Member Info for CaneToad

I think PTAL is in a totally different league to a Canadian producer. Just look at PBR, which trades at PER < 2, even though it pays a gargantuan dividend. It's been that way for a very long time. Some would say that the risk in PTAL is greater than PBR.

I'm not convinced that increasing the dividend will do anything - at least not for Canadian investors. For a Canadian story, look at Pipestone, which has been smashed after pivoting away from growth. US/Canadian investors seem to have no interest at all in dividends.

Lack of liquidity. As bonkers as it may seem, it could drop a lot further. I gave up reading all the bull market stories about how the lack of supply will support the oil price, yadda yadda. It is what it is. It's dropping, for whatever reason, maybe fears of a recession, maybe not, who knows and is that even relevant?

At a guess, the insanity might mean a price of $60 within a few months or a few weeks! I think that's far more likely than a rebound to $100 any time soon, given that the price has now been more-or-less falling for 6m.

FYI. I'm long I3E and will stay that way, but I am not deploying all available gunpowder now, because a big drop in oil is likely to mean a corresponding big drop in I3E and I'd like to buy more if that eventuality arises. Without a doubt, some will respond with anger and peddle an alternative story that the I3E share price will 'sky rocket tomorrow if only they increased the dividend by 10% or some other fantastic story.

@Lucy: I'm happy to listen to any proof that you have regarding CSH being a fraud. I'm open-minded to the idea that I'm wrong. Do you have any proof? How did they rig the independent IFRS property valuation to increase if the properties are genuinely worth only 1/3 of what they paid? I don't see any evidence at all. ShadowFall has thrown mud at lots of companies and most hasn't stuck.

I agree, there are some very odd looking things going on with HOME. But that's a different company.

Ov er 2-3y, I am receiving a 9% annual dividend, with a HUGE margin of safety in the NAV discount and the potential for a 50% capital gain. NICE!

@LucyDS: Why I think you're wrong here:

1) There's been a new 'Independent IFRS property valuation increased by 5.6% to £999.5 million'
2) Banks have lent against the property value
3) Fitch Ratings of "A" secured and "A-" unsecured

So do I believe some random person on a chat board, who's probably got a short spreadbet on Civitas, or the above?

Good luck!

Does anybody know if Hargreaves Lansdown have the same problem? I don't recall seeing any tax deducted from other dividends in my SIPP/ISA, but I've not held TGA before.

Excellent results, an amazing discount to NAV and extremely attractive dividend while we wait for re-rating.

So what exactly is a 'Royalty Partner'?

Is it like a company issuing multiple bonds?, e.g. Aviva has >50 bond issues. If so, then it is super-concentrated as I thought, because e.g. if Avia were to get into trouble, all of the bonds would be hit. FYI. I not saying for 1-second that Avia would ever have that problem.

One more question: what happened back in 2015? Presumably there was some debt/equity swap, where shareholders were wiped out? If not, why did the share price drop from over 1,000p back in 2012, to 36p ?

One thing that I do not understand is the distinction between their two statements:
'13 Royalty Partners' vs 'exposure to 48 underlying operating companies'

They list the portfolio breakdown by sector (13 again):
Industrials - 5
Business Services - 4
Healthcare - 3
I.T. services - 1

But I don't see any mention of the portfolio weight breakdown, i.e. what is the biggest single exposure?

@baf3: thanks for the detailed info. Maybe I'm looking at the wrong thing, but on their website, they say they have '13 Royalty Partners'. I'll dig into the portfolio more.

I guess my first observation here is that this is a very concentrated portfolio. All you'd need is 1 or 2 of the companies to have problems and the share price is going to take a massive hit? i.e. the 'royalty' would become worthlesss?

The yield is very attractive, but in the current market, you can get similar from Legal & General and 10% from M&G, which are both FTSE 100, while DUKE is an AIM company... The risk here looks closer to one of the high yield bond funds (e.g. TwentyFour or BlackStone), but those are super diversified and offer a similar or higher dividend, so I don't see anything compelling here.

I'm happy to be proven wrong, because I've only done rudimentay research.

@Carcosa61: I agree with the sentiment of what you're saying. But your conclusions should be obvious from the 8% yield on offer... If you're looking for a very low risk investment, the yield will be around 3-4%. If you're prepared to take on higher risk, you'll achieve a higher yield. It's all about risk/reward. I'm not yet decided whether or not to invest here myself, because there are other, more diversified and higher yielding trusts....

"The problem oil companies are currently facing..." is that windfall taxes are popping up like moles and it's impossible to whack them... The UK has effectively nationalised oil companies. Europe has followed and some people believe that Canada will as well.

I wish people here would cease saying things like 'this is sure to go up tomorrow', 'if only we had a slightly bigger dividend we'd sky rocket', 'we are so cheap compared to peers', etc. which will change absolutely nothing. If you had shares in Petrobras and were receiving 40% yield, but still on a forward PER of 2, you'd know what I mean.

@LucyDS - you're funny and very predictable... in the meanwhile I pickup close to 10% yield for doing absolutely nothing. Send it down lower if you want, so I can pickup more!

@Banburyboy: "Anyone know why the government favoured a North Sea only tax ( EPL) over an increase to the corporation tax and supplementary (40%) ?"

This my understanding.

There are double taxation treaties, meaning they cannot tax them twice. e.g. There is currently no way to tax them (Shell, BP, etc) on profits from another country, such as the USA, without having the international tax system fall apart.

If what Bloomberg is saying is correct, Shell has just announced that it is selling several North Sea licences. I expect they want to keep the strategy tight-lipped so as not to depress the price of those assets too much. On the other hand, they need to urgently send a very clear message:

https://www.bloomberg.com/news/articles/2022-11-25/shell-said-to-be-selling-stakes-in-uk-north-sea-oil-fields

This will hopefully send a very strong message that the WFT urgently needs to be revised or investors WILL disappear and this broken government will be paying even higher energy prices from US oil/gas imports. Let's hope that others follow. I do not support HBR spending another penny on future UK developments while the tax is 75%.

However thorough the analysis, almost everything rests on the WTI price and that is looking like it could be heading towards $70, if it breaks below $76.20. Hopefully OPEC will cut production further to prevent this idiocy.

Thanks for the spreadsheet and calculations Tony and the extremely useful answer. I must have misunderstood your original answer.

"What would be the percentage of FCF after a 10% drop in oil/gas and everything else unchanged?"

I didn't see an answer... So if it's already 52%, then I guess (finger in air) we could be looking at 60+% of FCF after a 10% drop in oil? That sounds unsustainable.

Talking about a re-rate in the current environment is pure fantasy.