking about the portfolio many will be doing better in 2022 than 2021 - Secret Escapes, Starling, Revolution Beauty immediately come to mind. The buy now pay later (BNPL) negativity for Klarna probably weighs but don't forget this is a fast growing area of credit and that again credit is MORE prevalent - not less - in 2022 than 2021. Also that US penetration of BNPL is very low (2%) compared to say the UK at 5%. So lots of growth potential. The fact BNPL will be regulated in the UK is actually a positive for incumbents (creates a moat and new entrants was the biggest threat). THG is another "negative" component but their recent (21st April) trading update was very positive and shares there have rebounded from around 87p to around 115p. I have loaded up quite heavily here as I think there's is extreme negative sentiment and the fundamentals will win through here.
Worth reading the 2021 Annual Report to see for yourself what sits beneath the "bonnet": https://api.fundpress.io/documents/retrieve/4ff7aa78-fe0a-40d0-9396-2f7653735e89/filename/Chrysalis-Investments-Limited-Annual-Report-2021.pdf
GLA
Maybe it's time to average down.
Brutal selloff now in Chrysalis which is now down nearly 20% already in 2022. Looks harsh as it's been caught up in the switch away from growth stocks as well as the underwhelming capital raise at the end of last year. Using the latest share prices for Wise, THG and Revolution Beauty I make the NAV to be around 240p so a reasonably big discount but it will be Klarna and Starling Bank that really drive the share price given they make up two thirds of the investments.
Every huge buy has a huge sell.
THG that makes up <8% of CHRY and also now WISE had a smaller fall. The high overblown negative publicity THG are getting have killed the reputation and bullishness in UK IPOs and CHRY.
It could take months to sort out THG shenanigans.
But we do have Klarna, Graphcore, Starling Bank and the rest...but now at a cost.
Could anybody clarify why there’s monster buys today ? Yet THG is 34% down due to the dildo who runs it thinking he’s gods gift ?
Like THG but didn’t wanna hold it alone hence CHRY
God bless hope no 1 got stung today