Member Info for Redtom

JackDawr, looks like you are right and have got a decent re-entry point.

Interesting development over at WHR. Kinda shows that bids well below NAV are not always successful as another bidder can smell a profit too.

Still think an offer is being considered (by whom - I have no idea) and maybe my previous estimate was a little low. Maybe 60-65p is more realistic.

I suspect the recent positive activity is a sign of an offer in the making.

Whilst NAV is around 75p, I expect an offer in the 55-60p range.

We've recently seen other ITs go at at a discount (eg WHR) so this is likely here too particularly with valuation concerns over the London property.

Anyone any thoughts?

You're being rather pedantic. It is a done deal. DD is complete. Revised offer made and board will recommend it.

Only possible change would be if some other buyer came along but this seems highly unlikely at this stage.

Then again, what do I know. Drops from 80p to 71p in a week! I give up trying to predict this one. Something strange going on in the background possibly.

That's a rather naive view me thinks. CHS is definitely not a '1' nor '0' and sits somewhere in between. Baking in risk is what markets do and it seems that they have baked in risks that have knocked of 30-40p per share from its high (which was probably too high anyway). The huge discount to NAV protects further significant falls. Nice to see a 10% jump over the last week or so.

Lucy, given the SP has fallen from around 115p to 73p over the last year or so, it seems difficult to see much more downside given the NAV and ultimate discount. Its gone from a 10% premium to a 35% discount. All known risks look very baked in. Why do you think that they are not?

Lucy, genuine question.
Given the SP is pretty much at its all time low (around 70p) do you see much further downside?
It seems to me that all of the risks that you highlighted are baked in? Yes, no?

Yield is currently 13.03%. Crazy value IMHO

CommandoKai,

Yes, you are right. I don't hold funds so my charges are reasonable. But holding funds is expensive with HL. I had forgotten that.

When you say sky high charges, £200 max a year is not a lot for holding a large SIPP portfolio. Maybe not the cheapest but not bad value.

HL are always good at paying promptly and they get the withholding tax right too, ie none if in SIPP.

Based of current fx rate and SP, yield is 12.7%. What a bargain.

Anyone know what just happened? 86 to 71 in a few minutes!!

Still waiting for mine to hit my HL account. HL are normally very good so it may not be their fault. Hopefully see it on Monday

Ace, sorry but I can not agree with you. DEC's hedging policy (irrespective of fall or rises in spot) is the reason that it can borrow from a consortia of banks and consistently pay a very high dividend.
It is so easy to say 'I wish they hadn't hedged so much as we could sell at spot'.
But DEC's whole business model is to secure income well into the future.
Management is very wise and this is why we benefit from this cash cow which is providing a very stable dividend and share price in an increasingly volatile time. And it will continue to do so for years for the same reasons.

I don't believe that DEC will have a US listing any time soon.
This is their official response:
"Regarding our public comments on a U.S. listing, we said that we continue to explore this option but haven’t announced definitive timing. We anticipate figuring out by mid-year what we need to do to get the process rolling"

bluesy1,
But this share is the definition of boring and predictable. This company does all it can to minimise risk to ensure that its cashflow is as certain as possible to allow it to run the business, pay down the debt, pay substantial dividends, reinvest for the future. You really should not expect anything but very modest movements in the SP given this yields 11-12%. With this steady yield I would be satisfied with a 4% fall in the SP every year as the total return would still be 7-8%.

Even though gas is considered a 'transitional' fuel in the climate debate, many investors (particularly big funds) will still avoid it like the plague on ESG grounds.

Unloved as it may seem, it is still a little income generating gem imho.

Whilst I appreciate that the whole market is nervous right now, CSH is looking extremely fragile. Do you think there is something new about to jump out of the woodwork? A sub 90p SP indicates that all is not back to normal. This is a large discount (circa 15%) whereas there was a 10% premium when this blew up last autumn. Something not quite right me thinks.

Wednesday's Trading Update should make interesting reading.....

PART 2
This is before mitigation and according to Billboard there has been an uptick in consumption of Young’s music as a result of the publicity, with his reputation enhanced for taking a stance on an issue that costs him money…it is even possible that any short term direct impact is more than offset by higher than expected revenues from other sources.
Being permanently off Spotify could have an impact in terms of the value of that catalogue, but his fan base will still find ways to listen to him and with the catalogue probably no more than 2-3% of overall NAV it would have minimal overall impact given the revenue mix from that catalogue. And it is possible that higher consumption of his music elsewhere as a result of his now higher profile more than offsets any loss from Spotify. It has also been suggested that SONG’s 50% interest does not give Hipgnosis much say in how to use Young’s music to generate additional revenue. Yet this is clearly by design given that Neil Young is uncompromising about how his music is used, and this would have been reflected in the acquisition price and the contract that SONG signed with him. However, even where SONG has full copyright control and owns 100%, it has built its reputation on being sensitive to how the music is used…and this is why artists are happy to partner with Hipgnosis even if it may not offer the highest price.
Our live NAVe for SONG is $1.725, or 127.3pps. The shares have weakened recently and at 115.6pps (@9.00) are trading on a discount of 9.2%. This is a substantial discount to Round Hill Music which is trading on an estimated discount of 2.6%. In our view the rating of SONG is unjustified based on the quality of the two portfolios and, to the extent it is the result of concerns about the financial impact from Neil Young, is, in our view, totally overdone. Thus we see current weakness as a buying opportunity and reiterate our Overweight recommendation.