I really enjoy your articles and the way you "show your workings" a la DGI9.
The price action prior to the Investigation RNS was bit of a "watch it flag". I think you are right in that the sale will go through and the market has just "knee jerked" and panicking early.
Hi Fluff, Probably the 3 things I can say which are uppermost in my mind about Grow are these:
1. I believe the FWD partner merger will be really positive for GROW and provides a "front end" capability/incubator for new holdings as well some very interesting existing holdings.
From its 49.5p low of a few months ago CHRY is up over 60%.
3. Lastly, and of particular note in CHRY-pes I note that Graphcore has DOUBLED in CHRY's valuation as at 31/12/23. So what's changed? CHRY meanwhile has a potential holding selling at a 5.5p/share uplift closing this quarter. Is that Graphcore? I'm quietly excited that it could be.
If this is true, then by my reckoning that would mean a sale at $1.67bn valuation (don't laugh I'm simply telling you what the maths say). This is a 15% discount to the Series E valuation of $2.77bn, so means a £0.5m haircut for GROW (who hold their Graphcore holding at 12% discount whereas CHRY in 09/23 had discounted it to 30% of the invested amount, and since walked it back to 60%.
Thanks OB. Must admit that attractive as are both at these discounts, it's hard to look beyond some of the junior miners in terms of value and where we are on the commodity cycle. 🤔
It's been a difficult start to the year for large parts of the market imo and surprisingly for commods / energy given the geopolitical turmoil. So the performance of commod related stocks above could count for double- well done
Some picks badly affected by bad luck - especially DEC. They got ambushed the minute they listed in the US - and I wonder if Pelosi et al loaded up on shorts.
Can you share worries about the DIG9 management please? The lack
they may just reactively fire sale the assets. Few expect more than 30p a share now on the boards.
Nick, to but in here - DGI9 mgmt. I don't have a concern really, I just think amidst concerns about interest rates (hence debt costs), that have impacted a number of small niche stocks managed by Triple Point, an irrationality has led to contagion. I hold three such stocks (DGI9/SOHO/TENT). Each has had sentiment (and interest rates) go against them, and specific issues, but I feel the commonality is being overstated. What I do feel is that Triple Point structures their stocks/holdings investments in such a way that they extract maximum income out of such, usually by loans they have made., fine in a benign interest rate environment but potentially problematic in a fluctuating/higher rate one. (For openness, I also own the US parent co TPVG specifically because i know this is how they operate). As for DGI9, the panicked overreaction to the Verne referral speaks more to me of quick buck merchants on the wrong side of the buck than fundamentals changed. Yes there is a tightrope to walk between funding out/paying debt for assets held, but frankly, if one disregards Verne etc al, just Arqiva warrants more than 30p
Really appreciate The OB20 updates, finding them so instructive and interesting, particularly covering areas/stocks that I wouldn't ordinarily monitor/invest in. Makes me examine better my whole portfolio. One suggestion - I'dike it to be say first of the month, so its a fixed period between updates, and sonething to look out for.
I really enjoy your articles and the way you "show your workings" a la DGI9.
The price action prior to the Investigation RNS was bit of a "watch it flag". I think you are right in that the sale will go through and the market has just "knee jerked" and panicking early.
Any views re GROW. Increased insider buying, BlackRock etc... ?
Hi Fluff, Probably the 3 things I can say which are uppermost in my mind about Grow are these:
1. I believe the FWD partner merger will be really positive for GROW and provides a "front end" capability/incubator for new holdings as well some very interesting existing holdings.
See: https://theoakbloke.substack.com/p/grow-forward
2. I am impressed by the change of momentum at CHRY. There's a read across to GROW or at least there should be: See: https://theoakbloke.substack.com/p/chry-pes
From its 49.5p low of a few months ago CHRY is up over 60%.
3. Lastly, and of particular note in CHRY-pes I note that Graphcore has DOUBLED in CHRY's valuation as at 31/12/23. So what's changed? CHRY meanwhile has a potential holding selling at a 5.5p/share uplift closing this quarter. Is that Graphcore? I'm quietly excited that it could be.
If this is true, then by my reckoning that would mean a sale at $1.67bn valuation (don't laugh I'm simply telling you what the maths say). This is a 15% discount to the Series E valuation of $2.77bn, so means a £0.5m haircut for GROW (who hold their Graphcore holding at 12% discount whereas CHRY in 09/23 had discounted it to 30% of the invested amount, and since walked it back to 60%.
Thanks OB. Must admit that attractive as are both at these discounts, it's hard to look beyond some of the junior miners in terms of value and where we are on the commodity cycle. 🤔
My approach has been to cover both bases, because how long will the despair stage continue with junior mining? With China unravelling, it may be 2025.
It's been a difficult start to the year for large parts of the market imo and surprisingly for commods / energy given the geopolitical turmoil. So the performance of commod related stocks above could count for double- well done
Some picks badly affected by bad luck - especially DEC. They got ambushed the minute they listed in the US - and I wonder if Pelosi et al loaded up on shorts.
Can you share worries about the DIG9 management please? The lack
they may just reactively fire sale the assets. Few expect more than 30p a share now on the boards.
Nick, to but in here - DGI9 mgmt. I don't have a concern really, I just think amidst concerns about interest rates (hence debt costs), that have impacted a number of small niche stocks managed by Triple Point, an irrationality has led to contagion. I hold three such stocks (DGI9/SOHO/TENT). Each has had sentiment (and interest rates) go against them, and specific issues, but I feel the commonality is being overstated. What I do feel is that Triple Point structures their stocks/holdings investments in such a way that they extract maximum income out of such, usually by loans they have made., fine in a benign interest rate environment but potentially problematic in a fluctuating/higher rate one. (For openness, I also own the US parent co TPVG specifically because i know this is how they operate). As for DGI9, the panicked overreaction to the Verne referral speaks more to me of quick buck merchants on the wrong side of the buck than fundamentals changed. Yes there is a tightrope to walk between funding out/paying debt for assets held, but frankly, if one disregards Verne etc al, just Arqiva warrants more than 30p
Really appreciate The OB20 updates, finding them so instructive and interesting, particularly covering areas/stocks that I wouldn't ordinarily monitor/invest in. Makes me examine better my whole portfolio. One suggestion - I'dike it to be say first of the month, so its a fixed period between updates, and sonething to look out for.