Cobus Loots, CEO of Pan African Resources, on delivering sector-leading returns for shareholders. Watch the video here.
To deliver an absolute return primarily investing and trading in ABS and other structured credit investments in liquid markets, and investing in asset backed transactions including through the origination of credit portfolios.
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And another 3.18% Return for the quarter. Great stuff.
I've increased my holding here recently, the discount to NAV very attractive.
Cheers all ))
I would see it as you wont receive any "special dividends" had there been excess cash - instead it would be re-invested.
Am not sure. I read it positively as a potential return enhancing policy but then again, the exact opposition interpretation is possible. Share price has been quite positive the last few months however.
I note the latest dividend rns of 0.0162
Also noted the following footnote in the same rns, under the title 'Diviidend policy update':
"The Company continues to rebalance its portfolio towards tradable securities and has been able to make attractive investments within the Public ABS and CLO sector as opportunities arise within the market. To that effect, the Company plans to remove the previously announced cap on maximum cash balance, so the portfolio manager can have more flexibility to continue to re-invest based on prevailing market conditions, with excess cash being reinvested."
Not sure what to make of this....but do feel they are flagging expectations of lower divvys, in the short term to maintain/grow future yielding opportunities.
Canetoad; you make a fair point, and one that I consider with ALL stocks that have a large concentrated holding. It is a possibility, but actually FAIR has a concentrated (concert?l holding too. With the exception of BGLF which has the least concentrated and most diverse (mainstream) shareholders, I think it's part and parcel of this arena.
Most of these stocks to my mind are set up for primarily for high net worth individuals/family trusts etc, pursuing tax efficient income through the long term and the likes of you and me are merely riding the coat tails of that expertise/oppurtunity. So yes they could low ball us, but the counter balance is what is the incentive when the mandate (high income) is continually delivered and to buy out would merely concentrate their risk?
What advantage is there to the concentrated holders over the status quo? To capture the NAV discount? Well they could do that by using the Company's own money (aka the FAIR way) rather than using their own money.
Yes, it's a risk, and an important consideration, in a number of stocks in this arena. Personally I don't see it
I've spent some time looking at TORO vs FAIR. The possibility of a mandatory low-ball offer is what worries me about TORO. There's nothing that could be done if that happened? That looks far less likely for FAIR.
Agree all that......the flip of larger director hdings is I'd like to see the concentrated holdings fall below the concert party level. Probably my only concern here is that they could take private at SP with no reconciliation of NAV discount for bought out individually holders. Losing any appreciation and yield would be quite a double whammy.
Hi damofarl
I admit that I've been favouring TORO in my regular investing and use of dividend income since the gap increased between NAV and SP.
The standout highlight for me was of course the the €26m income (over 8 cents per share) compared to the previous years loss.
On page 52, I found it refreshing that all the expenses except Audit fees were lower than last years. It says much about the directors attitude with respect to responsibility to us holders IMO.
It's impressive to see the income driven from Taurus, page 13.
An increase in the directors holdings wouldn't go a miss here but overall I'm happy to hold through, and collect these attractive dividends.
Results out today, just of which, they made €21 million last year, and NAV is near identical to a year ago.
One of the (many) concerns people seem to have with the high yields of TORO/these kinds of stocks, is that that income isn't earned, and is in part a return/sell down of assets, ergo unsustainable. That the NAV after a year's dividends is identical shows it is earned. Yes, the SP has lost about 15% this year but when the dividend is fixed at 10% of NAV, if that is static/increasing, i rather ignore SP gyrations.
Of Interest in the commentary....
The Spanish property origination (which has held overall performance back) is now 80% sold, with an 18-24 month timeframe to exit totally. Really happy that they have patiently managed this rather than firesaled it, indeed, they are currently exploring renting out the remaining properties in the interim. Of particular note, through mgmt and natural retirement of loans, this now represents around 10% of NAV as opposed to 16% previously. They are guiding for it to better break even.
They are guiding to less profit/income this year, reflecting their view on the market (lack of opportunities) and a conscious decision to drive up quality of holdings hence lower returns.
They are also considering the sustained NAV discount/SP fall, and any actions to rectify such. I hope this is just a monitoring thing and doesn't herald it's winddowm......
Happy New Year to all TORO'oids!
Gavster NBC;
Early in the year we were discussing TOROs dip; these presentations refreshingly highlight that whilst their performance was not directly impacted by CS AT1s performance was strongly impacted by their proactive (but wrong) repositioning to safety, thus losing the upside.
Couple of take outs from the commentary....they see high single digit income going forward, which makes me contemplate that current NAV based yield is partially returning assets rather than purely from income.... presumably the leverage bridges the gap between income earned/dividend paid? More positively, I do like the explicit conservative/capital protection investment style they promote (albeit that caused a drop in performance earlier in the year).
Chenavari Investment Managers
https://www.chenavari.com › ...PDF
Lyxor / Chenavari Credit Fund
https://www.google.com/url?sa=t&source=web&rct=j&opi=89978449&url=https://www.chenavari.com/wp-content/uploads/2023/10/20231018_MI_Chenavari_UCITS_New_Paradigm.pdf&ved=2ahUKEwiHwey1uryCAxWTQkEAHYXXBOUQFnoECBAQAQ&usg=AOvVaw3b6VL8tdyDFZ78_9P027P5
Hi Damofarl.
Wouldn't worry, I've registered many times with my company name, that in reality has nothing to do with investments, for all kinds of different webinars/calls etc and I've even asked questions and had them answered without appearing unprofessional. I make a fair chunk of my living from investing, I guess many on here do, which is a basic definition of doing something as a profession. I see it as they are just trying to filter out the herd of un-researched quick profiters.
I'll be away for Thursday, but are we really expecting anything drastic ? I doubt it...
The thing of note for me with TORO is the seemingly slowly increasing discount to Net Asset Value of the market valuation.
A bit peeved that the upcoming quarterly webinar is for institutional clients only.
Whilst it does give one a definitive steer on who this stock is aimed at, I do think it's poor form not to acknowledge, allow access, for small investors.
Irrespective of target investor, surely you would want to promote yourself to as many investors as possible. Niggled me a little, so may register surreptitiously anyway!
Of note in the fact sheet was this I thought...." We have been selectively adding risk in recent trading sessions to deploy cash and remain invested including adding AAA positions"
They certainly seem to be trading up to quality.
Another good factsheet with no alarm bells and doesn't give away any details we really want to know.
32.5% discount to NAV. Roll on the dividend.
I've replied, same board.
GavsterNBC - BGLP
Aye, I had the same problem, due to my work position!
Hi Damofarl.
I'm hesitant to write my email on this forum as I can't delete posts.
GavsterNBC; what's your email please
Nice to see the NAV inch up a bit.
The Company announces the following unaudited net asset value per share as at 31 July 2023:
Ordinary Share: EUR 0.6526
Divi ànnouncement tomorrow at 0.159
NAV of EUR 0.6372
10% of that is 6.37 cents. Our current annualised div is 1.6 x 4 = 6.4.
Current yield is 14.5%
Current SP is under 70% of NAV.
Nothing that glares as a worry from the factsheets.
All on track, all is OK.
IMO The yield could literally be the reaction to higher inflation, in that yields all have to higher to be justified as an investment.
Had a look this morning at the May dated webcast, discussing the the 1q to end of March.
Four things struck me -
1) they are stress testing their loans from a base to worst case of between 4 to 8%, whereas the market is stress testing from 3-6%, suggesting their conservatism/mgmt to risk.
2) the sred portfolio, (the Spanish property portfolio), where they highlighted that they have sold some further properties, but don't expect to be exited until 24 months, stating they expect an internal rate of return (IRR) from conception to conclusion of 7%, based on selling remaining property at a 5% discount to original base case. In the context of their current statement of an 11.9% IRR, my take on this is that whilst not firesaling this, it has been a drag on overall performance.
3) The emphasising of rotating into higher quality, and the retention of cash to opportunistically purchase/originate new loans.
4) The absolute calm, and the positivity that the next 18 months would offer excellent entry opportunities.
If I'm honest, I looked in on the webcast to validate my investment here, as I do spasmodically with all my holdings, and came away wanting to add, frustrated that my prudence restricts me from doing so, being so top heavy in these sphere of stocks.
The webcast just shouted business as usual, with an unstated but definite commitment to a dividend of 10% of NAV, ergo SP gyrations aside, for the medium to long term holder here, the gyration of NAV is my focus.
Hi Gavster-NBC, thanks your thoughts....
'I did read this article at the time, thanks for posting. But for me nothing in it pointed towards a 10% drop in SP, in fact it showed an insulation against any impact, also currency movements this year have not figured such a drop.'.
Well, I think we interpreted this differently - I saw it as a blunt admission that had taken a haircut in AT1's, but I agree with your view that THEY considered it was not impactful within the context of the whole portfolio, spoke to me that that was part and parcel of their (risk) mgmt, basically, business as usual.
I don't have an answer for your point about the non correlated drip,drop, drip drop, rather than immediate with some bounce back as per SMIF, but I often find TORO (and it's ilk) uncorrelated both up and down, and whilst I agree selling has pressured this, the last time I looked 3 institutions owned 60%, and the nature of them is they are interested in long term (tax efficient) income, rather than short term SP fluctuations/gains, so those sales have probably come from individual small investors lie you and me, taking a flight to (perceived safety/cash) in the current negative general market environment - where relatively small sales (or purchases), due to the low liquidity, can have a disproportionate impact on the SP.
Yes, interesting the NAV hold up against the SP drop, and that here as with others I hold in this sphere, is actually what I watch, not the SP. When the NAV drops materially, that is when I get concerned, and through all my holdings in this sphere, including TORO, whilst seeing, seemingly worrying SP drops, I've never seen notable NAV drops - and they have all consistently paid high dividends, hence my awareness of TORO's S drop, but lack of concern to it.
And yes, good luck, albeit I believe, timeframe is what matters uhere
Hi Damofarl.
An AT1 discussion was touched on the SMIF board, I didn't contribute. Where the SP chart clearly shows the dip at the same time as the Swiss Banking crisis.
https://www.chenavari.com/assets/Uploads/97fc21b1ee/2023-03-Lyxor-Chenavari-Credit-Fund-Positioning-and-Performance-on-Monday-20-March-2023-v2.pdf
I did read this article at the time, thanks for posting. But for me nothing in it pointed towards a 10% drop in SP, in fact it showed an insulation against any impact, also currency movements this year have not figured such a drop.
If there was any sort of Swiss AT1 impact, I would expect the kind of drop and recovery as SMIF at the same time, not the kind of dismal downtrend we have seen since February.
Anyway.. The latest NAV is out, finally, which with respect to the current SP I expected it much lower, but is more like the kind of level expected after reading that notice.
FEB SP €51, NAV €65.77
JUNE SP €44, NAV €63.60
IMO this points to some sort of seller, forced or cashing in to counter losses elsewhere maybe, who knows, but this is a hold, and continue my DRIP.
I noted that TORO (and FAIR, and also SMIF) were some of the few shares within my portfolio in positive territory during yesterday.
Cheers and GL.
Hi Gavster-NBC, hope your well/investments doing well.
As promised I've dug out the post that I summised from, below.
I don't recall you posting about the CS meltdown and impact on TORO at the time, maybe on another board, so I can't (didn't) respond to such. With regard to your 'bad taste' with regard to being under SP, even with DRIPS, aye, it never feels good, but I do think it is part and parcel of the beast, and you have to accept such in a considered manager. By example, my first stock in this arena (BGLF) was SP negative throughout the first 4 years I held it, only going SP positive for the first time in January this year. It is currently SP negative 10%. Mindful of Captain-Value's valid question (is this just repaying capital), that holding AFTER current SP loss has generated about 10.5% a year since acquisition, also after the Initial 5%ish purchase spread loss, and the approx 10% strengthening of stlg to the $ in the last 6 months.
As for your perspective that at current SP it represents 7years of divvys , I do think, that's how you have to think here, and to that end, from a pessimistic view you have to consider, will they continue for 7 years (yes), and from an optimistic view, if they were to only last 7 years, how much of that NAV discount will be unwind into returns, as the contingency for delinquency of the underlying loans is unwound, expires? (To this end you only have to look at FAIR's realisation shares (FA17), and their SP against FAIR's SP, SA17 holding only historic loans winding down, and with such extinguishing the liability/risk whilst realising the embedded value).
I keep banging on about it, but TORO and it's ilk, aren't for a trade or a six month buck, you have to hold for 5 years, and not ignore SP fluctuation, but neither be overly focused on such.
I do think they've taken a recent hit, got it wrong, but by the same sentiment, in the time I've held them (4,+ years) they have also spectacularly outperformed in the odd year, but throughout they've paid a handsome consistent dividend.
Increasingly I feel the Spanish property loans are dragging this (it's 15% of the portfolio that isn't performing/contributing) but on that I personally am happy that they are (slowly/patiently?) managing to a break even, which if achieved, will remove a contingency, realise funds for reinvestment in performing loans/ and or distribution.
Yes, they've missed a beat lately, but they still tick all my boxes.
It's the first 22/03/23 media post I referenced -
https://www.chenavari.com/press-and-media/