Member Info for steph

https://www.marketbeat.com/stocks/LON/GROW/price-target/

GROW Consensus Price Target:
GBX 666 Today
GBX 666 30 Days Ago
GBX 627 90 Days Ago
GBX 685 180 Days Ago

I'm confident on half yearly we will get broker upgrades nicely beyond what we had 180 days ago pre covid. Unless there is a general market collapse I don't see SP below NAV per share beyond half yearly results and I'm expecting a circa 20% boost to NAV/share on results so 660 within 2 months.

Markets holding well in spite of idiots at the helm in USA and now UK. Just because our idiot can string a sentence together and speak a few words of Latin does not make them of a different cloth. Ours is just a more sophisticated cloth who you could imagine having a reasonable dinner table conversation with.

This Trumpian signaling by breaking international law is not governance but maybe as Boris says just a tactic. Stupid tactic though. Just makes us toxic on the eve of needing a large set of new international treaties.

Eu letting city of London off the hook and allowing clearing for a couple of years regardless of UK shenanigans and even no deal is good news. At least there is an adult in the room when Boris throws the toys out of the pram.

From an investors point of view I don't believe we will crash out. Some awful deal will be agreed at the last minute and the downside of that will be a long slow process not affecting GROW much in the foreseeable future. Indeed Dominic Cumming's vision of a subsidized high tech UK sector benefits GROW and we can expect market boosting announcements to come out.

Stupid because within the common market we were growing our high tech industry faster than any other EU country and had the highest proportion of inward investment in the sector plus we and were protected from state aid assisted retaliation from EU competitors.

Still high tech is so borderless naturally in or out of common market might not make too much of a difference to GROW plus GROW spans EU and so is a diversified bet regarding Brexit problems.

I would not want to be a worker in a car plant in the midlands though but hey they voted for Brexit so they had it coming. Never has there been a greater need for us all to be informed citizens. Twitter and facebook have given snake oil salesmen a platform they have never had before and until the new normal settles in we will have chancers successfully rise to the top promising anything to everybody.

looking back at NAV/share and SP on the day of year end the following emerges:

April 1 2017 NAV/share 108 SP 350
April 1 2018 NAV/share 253 SP 500
April 1 2019 NAV/share 510 SP 500
April 1 2020 NAV/share 545 SP 320 (which has risen to 530 as of today)

As you can see SP started in 2017 at 3x NAV/share then 2x for 2018 and for 2 years 1X (or worse if you only look at April 1 2020 in the middle of the COVID panic).

Is this deceleration of SP relative to NAV/share really justified?

Given that we have fabulous growth prospects of 20%+ NAV/share growth year on year SP at Nav/share seems a tad conservative. Surely some future growth should be priced in by SP having a premium on NAV/share. Then there is COVID 19 panic catch up as well.

I topped up a bit this morning but largely out of ammunition to do any more. Roll on half yearly results.

Topped up a bit.

Anything below NAV/share good for me given I think that within 2 months we will gat a NAV/share upgrade due to regular 10% NAv/share half yearly results plus some catch up to the overly conservative valuations made in the middle of the COVID 19 panic March 31 2020.

No deal or chaotic minimalist deal Brexit weighing down on UK shares relative to other markets. Maybe 20% effect. GROW not directly affected by Brexit but still suffers from general background market sentiment.

I don’t understand the benefit to the UK of Johnson threatening to break international law and the Anglo Irish peace treaty. Johnson seems to be in perpetual campaign mode with emotional signaling using legislation to his Brexit audience within the party rather than governing with an 80 seat majority in a centralized state. The buck stop sat his desk nowadays even if he has not noticed that.

Trade negotiations are a bit like COVID 19. Bluster is not governing. In the end the virus progresses regardless of the wishes of those in power.
Trade agreements are by definition between two sovereign nations and no progress can be made without compromise between them. They require delicate compromises sensitive to the sovereignty of others.

I fear Johnson is a throwback to the gunboat sprit of 1840 rather than the blitz sprit of 1940 he so often self refers. IN 1840 we simply told the Chinese what their trade agreement was to be with us and when they said no we just shelled them until they said yes. Easy to "negotiate" when your gunboats are militarily superior and you are willing to use them. In that "trade agreement" we insisted the Chinese allow us to legally sell massive amounts of opium we produced in India at great profit to ourselves and staggering social cost to the Chinese.

The Chinese remember that trade humiliation even if we have forgotten it.
The Americans under Trump are trying the forceful diplomacy of the past. Even for a country with a military as large as the US I don’t think it gets them anywhere so the chances of this jingoistic UK approach to relations with sovereign equals being successful is pretty low.

I've topped up recently even just above NAV/share. Might do a bit more.

With the printing presses a printing , the tech sector a soaring and cash from portfolio sales a rolling in our pessimistic covid 19 affected NAV calculation dated march 31 2020 will surely get a major correction on the half yearly.

Pure UK shares will continue to be affected by Brexit mess but the impact on GROW limited due to sector and EU wide exposure. Still the best share I can find.

https://www.lse.co.uk/rns/GROW/forward-share-sale-of-zynga-inc-stock-etwsrfz4gqzxkgj.html

Always good to bank profit.

https://www.bloomberg.com/news/articles/2020-08-22/dot-com-survivors-give-their-verdict-on-the-current-tech-boom

Same as we are doing here with GROW. Large tech firms have a lot of future growth priced in. GROW's portfolio does not -especially those with valuations based on 3.2x earnings.

Apple with P/E of 37 and dividend cover of 0.66 is many many times more expensive compared to GROW portfolio. Too many times for my money.

Over 10 years I'm confident GROW will outperform any major tech company never mind the tech index.

Last year there was a half yearly update on the 28th of October that commented on valuation of portfolio projections. This was followed a month later by the half yearly results which gave a precise valuation.

So just over 2 months to wait for some official guidance on post COVID crash valuation of portfolio.

It's a mugs game to predict small short term dips and spikes but for my money I'll top up if this dips from here.

GROW, along with the sector, has a portfolio of companies that on the whole have not been affected negatively by COVID and some important ones have grown faster. The 12% dip in valuation on March 31 2020 compared to the half yearly projections was not warranted. It will be corrected, either in whole or in part, on the half yearly results in late November 2020 on top of the "normal" 10% half yearly NAV/share growth. So good news coming.

thanks

Seems like we have reached a stable level until the next bit of good news comes along. Of course some individual fund can push this up or down if they adjust their holding but that is as random and unknowable a risk/reward as one can get.

The good news will be the half yearly results in November, at the latest but some individual portfolio news and maybe some more broker upgrades might nudge us in the meantime.

I doubt if we will be much affected by minor ups and downs of the general market much over the next 3 months. We seem to march to a different drummer.

I expect the general market will strengthen as we get closer to being vaccinated. I also think a Biden win in November will boost markets rather than hurt. Of course Brexit hurting UK markets and the risk of no deal or some minimalist deal very real.

Boris not postering on walking away from divorce settlement. No deal now means divorce settlement payments (many of them already made through transition period anyway) and no "trade" deal. This is very market stabilizing and the wilder reaches of the ERG are not agitating on the point. They are getting a harder Brexit than any of them might have dreamed of and they have enough sense to shut up when they are ahead.

I hate UK not achieving as a minimum a good zero tariff trade deal before exit but it is survivable for UK PLC. I'd love to see a "stand still" deal that covers services and product standards as well with UK able to diverge from that on demand (which we probably never would). So in effect Norway with a escape clause in case the Americans or Chinese make us an offer we can't refuse.

Boris could argue that we have achieved sovereignty even though year on year we would chose to align ourselves with EU tariffs and product standards. Storm in a teacup after 4 years of market uncertainty but Brexit never was about practical alternatives to what we had. It was always emotional.

If Brexit gets sorted in a half decent way the market likes the UK market, pound and UK property market will all correct upwards. It might then be a good time to have a modest holding in UK builders. For now I'm a pessimist but not in despair on Brexit. I think we might have something pretty hard and economically sub optimal but not chaotic. Damage only to GDP growth rate by a half to 1 percent or so pa over the next 20 years. We had it good inside EU. We got the lions share of FDI. We were crushing the EU financial centers. We led on R&D and culture and creative industry. Americans and Commonwealth not exactly rushing to set up some equivalent deal that gives us the same advantages.

Now we have an SP that equals Nav/share where do we go from here?

It is not quite as much a short term one way bet as when we were sub nav/share but

1) as Fib points out there is SP growth to sector norms of a 20 to 25% premium of NAV/share.
2) As I hopefully pontificate we got a very conservative NAV valuation dated March 31 2020 in the middle of peak pandemic panic that will be corrected as early as half yearly results for end September 2020. This correction is in the order of 12% on top of "normal" half yearly NAV growth.
3) about 2/3rds of he weighted portfolio does not have recent sales to establish the asset value. When this happens valuation is based on 3.2 x earnings . Seems to me although 3.2 is benchmarked, I imagine, against infrequent sales. This outcome is below global sector norms and a bit silly on the low side. Long term potential to rebalance towards US sector norms once valuers (and behind them investors) get comfortable with EU private sector tech stock. So lots of SP growth over 10 years on top of 20% GROW have already penciled in based on 3.2 remaining steady.
3) Whole sector booming and growing fast. This is not reflected in our SP yet. Over time we will get an SP that reflects future growth but not yet. GROW got ignored due to problems elsewhere in the UK sector down to over valuations. I think we have the opposite problem which is a nice problem to have. This is not a bunch of dot com firms with "burn rates". These are fast growing private tech companies with profits. Noting wrong with a burn rate if you have a fantastic product (TESLA got to be one of the worlds largest firms without profits) but still nice to have profits never the less. Less risk for us investors if diverse private sector high tech portfolio already proving it can make money (rather than "just" great ideas and business plans).

Anyhow I remain all in. Can't see any other place to go where I am equally confident of 30% SP growth (even from 577) over 12 months and 20%+ after that for years. Just hope we don't get bought out along the way. I've got a few airline, bank and other tech funds but nothing with any size or conviction.

Agreed

Nowhere else to go that can get a better or lower risk return

I’ve pencilled on 30 % growth over 12 months even from 555 due to revaluations upwards of NAV and then 20% pa from there for a while .

Yes I only have a few big tech like polar. grow well positioned as we ease out of Covid Crisis but with loose money for the foreseeable future

Long run loose money will inflate all assets including stocks and land.

Now that governments have so much debt they will be in no hurry to get central bank rates back to 3 or 4 % and won’t mind a bit of inflation as tax take goes up with nominal inflation.

Yields can get very low on assets. Rural land in Uk already around 1%, many other asset classes to follow.

I’ve never done gold. At least with stocks or land there is a rent or profit to be had no matter how low.

Also worried about new mining technology dramatically changing supply of all minerals.

Can't see a better bet.

I'm worried about a correction of the general US market but no so worried I am not fully invested.

Money printing will continue and good vaccine news will start to kick in by October. Yes markets high given GDP (but not FTSE) but where else can money go? It's got to find it's way into stocks.

I think there has been a step change in the long term interest rates and thus a related step change in long term acceptable return on capital on stocks of P/E.

thanks

a very small barc and Lloyds position and not beyond 2 years. Can't see where their growth will come from after they rebound from todays chaos. So just a rebound play.

Starling sounds interesting. I'll start a small position in that.

I've got small positions in Frontier IP, Merian Chrysalis INv, Novacyt, Biotec Growth, Scott Mortgage Inv trust and Polar Cap.
None as conviction a buy as GROW, even at 530, but monitoring them and might diversify substantially in this direction if I feel GROW ever outruns it's short term value. Not likely to do so for a couple of years.

Of course GROW could always get a take over offer and we will all be shareholder refugees looking for a place to go.

Consensus Price Target: GBX 666 with Jefferies raising 12 month price target today consensus forecast rises nicely. We are still a long way off consensus forecast -which I think will get raised substantially November on the half yearly results. By this time next year I expect 750 or better. This assumes Trump gone, Brexit in some stable outcome however suboptimal, and covid under control one way or another. Those 3 big black swans pushing down pretty substantially on UK listed shares right now. So even partial solutions quite helpful. We are not at peak uncertainty but we are certainly for my money well below the long term trend line of general market uncertainty vs stability. Some general UK correction inevitable at some point given ultra low interest rates for the foreseeable future. I have even started buying a few banks (Barc and LLoyds) and builders (redrow and bellway)as I think they have been battered about enough and a 50% rebound over 2 years now quite possible. Not as strong a conviction buy for me as GROW, which I hope to do the same more probable 50% over the same 2 years, but it is nice to have a tiny bit of diversification. So small punts.

JEFFERIES RAISES DRAPER ESPRIT PRICE TARGET TO 683 (617) PENCE - 'BUY'

https://www.irishtimes.com/business/technology/draper-esprit-makes-18m-after-sale-of-transferwise-stake-1.4316476

https://thenextweb.com/hardfork/2020/07/29/transferwise-draper-esprit-stock-share-sale-insider-secondary-funding-round-5-billion/amp/

Martin Davis has acquired 2,132 Ordinary Shares at a price of 522 pence per share. Mr Davis's resultant interest following this purchase is now 2,132 Ordinary Shares, representing 0.002 per cent of the Company's issued share capital. Ben Wilkinson has acquired 2,871 Ordinary Shares at a price of 521 pence per share. Mr Wilkinson's resultant interest following this purchase is now 8,475 Ordinary Shares, representing 0.007 per cent of the Company's issued share capital. Stuart Chapman has acquired 2,000 Ordinary Shares at a price of 520 pence per share. Mr Chapman's resultant interest following this purchase is now 1,346,306 Ordinary Shares, representing 1.132 per cent of the Company's issued share capital.

https://apnews.com/93992cd1e9c241449da599ea06a2fc33

helpful on valuations

Seems positive to me.

I have been looking for a share that can achieve 20% sp growth for 10 tax free years in my ISA. That turns a theoretical ISA position with compounding into tax free millions.

https://www.investor.gov/financial-tools-calculators/calculators/compound-interest-calculator

I was all into a UK builder called Telford homes which I thought could achieve at least 15% sp growth year on year and maybe 20%. That is doubling every 4 to 6 years. I think they still will but they went private and threw small fry like me out. GROW open to small fry and the only major way into the EU SME high tech private pond which is expanding in value overall at over 20% pa.

Telford was operating in a London new housing market that was much larger than the company with high barriers to entry (planners and complex deals to get land) so could conceivably grow at that rate over 20 years without outgrowing the pond. Was also an indirect bet on the economic trends that favored property in a growing knowledge economy. Bit like selling gold panning hardware to all gold panners rather than panning directly for gold. Fa

I believe the clearly stated guidance in all GROW results. That means 20% SP year on year growth without any change in the valuation methodology (3.2x earnings), or any re-pricing of SP vs NAV/share or any COVD 19 panicked valuation correction in November 2021 on the half yearly results. SO quite a bit of spare gas in the tank. GROW for me is a direct bet on the knowledge economy trend albeit through a trust that is stock picking. Bit like investing in an agent who picks only the best and most successful gold panners offering up essential finance and hardware. Barriers to entry high as you still need to be on site and evaluate the many, many gold panners with high hopes.

With compounding that takes a 100,000 to 149,000 in just 2 years. Due to the three big re-pricing factors I think it will be a bit better than that.

A big black swan affects GROW less than UK only shares and I think is smaller black swan that reports say. In spite of no deal talk on Brexit I think the government is drifting towards a compromise where we will be in some form of zero tariff and quite a bit of free trade on services style regulatory alignment satellite status but able to go for a harder Brexit if the opportunity to do some fantastic free trade deal with USA or CHINA emerges (which it will not). The ECB oversight for the alignment will be replaced, as a face saving gesture to the UK by the EU, by an equivalent binding arbitration body (probably with many of the same judges on it).

Trump often stated as good for shares but having the pro print money, pro stock market polices of TRUMP without the trade instability and rhetorical baggage is kind of ideal. Step forward Joe Biden. Joe will not set the world afire but he is a safe pair of hands and will help keep the general investment environment stable so GROW can grow. 4 years of sta