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Now 48.11p per share.
Share price (mid) is approx 33.1p.
Yes, I noticed that increased NAV and on the strength of it I have today bought a few SUPP. The discount is so big now, how could it possibly go wrong?!! ??
Suspect a few others have the same idea - I did the same earlier today and few decent buys this morning also.
Like theoldmansdoneit you say what can go wrong -(It cant be worse than the W word)
I've been running some analysis on the 48p NAV @ 30% discount which led me to top up.
The NAV at 30/06/21 was £369m. We know that since then Oxford Nanopore rose 20% at IPO then rose further to £7.05 a share today (30/12/21). This translates to a £65m uplift at today's price and equates to around half of the current market price of SUPP (i.e. 16.5p per share). This is a publicly traded stock and while there's a tie in until April this provides a liquid basis for a good part of the valuation.
I'd make the point that BioTech generally has been beaten down in H2 2021 so many of SUPP's public holdings are down 20%-50% but that this is market wide. I am seeing reversion to the mean in other BioTech holdings such as BIOG and ARIX, and the need for BioTech has definitely not gone away - it has increased and also is a diversifier. Moreover the fact that ONT has held its ground since its IPO signals its strength and strong outlook. This article provides a very good overview of why SUPP's holding in ONT is exciting. https://www.ft.com/content/605ab02f-3f17-4c34-9671-c33b9d181222
As for the private holdings, many of these are exciting and fast growing plays on FinTech and 5G - Atom Bank, Seedrs, Federated Wireless are all top 10 holdings (by value). These haven't been revalued and I believe these will do well in 2022. None of this is included in that 30% discount to NAV.
Was the decision of Shroders to invest in JMAT a poor one for SUPP? In hindsight yes this is baked into the price.... the 48p NAV includes the reduced value of JMAT (£21 per share today). But the approx £3m loss is dwarfed by the ONT £65m gain so keep it in perspective. Moreover going forward there are still opportunities in clean air, as EURO7 regulations and similar elsewhere kick in (including in China and India). ICE cars will decline but EVs are still only predicted to be 1 in 7 in the UK in 2022. JMAT's hydrogen strategy could pay off too - PGMs are core to hydrogen (I read today that Palladium can be used like a "sponge" to store hydrogen much more efficiently than compressing it)
The ghosts of Christmases past still haunt SUPP and I love a share with poor sentiment and strong fundamentals..... The stock market in the long run is a counting machine and not a voting machine, as Ben Graham taught us, and picking this up at 30% below its published NAV is a bargain imo.
Happy new year fellow Suppsters
Hi Agricore, Thanks for your ongoing analysis. I have held 100,000 of these for about a year as a long term, possibly life changing investment. I have learnt the hard way that patience is a virtue in these sort of investments!
Best wishes, BB
Great summary Agricore. Appreciated.
Great update from IPO today. I mention this because of the read across of this similar share. The uplift in IPO's 6 month NAV is impressive and sits on a similar discount to NAV as SUPP. Both hold ONT in quite large proportion. It illustrates the point that the market will catch back up once the fundamentals are clearer.
Picked up a few at 29p today bringing my average down to parity with the NAV of 41p.
ONT down 30% year to date and JMAT down 30% in a year....
However, on a 5 to 10 year time frame I am happy to buy and hold.
During the Web conference in October Tim Creed was asked whether Schroders had considered buying SUPP shares with monies from the fund.
He said it had been considered and is always on the table. He said if the shareprice got completely out of whack with the NAV they would seriously consider it.
They must be seriously considering it I would have thought?