II Editor
22 Dec 2017
NEW ARTICLE: Bargain hunter: Three 'star' managers trading on a discount "The eight-year long bull market has been described by commentators as the "one of the most unloved" in memory. Retail investors are certainly not getting carried away; in fact the opposite is playing out, as evidenced by the latest fund data from ..."[link]
alandwd
29 Mar 2017
Re: Today Good spot, as already said I'm on the verge of cashing out at least some if the discount goes below 10%.For anyone interested in the UK smaller company exposure and a reasonable dividend, checked out Aberdeen Smaller (discount 22%) and Dunedin Smaller (19%), both decent value with good performance figures to back them up.
Windlesham Don
29 Mar 2017
Re: Today Appreciate your analysis. I've been increasingly fed up with the performance of this trust and so sold just now at 951p for a small profit. I'll stay in cash for a while and maybe top up some of my existing holdings in defensive high yielding ITs. I'm pretty nervous regarding the volatility of the market for the next two years and as I intend to retire within the same timeframe my key focus is to create an income whilst not destroying capital.Obviously HOT was not part of that strategy, but was in my portfolio to provide some small company exposure (I already hold HSL and used to hold BRSC until consolidating into HSL).Best of luck for the future.
nncalc
29 Mar 2017
Today In case anyone is interested, I tried to get some prices today. My platform would not give a buy price but showed a real sell price of 952p This looks like a discount of close to 10% so I sold some at 952p. I have been watching BRSC and the offer price was 1046p against assets of 1260p. Thats where my money went. Do your own research.
nncalc
29 Mar 2017
Re: Wind up Vote Under the rules governing quoted companies "substantial" holdings and changes have to be disclosed. Usually a 3% holding is disclosed and then any movement through a percentage number, e.g.a change from 4.99% to 5.01% or vice versa. For this purpose everyone needs to know how many shares are in issue so any changes have to be announced by the company within 24 hours. For some trusts this means announcing issues of equity (SMT is good at doing this) and for most it is buybacks. You can also get compnaies buying own shares to satisfy share incentive scheme issues, which counts as a reduction in shares in issue. There have been no announcements so no buybacks. In my view, the company is so small it must be difficult to run it economically and a reduction in size would make the problem worse. This trust was launched in a time of optimism and there were subscription rights attached to the new shares. Performance was so disastrous that the subscription shares expired. Memories tend to be long and I suspect there are still grumpy holders and ex holders out there which may explain the usual discount range. I see little interest from institutions, again because the trust is so small. Even at my modest level I find dealing difficult sometimes and sell/buy spreads can be horrific. I love James Henderson exccept I cannot understand his affection for holding HSBC shares (!) and get tempted in by 20+% discounts but now there are more tempting discounts available. I just express personal views. I have spent a long time watching and trading this one and will continue to try to make money from it.
Windlesham Don
21 Mar 2017
Re: Wind up Vote Nncalc, out of interest why do you believe that share buybacks are unrealistic? My naive take on the situation is that buybacks would be very effective with such a small trust and should be very useful in normalising the SP. Since the announcement volumes seem to be up, which may be due to buybacks or may be coincidence. Any way of checking I wonder? Any thoughts gratefully accepted.
alandwd
21 Mar 2017
Re: Wind up Vote Completely agree, unless all of us here agree to attend the AGM in 3 years time and unsettle the boys club and at least get them to count the votes.I too am looking to sell at least some on a further drop of the discount to below 10%.
nncalc
21 Mar 2017
Re: Wind up Vote My take on share repurchases is that it is unrealistic to expect it to happen when the trust has a market cap below £80m. The small size must make this trust something of a nuisance in a well stocked stable and I have a permanent hope that we will get a takeover from another trust. Lowland had a decent holding in HOT but I think that has gone now. The main lesson I get from the vote is that the supposed get out available to shareholders if discounts become too large is a nirage. If the votes don't need to be counted when the discount has been over 15% for some time it seems unlikely to me that a wind up vote will ever be passed anywhere. Perhaps I have missed something and continuation votes have been lost in the past; I am ready to be enlightened. I will certainly be reducing my holding if the price goes above £10 and reviewing my strategy.
alandwd
17 Mar 2017
Re: Wind up Vote It does sound like the standard clauses that seem to be on a lot of Investment Trusts now and probably is to assist in narrowing the discount. I don't mind, as long as shares are bought and cancelled when the discount is big (in this trust I'd say 15%+)Be interesting to see what the 2 day rise has done to the discount. According to trustnet it has dropped to 12%. If it drops below 10%, there may well be better value trusts around to switch into.
holland44
17 Mar 2017
Re: Wind up Vote Perhaps more important than any decision to wind up were the following special resolutions, all of which passed. They authorise:"- up to 10% of the share capital to be issued or sold out of treasury without first offering them to existing shareholders in accordance with statutory pre-emption procedures;- the Company to make market purchases of its own ordinary shares up to a maximum of 14.99% of the share capital (equivalent to 1,199,328 ordinary shares as at today's date) at the maximum price per share (exclusive of expenses) not exceeding the higher of: i) 105% of the average middle market quotations for the five business days preceding the date of purchase; andii) the higher of the last independent bid and the highest current independent bid on the London Stock Exchange. Shares repurchased will either be held in treasury or cancelled; - a general meeting to be called on not fewer than 14 clear days' notice."This *sounds* like the introduction of a discount control mechanism, to allow HOT to buy its own shares and reduce the discount (or issue shares and reduce a future premium), but this isn't stated directly and there's no indication of the discount range they would aim for.Can anyone throw any light on this?
nncalc
16 Mar 2017
Re: Wind up Vote Apparently all votes passed on A SHOW OF HANDS. Proxy votes not needed or counted, apparently. Perhaps potential investors feel the uncertainty is over for another three years .......
alandwd
16 Mar 2017
Wind up Vote Looks like someone woke up this morning and decided this trust might get wound up after all. Well worth sitting to see which way this goes.
Looking for growth
24 Feb 2017
Re: Wind up vote I can't get excited about any wind up possibility, as I just don't see it happening. I sold up recently (very luckily) at the recent high of 953p, having bought at 765, only a couple of months before. I keep this fund on my watch list waiting for when it reaches large discounts (ie over 20%). If I feel confidence in the general market and have cash sitting in my account I would typically pick this up at those discounts. I think this time I got in at 22% discount. Usually I'm just looking for a narrowing of the discount to about 15 or 16% and take a quick 5% profit.This fund seemed to hit a sweet spot over the last 2 months and NAV climbed sharply, plus discount came down to about 16% during that time. Resulting in a nice 20% trade. NAV seems to have stalled or even fallen back since.I'll come back in again when my conditions get met again.LFG
Windlesham Don
23 Feb 2017
Re: Wind up vote Many thanks. I've been really disappointed in this fund and also disappointed that at such a large discount to NAV there has been virtually no directors buying.Frankly, IMO the board holding 27k shares between them is not showing any confidence in the trust. Also, if James Henderson's holding is included in that figure (and he is quoted as a board member on the website) then it is even worse.He either believes in his own ability or he doesn't...
nncalc
23 Feb 2017
Re: Wind up vote In days of yore (I am very old) nominee companies offered investors the right to give a vote instruction in return for a fee. I now have HOT with Alliance and with HSBC Invest Direct. I have looked through each list of charges and do not see anything about voting. I will send each a "secure message" suggesting that a vote against continuation (in the light of the above average discount) is the appropriate action for the registered investor (i e the nominee company) to take. I will see if I get a reply.
