Member Info for steph

https://www.lse.co.uk/rns/GROW/uipath-inc-announces-pricing-of-ipo-cq3ft77brx4onoq.html

https://www.economist.com/science-and-technology/2021/04/15/how-spooks-are-turning-to-superforecasting-in-the-cosmic-bazaar

I prefer no dividend (some trusts do them) but the lack of must hold back the SP relative to NAV/share + growth of NAV/share value.

Looking forward to year end update on the 26th. I'd expect we will drift up this week based on "good vibes" from those putting the report together.

https://www.telegraph.co.uk/business/2021/04/16/taylor-swift-blacks-japanese-nukes-gathering-crisis-capitalism/?WT.mc_id=tmgliveapp_iosshare_Aw9MwgfZPDyJ

Yes fintech flying right now. Should help GROW valuations as the sector is nearly 1/4 of GROW total.

I've bene waiting 11 months for the year end March 31 2021 update after the valuers of NAV year end 2020 made a major COVID related downgrade in NAV of the underlying portfolio.

I get it that in March 2020 nobody knew what was going to happen to the economy under COVId lockdowns and NAV valuations need to be calibrated on the likely price the portfolio could be liquidated at with no account of forward potential. So at least 10% of NAV/share was suppressed.

Now it is time for catch up. Looking like we will exceed 20% NAV/share upgrade in just last half so a full COVID catch up and more. The more is because far from suffering under COVID GROW's portfolio has on the whole benefited from COVID induced trends and realistic NAV/share growth has accelerated not decelerated.

What this means for SP is hard to guess. Sage our wise and conservative blogger believes we can't get much beyond NAV/share. Funds (but not retail investors) can get the same portfolio directly so why should they pay a big premium above NAv/share for GROW. I've, wildly, said that once the market accepts we can continue with roughly 20% year on year NAV/share increases we will get a premium that partly prices in the future growth of between 70% and 100%. So gas in the tank at any conceivable NAV/share for this year.

I will take a wild guess and that we will exceed 10 quid per share by end of July 2021 on the back of a NAV/share that will be circa 8 quid.

https://www.independent.ie/business/world/draper-esprit-set-for-50m-uplift-from-us-software-firm-flotation-40310716.html

https://markets.investorschronicle.co.uk/data/equities/tearsheet/forecasts?s=GROW:LSE

Any idea which broker. I can't find it.

https://www.altfi.com/article/7764_primarybid-is-surging-as-companies-are-waking-up-to-the-community-opportunity

https://www.telegraph.co.uk/business/2021/04/09/monetarists-fear-inflation-spiral-bank-england-stokes-economic/

https://www.telegraph.co.uk/business/2021/04/05/boom-time-stock-markets-bonds-left-doldrums/

https://www.telegraph.co.uk/business/2021/04/05/boom-time-stock-markets-bonds-left-doldrums/

https://www.telegraph.co.uk/business/2021/04/06/stage-set-sustained-robust-economic-expansion/

some fund is selling into really good news. It will clear and SP will jump a bit when it does.

https://www.thebalance.com/tech-ipos-reach-values-not-seen-since-2000-bubble-5093305

I think so.

At 4.2 in March 30 2020 the NAV/sales ratio seems eminently reasonable for fast growing tech. Indeed still on the cheap side. True some tech are lower such as CISCO, Intel, Sonny but they manufacture things for a retail or near retail market -which is much tighter margins than the more software based type of companies we have.

The Company will provide a full year trading update on 26 April 2021 and will announce full year results on 14 June 2021.

https://www.lse.co.uk/rns/GROW/investment-and-exit-update-8vradowor1dpkfl.html
very upbeat update.

Many more funding round NAV valuations it seems in core portfolio. I don’t think there is any legitimate accounting way to deflate a last funding round valuation (unless the company concerned has run into acknowledged difficulty of some sort).

With so many NAV calculations now based on recent funding round valuations the NAV/share for GROW should be at or north of 800.

Sales per NAV ratios ( a basis of calculating NAV when there is no recent funding round or IPO) have probably risen from the 4.2 in year ending April 2020 towards the 5.0 we had in the year ending April 2019. So the rising tide might help lift all lifeboats in the portfolio even those on calculated NAV.

I love the fact that nearly all (but not exclusively) our core portfolio is profit making (reported as 65% of sales in 2019 annual report). Solid sales and making profit on those sales and low multiples of that to get NAV mean this is no dot com bubble we own. The dot com bubble was based on promising business plans and not sales and actual profits. Entirely different.

https://www.edisongroup.com/wp-content/uploads/2021/04/Draper-Esprit-A-peek-into-Draper-Esprits-portfolio.pdf

We have 150p/share NAV uplift based on only 4 portfolio company IPO and funding rounds since September 31 2020. Seems hard to imagine we will not hit NAV/share of 800 on year end results. That would be fabulous (30% plus in just 6 months) and justify a SP even in the current market of mid 900's.

I've just done my bed and ISA. Pleased to get this transfer price.

Thanks
I’d rather be diversified just in case grow make a major error on one or two key holdings. I have a strong bias to what I’ve researched though and that takes time

end of May probably a good time to diversify a bit. Your suggestions excellent candidates .

Looking forward to my bed and isa tomorrow.

It is of course true we will in the long run track NAV/share. Sage I completely accept there will be volatility along the way. We may dip substantially but short term below NAV/share as we did in March 23 2020 most spectacularly. Generally however GROW SP have been less volatile than the market in general. It is clearly a hold for a substantial period type of share.

Only time will tell if we also rise a bit extra due to a higher premium that the 15% or so we have had in the last 4 years. I also think the valuations of NAV for the underlying companies was overly conservative for march 31 2020 (which the annual report itself mentioned as conservative and covid related). I'm hoping that this "gas in the tank" will get released over the next 2 or 3 years flattering our results. More final round and IPO realizations of course force the NAV upgrade but there is the methodology used to value companies that do not have a recent funding round to think of. This part of the core portfolio has fluctuated between 40% and 60% of the total core portfolio so we are very sensitive to the valuation methodology and assumptions used.

Looking forward to a bed and ISA on Tuesday.

Great sector (which I feel is generally underpriced) and great investigative and knowledge based trust exploiting the sector to the full.

It’s great to have a diversity of views. I blog here specifically because it is not an echo chamber.

I do think 8 to 10 % per year over 10 years is on the most pessimistic side of any fan diagram . Maybe 20% is the middle and 30% the high end.

I think we will get above the middle for a couple of years as some hidden value not priced in then I’d be really happy with 20% and even not bitterly disappointed with 8%

lets assume a NAV/share of 800 on results. I think a bit conservative but in line with analyst guidance.

Lets assume a "modest" 20% premium of SP over NAV/share on results. Slightly above our 4 year average but will be on the high end due to unusually NAV/share strong performance.

That's 9.60 SP by end of May -which is in line with recent broker targets.

All pretty conservative assumptions I think.

you are right, the premium is modest (circa 15%) on average looking at our NAV/share and the SP on the date the NAV/share was announced.

This was:
370 for March 31 2017 producing a SP of 390 on results.
413 for March 31 2018 producing a SP of 550 on results
524 for March 31 2019 producing a SP of 500 on results
555 for March31 2020 producing a SP of 648 on results.

So half the time a premium of 20 to 30% and half the time no significant premium.

Going forward, and slowly over the next few years I might add not all at once, is my 70% to 100% range of premium I am hoping for. I think there are 4 key reasons:

1) no way for retail investors at present to get the same exposure directly with the underlying portfolio. Will be willing to pay for this once they understand it.
2) institutional investors who can participate in funding rounds of the underlying portfolio may prefer for the work to be done for them by GROW who specialize.
3) The underling portfolio is returning over 20% growth per annum.
4) Any company directly on the market in it's own name achieving 20% growth per annum will be priced well above trailing NAV/share. Sector arbitrage opportunity.

IN nay case I am also happy if we go up from here "only" in proportion of our NAV/share increases. I just think that if this keeps up there will be a more significant premium attached. Perhaps for now "only" the 20% or 30% we achieved in 2018 and 2020.