Excellent bit of research there agricore.
I agree with you entirely on valuations of fintechs. It will be along time before it is fully wound up.
I find it difficult to believe that by next year we wont be in a normalised market. Hence better valuations.
Also the interest charged by VSL has risen from 10.5% to 13.8% with no increase in the dividends.
I assume that will change.
Krustysmegma
Latest ùpdate.
Good but not great.
I think we have to say good bye to the foreign exchange benefits.
The opposite from now on.
Well probably anyway.
Action will of course save the day. As it grows it will become a bigger and bigger part of 3i. Increasing it's nav accordingly.
When the market normalises I expect it to go to 30% plus premium.
And HGT to at least hit par
FALCONER-FLYER
48p is an excellent price.
Tasty dividend and great share price growth.
I am only just in profit. At the moment up 7% (today)
Edit 7.5%
Happy to sit this out, as in wait for what appears to be an inevitable share price gain while enjoying a very good dividend.
I emphasise appears to be inevitable share price gain, not a certainly.
Seagull
"Really, 9% is stretching it for a safe bond - maybe junk but not AAA"
No safe bonds low risk maybe.
I bought some 12% 2027 ipf bonds.
Definitely junk?
The company is doing very well. Excellent even. Paid there previous 5 year bonds during COVID.
Junk? They lend to subprime borrowers. More or less doorstep lender. Albeit not quite.
Fact, far smaller increases in defaults from subprime borrowers (consumers not companies) than prime. Your average prime borrower is in debt up to their eyeballs! While the subprime ones don't get to borrow much in the first place.
Even today emerging market bonds have higher coupons than developed market bonds even when the country has proportionally minimal debt compared to developed. The latter has been recognised but has still yet to fully come through in prices.
Ask Bruce Stout of Murray International. Still able to buy some emerging market bonds but no where near as good as in the past.
Excellent update (from you)
I hold Augmentum. It does appear to be very undervalued BUT most in the capital growth sector are on even greater discounts. (It's hiding in another sector).
Either way I have already decided to hold on for at least year and see how it goes.
Thanks for the update.
Strategy
My opinion in answer to a similar question by Nigel50
19 Jun 2023 11:22
Nigel50 "Is this a slightly weird situation in that higher interest rates are good for LGen but if you can get 5% risk free on savings accounts/bonds, why would you buy ? And with interest rates going to rise, presumably this will get worse for the SP/despite being better for LGen."
Time lag is the basic argument.
The higher interest rates will allow them to replace bonds that have reached redemption with bonds that pay much better interest rates.
4% instead of 1% (example only)
More importantly is the government plans to reduce the amount of bonds they have to hold and replace them with infrastructure and housing (rental income).
Far far higher returns.
Now during COVID some of the bonds they held had their credit risk increased (investment grade company bonds) resulting in a £900 million loss BUT only if they sold them or there was a default (there was none).
So the £900 million was a paper loss as LGEN don't sell bonds they keep them to redemption, at which time they get the original price £100.
Now infrastructure and REITS are bond proxys, so they too have taken a kicking but the same applies as in they are only paper losses (if held by LGEN)
All that's important is the income received matches the requirements of the pensioners.
In fact due to life expectancy NOT increasing at the rate expected LGEN is removing money most years from the annuities pot.
Alas it could be quite sometime away before there is a significant increase in income.
re: new ceo?19 jun 2023 22:20
perhaps you could red back a few pages and identify his poor behaviour. until you do that you can remain blissfully naive of the character you seem to laud."
"perhaps you could red back" excellent english...for the ******ed!