You may remember that in early April this year I added to my holding in RIT (Rothschild Investment Trust) to top up my ISA.
My rationale was that it was trading at a 25 % discount to Net Asset Value (NAV) and that this might shrink. I paid £17.28. Well it is still at a 25% discount to NAV but the RIT board agree with me the stock is too cheap and they have bought in 7% of the company’s shares at up to £18.80. They have announced that the (unaudited) NAV of RIT shares is £25.08 at 30th June.
When MP Evans buy in its shares they are cancelled. RIT holds theirs in treasury. This means they can re-issue these shares when the discount narrows or better still there is a premium. Personal Assets has been doing this for ages which is why its NAV is never far from fair value. RIT’s problem is that it has gone from being a stock market darling to a bit of dog poo that nobody wants to step on.
As you can see the share price has fallen almost 11% over the last five years while the NAV has risen by 25%. This is frustrating for the board. I imagine, indeed hope, they are on a charm offensive visiting fund managers to persuade them to love RIT again.
The performance figures above are flattered by assuming dividends (2%) have been re-invested. Nevertheless the long term performance has been pretty good. What has spooked investors is RIT’s 36% exposure to Private Equity. You really only know the true value of PE when a holding is sold. Often it is undervalued as a matter of prudent housekeeping; unless you are a crook or a fool and wildly overvalue until chickens come home to roost. I believe RIT is prudent not least because the Rothschild family own about 38% of the shares. Io digress, I say Roths – child but purists say Roths – cheeld; I don’t know how the family pronounce their name and hesitate to ask Hannah Rothschild at the next AGM.
MP Evans paid a Final Dividend last month of 32.50p, up from 30p last year and making a total yield in excess of 5%. Not needing the money until I pay my tax in January, I topped up my Premium Bonds. I might win £1 million. More realistically the worst case scenario is a hike in Capital Gains Tax followed by a successful takeover of MPE but luckily half my holding is in a pension and therefore exempt from CGT.
Otherwise I look at my portfolio most days but have only made two sales this year to crystallise my measly CGT allowance. My most recent purchase was Phoenix in September 2023. As soon as I bought the price tanked but now it’s back to where I bought and yields 10%. Investing is a dull pastime.
I saw Peter Spiller recently at Capital Gearing. They have also added to their holding in RIT. RIT are said to have two investments which are “oven ready” for IPO in the U.S.
Denis, Thank you that’s good for morale. I remember when Caledonia owned The Sloane Club it was valued in their books at about £60 million and they sold it for around £80 million. I don’t have Capital Gearing because I already have Personal Assets and McInroy & Wood Balanced fund and you cannot have everything.
Christopher