Worth noting the average total return on the S&P is 9.8% a year since 1926
FTSE All share 6.58%
I could go on but at today's price the dividend alone will beat either or any index you choose.
IFF the dividend is sustainable AND rises in line with inflation it would take many years for any index to catch up with SEIT’S dividend. The latter is only achieved by adding in share price growth and assuming no share price growth for SEIT.
An aside Rathbones still own 10% and they are sellers.
Probably why I used the word if. Didn't you see it?
IF it continues to pay out it's present dividend for the next 10 years that would also probably beat any index. I reinvest the dividend into other assets. That's where the compounding can clearly work
Yes in theory rule of 72 should mean with 12% yield your money doubled in 6 years excluding any capital gain...great but then you talking about diversifying into other assets - also fine but I wouldn't call that compounding. This stock is like dividend investing and I've found has never worked that well for me. I'd rather go for a stock with multiple upside. SEIT i think can only at best double to nav and yes collect the divis along the way...it might turn into a good investment but probably not great...again imo.
The thing that stands out to me is just how comparable these 2 funds are. Yes they are both in the alternative/ renewables/ esg sectors but SEIT comes across more like a VC fund whereas you know that NESF business is stable, boring, solar cells.
That’s not to say I disagree with your numbers just that the SEIT model has more unknowns to me than NESF
Debt is debt, even if it is amortising. Ignoring it and netting of the FCF is fair enuff for a net profit perspective, but it's still on the BS and is a prior claim on s/holder funds. Imo it should not be ignored when looking at debt ratios.
Just browsing through and #8 FES caught my eye. I can't follow the numbers :
100 fittings at 60w / fitting = 6,000 W = 6kW
Running 24h = 24 x 6 = 144kWh per day
364 days/year 364 x 144 =52,416kWh per year
So, regardless of how efficient the LEDs are, hard to see a saving of 62,899kWh
The original SEIT announcement cites 90% ish savings over traditional incandescents, which is correct.
However, we're replacing fluorescents here, where the saving is more like 50%.
So, original electricity cost = 52,416 x 25c = USD13,104
LEDs using 50% = 13,104 x 50% = USD6,552
25% to FES = USD6,552 x 25% = USD1,638
And the lights typically have up to 100,000 hours operating lifespan - 12 years. With 100 installed, I'd imagine there would start to be failures before that and, and here I'm guessing, the response would be to change all 100 at once - maybe at 10 years?
Just browsing through and #8 FES caught my eye. I can't follow the numbers :
100 fittings at 60w / fitting = 6,000 W = 6kW
Running 24h = 24 x 6 = 144kWh per day
364 days/year 364 x 144 =52,416kWh per year
So, regardless of how efficient the LEDs are, hard to see a saving of 62,899kWh
The original SEIT announcement cites 90% ish savings over traditional incandescents, which is correct.
However, we're replacing fluorescents here, where the saving is more like 50%.
So, original electricity cost = 52,416 x 25c = USD13,104
LEDs using 50% = 13,104 x 50% = USD6,552
25% to FES = USD6,552 x 25% = USD1,638
And the lights typically have up to 100,000 hours operating lifespan - 12 years. With 100 installed, I'd imagine there would start to be failures before that and, and here I'm guessing, the response would be to change all 100 at once - maybe at 10 years?
Best title yet. Bravo.
Second largest holding at 8%.
Worth noting the average total return on the S&P is 9.8% a year since 1926
FTSE All share 6.58%
I could go on but at today's price the dividend alone will beat either or any index you choose.
IFF the dividend is sustainable AND rises in line with inflation it would take many years for any index to catch up with SEIT’S dividend. The latter is only achieved by adding in share price growth and assuming no share price growth for SEIT.
An aside Rathbones still own 10% and they are sellers.
Big if...will this be around in 10 years? I don't think you could include this as a great business / quality compounder imo.
For me this is a value opportunity being mispriced (so far anyway) by Mr market and once near intrinsic i'd probably look to sell.
Probably why I used the word if. Didn't you see it?
IF it continues to pay out it's present dividend for the next 10 years that would also probably beat any index. I reinvest the dividend into other assets. That's where the compounding can clearly work
Yes in theory rule of 72 should mean with 12% yield your money doubled in 6 years excluding any capital gain...great but then you talking about diversifying into other assets - also fine but I wouldn't call that compounding. This stock is like dividend investing and I've found has never worked that well for me. I'd rather go for a stock with multiple upside. SEIT i think can only at best double to nav and yes collect the divis along the way...it might turn into a good investment but probably not great...again imo.
The thing that stands out to me is just how comparable these 2 funds are. Yes they are both in the alternative/ renewables/ esg sectors but SEIT comes across more like a VC fund whereas you know that NESF business is stable, boring, solar cells.
That’s not to say I disagree with your numbers just that the SEIT model has more unknowns to me than NESF
Up 29% in the last month and still yielding over 11%! Discount of 38% still.
Interesting that the SP rise was despite Blackrock selling down its holdings.
Debt is debt, even if it is amortising. Ignoring it and netting of the FCF is fair enuff for a net profit perspective, but it's still on the BS and is a prior claim on s/holder funds. Imo it should not be ignored when looking at debt ratios.
Hi OB - your edge on SEIT is the analysis above. Hope you leaned in heavy when blackrock sold at 0.43p...you deserve it.
Now all we need is Rathbones to sell their 10%.
Or doesn't that count?
Great article! I did see it and I did swoop at the time.
Just browsing through and #8 FES caught my eye. I can't follow the numbers :
100 fittings at 60w / fitting = 6,000 W = 6kW
Running 24h = 24 x 6 = 144kWh per day
364 days/year 364 x 144 =52,416kWh per year
So, regardless of how efficient the LEDs are, hard to see a saving of 62,899kWh
The original SEIT announcement cites 90% ish savings over traditional incandescents, which is correct.
However, we're replacing fluorescents here, where the saving is more like 50%.
So, original electricity cost = 52,416 x 25c = USD13,104
LEDs using 50% = 13,104 x 50% = USD6,552
25% to FES = USD6,552 x 25% = USD1,638
And the lights typically have up to 100,000 hours operating lifespan - 12 years. With 100 installed, I'd imagine there would start to be failures before that and, and here I'm guessing, the response would be to change all 100 at once - maybe at 10 years?
I hold SEIT, but nervously ......
Just browsing through and #8 FES caught my eye. I can't follow the numbers :
100 fittings at 60w / fitting = 6,000 W = 6kW
Running 24h = 24 x 6 = 144kWh per day
364 days/year 364 x 144 =52,416kWh per year
So, regardless of how efficient the LEDs are, hard to see a saving of 62,899kWh
The original SEIT announcement cites 90% ish savings over traditional incandescents, which is correct.
However, we're replacing fluorescents here, where the saving is more like 50%.
So, original electricity cost = 52,416 x 25c = USD13,104
LEDs using 50% = 13,104 x 50% = USD6,552
25% to FES = USD6,552 x 25% = USD1,638
And the lights typically have up to 100,000 hours operating lifespan - 12 years. With 100 installed, I'd imagine there would start to be failures before that and, and here I'm guessing, the response would be to change all 100 at once - maybe at 10 years?
I hold SEIT, but nervously ......