Aberforth Smaller Companies

ASL’s valuation discipline has delivered good returns, supported by an impressive M&A hit rate…

Aberforth Smaller Companies

ASL’s value approach is well placed to capture the potential of a new market era…

Aberforth Smaller Companies

ASL’s value style has boosted performance, but valuations remain very low, and M&A could spark a further lift…

SHORE CAPITAL - Titon Holdings+ (TON, House Stock at 75p)

Aberforth Smaller Companies

ASL has outperformed since the vaccine rally, and its cheap portfolio valuations have historically led to strong returns…

Aberforth Smaller Companies

Aberforth Smaller Companies (ASL) is one of relatively few options for value investing in the UK small cap space. While value was out of favour for many years prior to the pandemic, since then it has staged a comeback and ASL has performed strongly as a result (see Performance). While ASL has outperformed its benchmark and sector in 2022 year to date, this has been in a falling market. Perhaps as a result of general risk aversion, the Discount has widened to 16%.

Finding value in a haystack

Non-income value strategies are becoming increasingly scarce, but the holdouts represent attractive near-term opportunities

Aberforth Smaller Companies - Overview

The reflationary rally since the announcement of successful vaccine trial results has been fantastic for value managers, and Aberforth Smaller Companies (ASL) has taken full advantage. As we discuss under Performance, the trust has generated strong returns over the past year, versus both the Numis Smaller Companies ex IT benchmark and against the UK small-cap sector. Consequently, the discount narrowed significantly in Q4 2020, the trust trading close to par in December and again in April 2021.

Aberforth Smaller Companies - Overview

Aberforth Smaller Companies (ASL) invests in UK small-caps. First listed in 1990, the trust utilises a team-based approach and places heavy emphasis on bottom-up stock selection using a disciplined value investment strategy. Whilst the composition of the team has changed since 1990, with all founding members having now departed, this process has remained consistent. As we discuss in performance, since launch ASL has outperformed the benchmark index by c. 2% p.a. The past five years have proven

Shoot to Thrill: ISA targets for long term growth

In times of crisis, the Romans would consult the Sibylline Prophecies. Contained therein was a prophecy that the 12 vultures seen by Romulus as he founded Rome (despite founding a start-up he still had time left for birdwatching, living before the modern-day culture of investors demanding updates) represented a signal that the primacy of Rome would last 12 saecula, a saeculum being a period taken as something between 85-100 years. With Rome and the Western Roman Empire falling to the Visigoths i

Eye of the Pfizer

It is often considered axiomatic in investment markets that smaller companies offer greater pricing inefficiencies, and thus greater opportunities to active managers to generate outperformance. In the UK Small Cap space, we have certainly seen suggestions over the long term that this is true, with the Morningstar UK Small Cap sector producing an average NAV return of c. 173.4% over the ten years to 05/02/2021, compared to a return of c. 115.2% from the Numis Small Cap including AIM excluding Inv

Cool Britannia?

There is no question the UK economy is in dire straits. A fall of 12% in GDP in Q2, followed by a 16% rise, led to an economy 7% smaller in September. The recent imposition of a second lockdown will lead to a further decline. The Bank of England forecasts the UK economy will end the year 11% smaller than when it started. The OBR estimates it will be smaller than it was entering the current crisis until late 2022. One lagging indicator which is lagging even more than normal is the unemployment ra

Aberforth Smaller Companies - Overview

Aberforth Smaller Companies Trust (ASL) invests in UK small-caps with a disciplined value investment style. While its portfolio has been under pressure in 2020, the announcement of good results from a candidate vaccine in late October saw its NAV rally and share price rally even harder than the market, which the managers believe indicates strong rebound potential. ASL has been managed to the same style since launch in 1990 and has outperformed the Numis Smaller Companies ex IT Index by over 1.5%

Five small cap trusts on very wide discounts

Trusts in the AIC UK Smaller Companies sector have de-rated significantly. Discounts have widened dramatically this year, having been pushed to a historic narrow point by the ‘Boris bounce’ at the end of last year. On an average discount of 12%, discounts in the sector are now wider than the 10 year weighted average discount of 11.5%. Within this average, there are some significant outliers. We look at the prospects for smaller company returns, as well as highlight those trusts exposed to them w

Aberforth Smaller Companies - Overview

Aberforth Smaller Companies Trust (ASL) owns a portfolio of cheap companies which the managers expect to outperform their more expensive peers. ASL has been team-managed since it was launched in 1990, and has outperformed the Numis Smaller Companies ex IT Index significantly since then. In more recent years the value style has been out of favour, and ASL has struggled relative to its growth-oriented peer group. As we discuss in the Performance section, the end of last year saw an outstanding qua

Zeus Industrials Round-Up - 13 September 2024

The UK industrial sector continues to show promising signs of recovery, with manufacturing PMI reaching a 26-month high of 52.5 in August as all survey indicators but one expanded. Economic data has also been encouraging, with UK pay growth cooling to a two-year low and inflation rising only slightly in July – supporting the case for further interest rate cuts this year by the BoE.

JPMorgan Emerging Markets

JMG is trading on a wide discount relative to its history…

THE MONTHLY January 2020

The Office for National Statistics (ONS) is due to publish its most up-to-date survey on share ownership in mid-January, which identifies the beneficial owners and decision- makers of the stock market. Hardman & Co has worked together with the share analysis service, Argus Vickers, to jointly produce its own survey, which anticipates the conclusions of the ONS survey but goes into much greater detail. Our work does not use a sample of 200 quoted companies as the ONS historically has, but rather

Gore Street Energy Storage + (GSF, House Stock at 58p) - Q1 NAV - construction assets on track

Facilities by ADF - An Autotrak-tive acquisition opportunity

ADF has raised £10m at 50p in an equity placing to acquire Autotrak, the market leader for portable roadway hire in the UK film and TV sector. This moves ADF closer to its medium-term targets of being a one-stop-shop provider of premium serviced production facilities to the UK film and TV industry and generating £100m of revenues. Our base case has EPS accretion of c.12% and our upside case shows nearly 20%. The valuation looks compelling, given it trades on an FY25E Adj P/E of just 5.5x vs equi

SP Angel Morning View: Copper prices rise alongside iron ore as China restocks

JPMorgan American

JAM’s outperformance puts it in the spotlight as a low-cost, core option for US equities…

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PANMURE LIBERUM: Harworth: Strong progress continues

Morning Note – 10 September 2024

LIBERUM: SAS UK SMID Monthly: Should we expect a rally in retail stocks?

PANMURE LIBERUM: Speedy Hire: We expect a much stronger H2

Gresham House Energy Storage Fund - Revenue recovery to provide base for growth

Gresham House Energy Storage Fund (GRID) is the largest UK fund investing in utility-scale battery energy storage systems (BESS). The BESS sector has faced challenges over the past year due to unexpected revenue declines and the slower-than-expected utilisation of BESS by the UK’s Electricity System Operator (see our February note). This has adversely impacted GRID’s NAV and share price, which is currently trading at a 50% discount to its latest published NAV. However, a H124 trading update rele

Ambitious winds of change

M&G’s FY 22 results were strong. It was also the opportunity for new CEO Andrea Rossi to depict clearly his strategy for the upcoming months. While the impetus is clear and the objectives are ambitious, we rather believe in a structural improvement of the business (driven by the higher rates environment) than a commercial one.

Avation (AVAP LN) - Sale of ATRs validates fleet carrying value

Avation, a lessor of 32 commercial aircraft, has announced the sale of two ATR 72-600 aircraft this morning, realising $10m of net cash proceeds after repayment of associated debt. With the sale being completed at book value, the sale price provides a positive validation of the book value of Avation’s fleet, contributing to a net asset value which currently stands at a substantial premium to the share price (NAV: 256p as at 31 December 2023). Sale proceeds should enable Avation either to continu