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I agree, with such a large discount there is clear upside especially with continued buy backs.
On the other hand it is clear that there will not be a wind up just yet.
I can easily see 20% returns over the next year or so, if not the pressure will be for bigger buy backs or wind up will be back on the agenda.
To clarify .....I find it unthinkable there couldn't be a growth in NAV.
Today's full year results are pleasing.
The NAV is $739m and that contains $311m of cash/publicly traded shares so a net $428m of oil & green investments (green & blacks?). Meanwhile the market cap is $365m at today's price (or net of 365-311 = $54m.
So effectively stripping out cash/publicly trading buying RSE you are buying at a 87.3% discount to NAV!!!!!!!!!!!!! (i.e. 54/428)
Or put another way, paying 89.25p for each share of 707.44p worth of investments (net of cash/publicly traded).
It gets better.... (seriously!)
Because of cash buy backs if the NAV increases by **NOTHING** in the next 12 months but buybacks continue there are $23.2m of buy backs authorised and let's say at £6 a share (nothing changes to price either) then the shares in issue drop to 46.15m and 3.86m are bought back in 2023. Well, NAV $716.8m - $287.8m = $429m of net assets, divided by 46.15m shares that's a net of $9.30 or £7.68 a share net of cash/publicly traded.
So you're paying 89.25p for each share that increases from 707.44p to 768p worth of investments (net of cash/publicly traded) by the end of 2023. Just because of already announced buy backs. A discount to NAV of 88.4%
But NAV ***HAS*** grown. By 96% actually since June 2020. Some of that admittedly due to the recovery of oil in the USA. But there's a "little" US legislation ($368bn is not so little) called the Inflation Reduction Act. There's mention in the annual report of its effects already but this will grow throughout 2023, so I find it think there couldn't be a growth in NAV.
As for the oil plays I am bullish for these also. China's reopening, the continuing resilience and strength in major economies, overall world growth forecast of 2.9% for 2023. Meanwhile supply is challenged. Russian oil fields will dwindle without Western expertise and through sanctions. Iran is non grata. Goldman Sachs thesis is H2 2023 will see new highs for oil.
So I've topped up today based on this analysis. Judging by the fact not a single comment here and 26 trades all day this IT is so off the radar. It's a previous Questor recommendation from a few months back.
GLA
https://www.lse.co.uk/rns/RSE/final-results-for-the-year-ended-31-december-2022-m03vwdkgxcczgeo.html
Latest holdings RNS is shows after a year AKRC Investments LLC have still been selling. Its been an anchor shareholder buying in at IPO 20,908,815 shares c. 30% @ £10.00/share. They have 9.5% to go.
I am not sure where I got the major holders list posted here... its false news.
Quilter Investors Ltd. 12,292,141 24.2%
Moore Capital Management LP 8,430,490 16.6%
Alaska Permanent Fund Corp. 6,308,990 12.4%
Riverstone Investment Group LLC 3,615,170 7.10%
Brooks Macdonald Asset Management Ltd. 1,965,397 3.86%
Pacific Capital Partners Ltd. 1,725,879 3.39%
Progressive Capital Partners Ltd. 1,432,250 2.81%
Schroder & Co. Ltd. 1,220,000 2.40%
AXA Investment Managers (Paris) SA 941,000 1.85%
BlackRock Investment Management (UK) Ltd. 403,394 0.79%
Biden praises Musk plan to open Tesla's charging network. Good for the bigger picture.
The seller is relentless, giving us 326.42k shares today. The share price of RSE continues to underperform while the rest of my portfolio grows into overvalued status so it will be soon time to sell some winners for more RSE.
The level of buybacks are phenomenal. If this trust is wound down I believe the private holdings are very desirable and worth more than in the NAV and the listed holding easy enough to sell.
Buybacks continue alongside commitments to Our Next Energy a 1 billion dollar company:
https://www.lse.co.uk/rns/RSE/rel-commits-125m-to-our-next-energy-6ckghif685ssad6.html
USD up strongly too but I am not going to monitor this daily. LON:FEDG is useful to add to any charting tools or for quick look on Google finance.
Back buying back, got to help the discount and will help the NAV.
Agricore I must have incorrectly calculated the NAV. The report was hard to understand and family life was and still is hectic. Draft Unaudited Net Asset Value $739 so that is £652.38 million when I calculated (today £659.23) vs last quarter's $759 million (£681million). This is nomore than a 5% change.
But doing a quick check on the GBP vs GDP for the period I got a 7% increase in the GBP so I am non the wiser. Happy to use your calculations.
Agree this is the most undervalued energy trust vs say BERI the closest comparison.
Very exciting. One day the market will see it.
To put some colour on what a "small decline" means and given that there's not the customary summary box in the RNS showing NAV per share in £ and in $, I've done the maths.
So the NAV per share dropped from $14.58 Q3 to $14.52 in Q4. However the $/£ rate means the NAV per share in GBP dropped from Q3's £13.08 to £11.71 in Q4.
A 10% drop in GBP terms isn't a small decline but is explainable by Q3 being flattered by the Trussonomics crisis and Q4 reverts to where the pound is back to $1.24/£1.
The "bigger picture" also referred to in my mind is the Inflation Reduction Act in the USA. The effect this will have on Goodleap and all the others as it begins to kick in during 2023 and then for 10 years will be a huge tailwind for the decarbonisation portfolio. There's absolutely no reflection of this in the price. In fact the discount to December's NAV in GBP terms is 47.4%!! Another factor is the buy backs. In 2022 RSE bought back 8% of its shares. If this happens again in 2023 then a further 8% bought back (4m shares) would lift the NAV from $14.52 to $15.50.
On the basis that this should be at no more than 20% discount, the target price is £12.40, or double today's share price.
GLA
Results out. A small decline that dwarfed the share price fall. Share buybacks to continue. I am a pessimistic sort but with the bigger picture, the share price should move upwards from here.
A selection of today’s trades. Someone playing games or falling asleep on their keyboard whilst drunk? (!)
23 16:21:28 591.18 205,961 Unknown* 1m O
30-Jan-23 16:13:38 591.18 -205,961 Unknown* -1m O
30-Jan-23 16:02:21 590.00 -105,961 Unknown* -625.17k O
30-Jan-23 15:48:56 590.00 -100,000 Unknown* -590.00k O
30-Jan-23 16:13:38 591.18 205,961 Unknown* 1m O
30-Jan-23 16:04:29 596.00 5 Buy* 29.80 O
30-Jan-23 16:02:21 590.00 105,961 Sell* 625.17k O
30-Jan-23 15:49:18 591.563 147 Sell* 869.60 O
30-Jan-23 15:48:56 590.00 100,000 Sell* 590.00k O
£1m bought at 591.18p, the seller(s) selling at 590.00p. No longer filling me with confidence for tomorrow morning.
A person on ADVFN was on about the fall in the USD which means in pound terms the chances are a NAV decline in GBP however in USD the chances are a NAV increase. A USD NAV increase is still bullish regardless of the currency decline as this supports the long-term trend while currencies always fluctuate.
There was a £594.00k trade going on late on a Friday. I wonder when that is complete the Q1 will be out and with no financial calendar we can see last year its was the 1st of Feb. So tomorrow possibly.
Suspect the q'ly valuation update will be out monday. This is ridiculously cheap on a discount to nav basis. Is the buyback scheme currently suspended?
The MACD look in good shape and we the next NAV update could result in a higher and even wider discount given the sector this is in. At 616p this is a strong buy for a trader or investor.
Agree Tobin. For me I could do with a nice pie chart showing sector allocation as this is no longer an "Energy" holding what with plant nutrition and decarbonization as much as O&G. This makes it hard to value but oddly still attached to the oil price. Suppose I could create a pie chart myself. One to hold on to extreme weakness and it often has relatively short periods of that.
We don't have a current NAV, oil and gas prices are down from what they were.
Buy backs have got to help but they have not been particularly large. Having said that they have been somewhat bigger in the last couple of months that may suggest that they think the discount is still high or higher. It may mean there are more sellers and they can buy more. The stock is not heavily traded. This was given as an excuse by the CEO of another highly discounted stock that I own, Pantheon International. But then it should mean buy backs should have more impact??
If the buy backs do not reduce the discount .... great, the company should keep buying as it certainly increases the NAV that ultimately will drive the SP.
Regardless of the great performance driven by the sector, the discount is so wide any major holders wanting to make what can only be described as a massive gain will vote to wind up the company. I would simply increase the share buybacks and begs the question why are the buy backs not working.
From aic "The Discontinuation Resolution was not passed at the EGM held on December 2020. The Board will continue to evaluate the Investment Manager's performance before 31 December 2022 and decide whether or not the Board should call for a Shareholder vote to wind up the Company."
I note it says investment managers performance not share price performance.
Also it's full name is "RIVERSTONE ENERGY LTD (RSE) REDEEMABLE ORDINARY"
If so when are they redeemable?
Nice discount if there is a redeemable date and price available or a vote in favour of discontinuation?
Investment trusts seem to be out of favour, and investors seem to want ESG, no risk and the world to be different than it actually is. Fortunately this leads to opportunities…