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

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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

The fight in the dog

Smaller companies are usually a problematic area to invest in during significant downturns or recessions; and the sharp fall in 2020 hasn’t been an exception. In this article we assess the performance of smaller companies trusts throughout the pandemic, while identifying the factors that have differentiated the winners from the losers. This includes the impact that cash, market cap exposure, sector allocation, revenue exposure and growth or value biases have had, with some surprising results. We

First Quarter of 2020

We have knitted together the impact on the investment companies from what is now widely considered to be the most severe pandemic in a century. The collapse in asset prices over the latter part of March, brought the curtain down on an up-market that lasted more than ten years. In amongst this, there were pockets, such as the technology sector, that held up well. For many industries, the worst is still to come, as we brace ourselves for the sharpest contraction to global growth since the US great

Hold fast

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Morning Note – 5 June 2023

Reassuring AGM statement

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NewRiver REIT+ (NRR, House Stock at 86p) - Final results

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Hybridan Small Cap Feast - 07 Jun 23

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Trading at trough valuation?

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