Proposed Directors of Tirupati Graphite explain why they have requisitioned an GM. Watch the video here.
Still the Barclays guidance may trigger a few sells when we get above 4.30 and slow the rise to 2/3rds of NAV/share -which I consider a reasonable discount in current market. SP assumes we ahve calcuated NAV wrong for market and/or there will be a continuing market deterioration fast enough to offset the postive nav impact of rising sales of core portfolio.
Anyhow as a result I’ve pencilled in a slighly slower rise on the last leg of the “U”. Still by October 2024 I expct these to be plus 10 quid and by May 2025 finally over 12. A near 4 year dip before getting back to previous SP. THat is a long deep dip for a portfolio that has had very few dud’s and has excellent average sales growth across the portfolio. . From there onwards and upwards at our normal 20 to 30% sp and NAV/share growth. Maybe a bit of catch up from the missing 4 years as well.
Broker guidance at 6 quid (Berenburg + Barclay) and all insiders filing their boots. This should fly some time pretty soon. I’m holding until we are back at 11.82, whenever that is, but I expect within 2 years After that I’ll diversify a bit but GROW will still be 50% of my long term future portfolio. At the moment it is 100%.
Where the good guy gets beaten to a pulp but miraculously to a cheering crowd takes control, recovers and wins. 2.45 is ridiculous. Barclays guidance will slow rise a bit above 4 quid as some take profit but historically this does seem to move disconnected by broker guidance high or low.
Reported that Berenberg reduced it’s 12 month target form 9.00 to 7.75 as of july 15th with a buy rating. Still a long way up from our 2.55 sp. Indeed 300% the largest in the ftse 250 for any broker guidance.
Barclays reported to start coverage in a july 5th research note I can't seem to get. Stated “overweight” without a price target.
Https://files.pitchbook.com/website/files/pdf/Q2_2023_PitchBook-NVCA_Venture_Monitor.pdf
A u shaped recovery to be sure not a post covid sharp v shaped as I expected.
I accept the market ahs changed but I believe the discount to our nav already applied in the face of robust sales growth of portfolio companies quite enough to reflect current market conditions. A discount to NAV of say 30% to reflect uncertainty as to when NAV/share grows at 20 to 30% again is fair enough but not the extreme we have. Arbitrage without much change in market may come and with it 5 quid sp.
We went suddenly up form 2.60 to 4.80 in 2 weeks in late October 2022. I thought that was the v shaped recovery but sadly not yet. BIg funds who hold GROW neither selling or buying. I suppose they are not adding yet as they think the opportunity will still be there in a few months even if at a modestly higher SP.
We went down on anticipation of us rate rises and we will go up on the reverse anticipation - not necessarily waiting until the hard results of rate cuts. We don’t seem overly influenced by UK rate rises or uk economy -thankfully. IN theory we should be influenced more by ECB rates but not as much as you would think.
Anyway signs of IPO market coming back. With that whole pipeline of late stage funding rounds will repair itself and our discount to NAV/share should disappear alongside some organic increase in NAV/share itself -perhaps sarting as soon as our half yearly results in October 2023. I still think we ae looking at circa 10 to 12 quid by November 2024 and then upwards and onwards from there.
Shell shocked maybe,
when something looks, quacks and walks like an irrational price maybe it is and will correct itself within days, weeks or months.
it is analytically a trap to look at the sp and reverse engineer the justification. sometimes there is no rational justification. the downside risk of substantial down-rounds across the whole of the core portfolio that would justify this sp is possible but improbable.
no evidence happening nor or evidence it could happen. never happened before to have years of downrounds for companies already mature enough to have substantial sales with good margins on those sales.
the comparable is the dot com boom and bust but those companies had no sales and collapsed when funding rounds tightened.
grow’s portfolio is genuine companies of the future. i think the valuations credible and cautious. for example graphcore now on our books at 1/3 what we had it even though in hottest sector. punished by us for lack of sales. correctly so but still with enormous potential. is 1/3 d too little an implied downround or too much impossible to say but in aggregate across portfolio hardly 75% wrong as sp implies. we have had recent funding rounds for some confirming our valuations.
panic not logic
good luck all
Well we are now at the lowest point we have ever had as a listed trust dating back to launch in 2016.
So the market thinks no value has been added at all in 7 years and that 100% of all cash reinvested (greater in aggregate than our assumed value) has been wasted while the rest of the portfolio has not grown at all.
Ridiculous. But ridiculous can last longer than a few days or weeks.
Yes vc funding market volumes down but not valuations. Down rounds and bankruptcies in the sector are at normal levels. Silly
Sen I agree that 8.4x average revenue multiplier is high. It is much higher than our normal multiplier used for estimating value when last round not used. With sales on average well up and company valuations well down our average revenue multiplier should be well down as well. SO I need to dig. I suspect not an apples to apples comparison somehow.
Bax, I can’t believe we dipped to our October low of 2.4 again but here we are. Be interesting if Berenberg stick their neck out again and guide 900 within 12 months. 2.40 to 9.00 is now a long way and investors have gotten quite used to a range of 2.4 to 4.80 so some will sell out as we go up slowing the rise.
I bought a few today. If I had more money I’d buy more. I think the SP simply irrational due to secretive structure of a retail wrapper around hard to value unlisted firms and assumptions made ridiculously on the downside risk -that is there but much more improbable than the sp indicates.
Nice to have some discussion about the long view.
Sage I admit the facts are on your side for now but Berenberg Bank (our only broker guidance) states a 12 month target of 900 from Feb 21, 2023. They said the same 02 November 2022.
As far as I can see Berenberg do not have any share rated in any sector with more than 100% upside. Indeed the whole ftse 250 has no share other than us with a 100% plus broker guidance of plus 100%.
So either Berenberg or you are wrong on the sp prospects next 12 months. Maybe it will be something in-between. I expect by this time next year, if not a bit earlier, towards the Berenberg end of the spectrum but I am the blog optimist.
For my money I think this is a simple miss-pricing but the big funds who agree and could add at this attractive price are waiting on the sidelines to be sure we really are ready for the sustained lift up before committing. They got burned on the 3 week rally in early November between 2.40 and 4.80 that was not sustainable. So they want to be sure about the recovery this time and are willing to pass on investing at the exact bottom. So sp success will create it’s own momentum.
Volumes are way down on late round and corporate sales but not so much valuations. Preference shares we have are not properly understood by many in the market. Just looks to them as if we are not discounting aggressively enough. Also we never put on our books the peak frothy valuations of 2021 and early 2022 so have less to adjust downwards -but this “conservative valuations” is not trusted by some.
Probably enormous repetitional damage to GROW’s management to have had 3 listed shares on our books who have not achieved recently, even with the tech rally, even 1/3 of IPO price. We did not dispose at the pre IPO stage as is our policy and have been rightly pillared by the market for not doing so. So with that glaring very public error little trust in our fairly secretive nav valuations of our unlisted core companies is being given by the market. The worst is assumed rather than what our management actually say. Management could predict accurately the second coming right now and nobody would listen.
The enormous cash realizations in 2021 and 2022 have been reinvested upstream and for now no hard evidence of the wisdom of this investment. GROW management say it is still there but the market does not trust them for now. This will take time. Roughly the cash realizations of 2021 and 2022 equal our current assumed value according to our current sp. Crazy assumptions of money mostly wasted and many core companies about to go bankrupt or nearly so. Just not going to happen.
May well turn out to be a 12 months down, 12 months bouncing at bottom and 12 months climb to something more in line with NAV/share. Half yearly in October with some NAV/share increase built on market proof of some core valuations in line with what we have on the books or more would do it. Many do not believe our GROW team to be getting the valuations right for this market. Personally I think the valuations are OK and the market shifting upwards anyway so either way NAV/share will be aligned with perceived value at some point.
Been a funny bottom with wild ups and downs.