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I have added this afternoon.
Usually a cue for the so to tank :(
At this price, with the ONT share price where it is?
Current market cap of SUPP = £330m
Prior to IPO ONT had 712,000,000 shares. SUPP held 3.7%. Sold 10% at 425p = £11.2m. Rest of ONT holding currently at 605p = £143m. Therefore ONT holding and the cash they have just banked is 46% of current SUPP market cap.
SUPP currently makes 24.6% of NBV as at its last valuation. Plenty of upside.
Yes, why has the SP failed to respond? And it's a shame SUPP has sold 10% of their ONT holding @ 425p when the current price is 602p!
Excellent RNS. Congratulations to the managers for their brave strategy of sticking with ONT. Why has the SP failed to respond?
Agreed Neil Woodford knew his onions but he also made some very basic mistakes. Long-term investments in illiquid shares should never have formed part of a Unit Trust whereas within an Investment Trust they're hidden gems.
If they sell some as part of the float and sell more in the aftermath (hopefully at a better price) that is still a good outcome and should give a decent uplift in NAV.
I'm hoping for a rise more like 25% off the back of the Oxford Nanopore flotation.
But longer term I don't think Neil Woodford was that bad a stock picker, and a lot of companies in the portfolio look like they could do well. Don't see this as a bad place to park some funds for a couple of years, especially with the NAV discount.
Beardozer. I think that's exactly what they're planning to do – sell up, partially at least. So those calcs might be on the optimistic side.
As per the recent RNS:
"As part of the potential initial public offering ("IPO"), it is expected that the company will include a limited secondary offer. Final details on sizing will be made available when the final prospectus is published. While the Company remains highly confident of Oxford Nanopore's prospects to realise a strong IPO and generate continuous shareholder value, given the large position of Oxford Nanopore in the Company's portfolio (21.8% of its Net Asset Value as at 31 March 2021), the Company will seek to further diversify its portfolio through a partial realisation of its holding."
What if SUPP sell their holding in Oxford Nanopore as part of the IPO or exit shortly afterwards?
The time period is dependent on the Oxford Nanopore IPO and the following calculations are taken from the back of an envelope and ignore SUPP's discount to NAV. Current Mkt. Cap. is £298m and SUPP own 4% of Oxford Nanopore which is 25% of their portfolio. So £298m x 25% is roughly £75m. Which implies Oxford Nanopore is valued at £1.87bn which is out of date - it's more like £2.3bn. The forthcoming IPO could value it at £3.4bn or maybe higher. If it hits £7bn post-IPO then SUPP's £75m holding would be worth £280m. That £205m increase would make SUPP's Mkt. Cap. £503m, an increase of 68.79%. Hopefully that would make SUPP a more attractive investment and it's discount to NAV would shrink so a 75% increase in the SP is not impossible. Obviously, if Oxford Nanopore's IPO is a flop my projections are very different!
Interested to understand why you think it'll rise 75% and over what time period?
SUPP up 8% while IPO down 5% where investors are apparently shorting it! SUPP must rise at least 75% from here and I have plans where to invest my profit! A 67-bagger if anyone's interested. DYOR
However we been at a high earlier in year 39 so still some to go.
https://www.investmentweek.co.uk/news/4036945/woodford-favourite-oxford-nanopore-unveils-ipo
In its latest funding round, the company was valued at £2.4bn but the IPO could see the firm valued around £4bn, according to analysts at Jefferies.
The estimate was based on the firm's 2023 revenue targets and in comparison to its closest listed rival, $6bn Pacific Biosciences.
In the six months to June 2021, revenues at Oxford Nanopore were up 22% to £59m, compared to the same period in 2020.
Not just Nanopore. SUPP has some very promising investments looking forward.
Finally, a reaction in the SP to the ON IPO and our share of it. Wish I'd bought more now!
You make a good point about the reducing spread! Yesterday's SP rise was very disappointing after Buys to Sells were over 5-1.
40p by next Friday wouldn't surprise me as both SUPP and IPO will be in demand for their holdings in Oxford Nanopore which I think is worth north of £7bn. 4% of £7bn is £280m which is almost the current Mkt. Cap. of SUPP.
SUPP are gradually moving up and back towards the NAV. The spread is reducing nicely and whoever is drip selling their holding the shares appear to hoovered up quietly. Possible anticipation to gain traction and value from the Oxford Nanopore IPO ? Keep it up Schroders. Spkr.
I believe SUPP will move up sharply once Oxford Nanopore price and market cap is established. Already at a big discount to NAV and surely a better play on Oxford than buying share in IP Group . Good to hear ON is finally coming to market in Q3.
I can't explain it apart from IP Group own 15% of ONT while SUPP own 4%. However, ONT is around 25% of each PF so if the value of ONT were to double then the percentage increase in value of each PF ought to be similar unless I'm missing something (which wouldn't surprise me). Another factor is the discount/premium to NAV: I would guess SUPP's discount is around 20% while IP Group might have moved to a small premium.
Reuters reports Oxford Nanopore IPO is imminent and IP Group, a shareholder, jumps 9% while SUPP remains unmoved. Can someone explain that please?
It's nice at least one investor agrees with me! And hats off to Schroder who have turned this fund around quite spectacularly without anyone seemingly noticing, especially my arch nemesis ProphitOfDoom. All debt has been repaid, they have sold legacy holdings at a decent profit and now have cash to invest. As you say, the goldmine may not be short term.
Beardozer, I fully agree with you opinion, SUPP is undervalued but for obvious reasons over the last 2 years market sentiment has been against us. I have had no options but to average down but feel very confident in my decision to buy. I am not so sure the goldmine is short term, steady burn and market re-valuation is what we need. I sincerely believe Schroders will not allow SUPP to fail. Nice one BD
Believe that and you'll believe anything! But, there have been some hefty buys lately which would tend to support my opinion that SUPP is undervalued. Anyone selling doesn't understand the possible goldmine they're sitting on.
Which then becomes your own view on how much of that discount is overplayed or underplayed. I wouldn't just concentrate on Nanopore as a saviour though...