Member Info for Couerdelion

I've noticed the spread between PHNX and LGEN has been widening again to a similar position it held before PHNX went ex-div. Put simply you can sell PHNX and buy LGEN for a 5% dividend uplift if you can get the sequencing right.

Solid presentation and the materials will probably be on their site - I'll post the link to the recording when I get it.

Meanwhile there was a write up by ST in IC - https://www.investorschronicle.co.uk/content/e3a31629-a4fa-4245-ac60-c9d21bbd3367

Perhaps we'll see a little profit taking here now but I'm happy to let these run and will let the analysts increase their targets in due course. 600+ before I'll take any profits.

Did anyone see a notification of an Investor presentation?

Can someone else confirm for me that the company here is "cash profitable" for HY25? I've been digging around the RNS and this is the conclusion I have reached but can't quite build the bridge to the accounting profits.

Thx

If Guident were to be valued at $100m, this would roughly double the NAV of TEK and, all things being equal, would double the SP of TEK. Arguably some of this is already priced in so maybe we should go back to the "pre-RNS" discount to NAV which means we'd end up with an SP of 14.5p.

Now we could argue till the cows come home that the discount to NAV should narrow but no one has managed to explain to me why it is so absurdly high and without understanding why it is what it is, I see no reason to trust to wishful thinking that it will magically reduce. We're valued here at less than wind-up valuation so the market clearly isn't happy about something despite the recent uptick in the price.

For the record, I took some profits a week ago - that's a measure of my confidence in the governance here.

My 140p prediction now looking quite foolish - my only consolation being that I wasn't so foolish to predict 160p ;-)

Mighty tempted to make a little top up at these prices.

Stas, I think you are missing the point - "If it either holds onto its full current holding or part-sells, reinvesting the proceeds into some new AI venture...". This scenario would reinforce the "jam tomorrow" narrative which is one of the key reasons why the SP trades at such a large discount to NAV. The share price would naturally drift down as the prospects that shareholders might get a return recede ever further into the future. Combine this with lax corporate governance and you can perhaps understand how the valuation sits below the company's break-up value.

I don't see any way for management to dispel this without give some return to shareholders soon - dividend, buyback or tender.

It wouldn't surprise me if they were aiming to complete before results but it won't make that much difference if it's by end of year either as trading in mid-to-late December would be very thin.

That's why you try to fit shares like LGEN inside the ISA hold more growth-oriented stock in a general trading account for a 9% lower marginal rate of tax on gains. But you'll want to use a large part of the basic tax band in dividends where tax is 9% - compared to 18% for CGT.

That feels massively overoptimistic, Sirmark. Short of some quite dramatic rerating event, I don't see anything which would narrow the discount to NAV which is the main reason the shares are selling so cheaply. Even with the imminent promise of a very profitable IPO, the SP has only just returned to levels we've already seen this year.

I think the confusion over the term "profit" is mixing up two concepts - cash and value. Most things lose value over time but others generally appreciate and it would be foolish not to consider those gains as profit simply because you don't have them in cash. And how would you possibly manage a share portfolio is everything had to be marked to book? Would you depreciate a share when it paid a dividend (or perhaps on ex-div day) or would you treat the dividend as profit when received. The cash view becomes particularly tricky over time in the case of LGEN or perhaps when a company pays a special dividend worth over 50% of the SP. And the shares you've just sold for a 20x gain after holding for 30+ years? Was that a sudden windfall profit even though the shares have been flat for two years?

Any value held in shares is going to be at risk whether you bought yesterday or whether they are valued at 10x purchase price. But it's still the best way to measure for what you have and generally can be converted into cash at any point of your choosing - just keep a separate tab on the cash balances.

Of course if you have an extremely low tolerance for risk, don't invest in shares. But generally, over time, those LGEN shares will comfortably outpay a portfolio of premium bonds.

I'd be quite surprised if this doesn't get past 250p by the end of next month. Haven't really decided my next selling price though 250p sounds a nice round number to collect winnings so I'll leave that as a market for now.

Time to take a little profit, methinks no that my little sub 110p top-up has done its job. Still plenty of room for these shares to run.

I can name several recommendations of his in the last two years where he has repeatedly given a buy recommendation only to change it suddenly to a sell at a point where the SP has fallen over 30%.

With regards to TEK he focusses on the NAV discount but barely touches on the history of cashflows between investors and the company, or on the lax governance in a business that has still to explain how the CEO managed to acquire around 7% of the shares in GNIP before that IPO.

Not that I would disagree with him on this particular call but I would add a pinch or two of salt (micro even?) to those recommendations as I don't think he has a strong handle on the culture or history involved.

The key benefits of buyback are usually hidden and since people don't always see an instant increase in SP they assume incorrectly that they have no effect. Of course they do reduce the MCap because the money is spent but since the share count is also reducing the gearing effect should mean that the SP is pushed higher resulting in higher dividend per share and/or higher NA per share - but it could work in the opposite direction if the share is overvalued. A company growing earnings at 10%, and with a buyback worth 5% of the MCap will see EPS grow by 15.8% p.a.

Presuming that earnings growth is just 10%, then a PE of 10x gives a PEG ratio of 100 which is a good buy signal for me. Consider also that £25m of buyback will reduce the total share count by c8% based on today's close, and we then have EPS growth of 18% and a PEG of 55.5. With fairly modest assumptions, you can easily get to a valuation of c£550m.

Looks like the Board is turning green again. Usual warnings apply - don't go in.

I can't see how these numbers could do anything but inject a little positivity here.

Took the opportunity today to buy a few more from the proceeds of a sell 3 weeks ago. It could go down more but I never care for picking the bottom of the market but I know that 5p is cheap so there you go.

Now just have to wait for those positive RNS releases....