Ingredients for success

This year has been full of surprises, and not many of them good ones. Inflation figures surpassing expectations and the Russian invasion of Ukraine have been key drivers of tumultuous markets. Prior to 2022 investors were well rewarded for simply following trends, and the volatility this year is perhaps a painful reminder of the necessity for good portfolio diversification. Diversification of asset classes is important, but so is diversification within asset classes. Simply buying growth or buyi

Baillie Gifford Shin Nippon

BGS has the best long-term track record in the Japanese sectors

Baillie Gifford Shin Nippon - Overview

Baillie Gifford Shin Nippon (BGS) is a small-cap Japanese equity strategy, giving investors access to rapidly growing companies. Lead by Praveen Kumar, BGS’s strategy is to take a highly active, long-term view to bottom-up investing. This involves identifying companies which are able to either disrupt incumbent industries or offer solutions to many of the problems facing Japan, with many of BGS’s investments being held for over a decade. While the investment process is flexible, as we outline in

Can you teach an old dog new tricks?

Growth has outperformed value in Japan this year, as it has for quite some time. However, there are distinctive qualities to growth and value in Japan which mean they each offer something different to a portfolio. In particular, value investing in Japan offers a potentially more exciting opportunity set with a catalyst for recovery that doesn’t rely on a global shift of interest rate regime or economic environment.

Baillie Gifford Shin Nippon - Overview

Baillie Gifford Shin Nippon aims to maximise capital returns by investing in the equity of Japanese smaller companies. The management team, led by Praveen Kumar since 2016, are long-term growth investors, and aim to identify disruptive companies which will be long-term winners and to hold them through cyclical changes in sentiment and revenues until their potential is realised. The approach is ultra-long term and ultra-active. The active share of the portfolio was 94% at the end of the last fin

Best in class

Today, we introduce our investment trust ratings. According to the quantitative screens we have selected in an attempt to highlight the best performers in the closed-ended universe, the trusts discussed here have been the best in their classes over the last five years. We have selected trusts using two different sets of criteria, aiming to identify the top performers for capital growth and for achieving a high and growing income. There are many rating systems for open-ended funds, but no quantit

The Great British Buffett

Research due to be published in the CFA’s Financial Analysts Journal claims to demystify Warren Buffett’s astonishing long-term success, and shows how he has achieved his incredible run of returns. In a nutshell, the Buffett “secret sauce” is leveraging up low beta, cheap, high quality stocks. This approach has allowed Buffett to generate a high information ratio - a ratio used by analysts to show risk-adjusted returns relative to a benchmark - over a multi-decade career, and returns which have

Fake news...

Popular wisdom has it that, while over the long term small caps have outperformed large caps, this has tended to be at the cost of greater levels of volatility. However, our research suggests that the extent of this volatility is overstated. In fact, the last five years have seen lower volatility from small-cap stocks relative to large caps across the world. This could be due to the fact we have enjoyed an extended bull run, or that the UK government has been utilising quantitative easing to mai

Full steam ahead?

With strong performance from most emerging markets, smaller companies and technology, 2017 will be remembered as the year that rewarded those investors willing to take some risk with their investments. Despite initial worries about political risk stemming from Brexit and upcoming European elections, equity markets in general soared. For the first time in recorded history the S&P 500 made gains in every month of the calendar year, the MSCI Emerging Markets Index ended the year up 30.55% (in sterl

Uncertain outlook comes as no surprise

We take a positive view of Legal & General’s FY 22 results. Despite the tough environment, the Group managed to outperform expectations – something which was hardly a given for such a large asset manager. With L&G being widely exposed to the UK economy, it might be a call one does not want to make but the firm’s business remains one of spreads – as long as a default does not occur. We remain positive but concede that L&G embeds more risk than we had assumed.

Very strong CY22 - CY23 upgraded 10%

Hybridan Small Cap Feast - 21 Feb 23

21 February 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment objec

LIBERUM: Alpha Group International* - Highly attractive global growth opportunity

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.

Hybridan Small Cap Feast - 06 Mar 23

6 March 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment objective

Belvoir Group - Debt free, entrepreneurial and diverse

2022 followed on from the strongest year for property in recent history, but Belvoir has, nevertheless, reported a robust set of full-year results further evidencing the power of its franchised model and strategy. FY 2022 revenue was up +14% (+2% like-for-like), gross profit up +6% and adj. PBT down -1% as the resilient Lettings income and expanding Financial Services business continued to grow (both +4% LFL), while housing Sales fell (-15% LFL) as market conditions weakened and administrative c

Morning Note – 27 March 2023

Hybridan Small Cap Feast - 14 Mar 23

14 March 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment objectiv

Critical Metals Plc - Initiating Coverage - 20th March 2023

Critical Metals is a British company that has acquired a 70% interest in a producing Molulu copper mine in the Katanga region of the DRC. The focus of the company is in the natural resources sector in Africa focused on the strategic or critical metals as defined by the United States Government Survey list in Open-File Report 2018-1021 and the Critical Raw Minerals as defined by the European Commission. The main catalysts for 2023 will be the announcement of the first sales of copper ore. This i

LIBERUM: Pollen Street * - Clear fundraising momentum

NAHL Group - Finals

NAHL generated growth in both its Personal Injury (PI) and Critical Care divisions, the former despite a continuation of subdued market conditions – hence market share gains. Results were in line with our forecasts but with a significant reduction in net debt which is especially welcome in the current high interest rate environment. Group strategy remains intact and in PI that means building the embedded value of future cash flows in NAL while flexing enquiry placements to maximise cash generati

Positive update - EPS upgraded by 5% p.a.

H&T (initiation of coverage): Pawnbroking royalty, with strong, profitable growth

Founded in 1897, H&T is the UK’s leading pawnbroker, with 269 stores, and it has gained a strong pawnbroking market share in recent years. While it is growing ancillary gold buying and forex products, its core is pawnbroking and related retail services. As other small-sum, short-term lenders have withdrawn, H&T’s well-capitalised, low-risk proposition has unique growth opportunities, with the pledge book up over 50% in 2022. The lessening of legitimate competition at a time of heightened demand

Oakley Capital Investments Ltd (OCI): 2022: NAV returns driven by EBITDA growth

The January trading statement announced NAV (662p per share), total NAV return (24%), NAV growth driven by EBITDA growth (65%), modest multiple expansion (35%), investments (£271m), realisations (£244m), available finance, including cash (£210m), and commitments (£929m). The detailed results announcement highlighted i) 2022 exits, on average, 70% above carrying value, ii) 22% investee company average earnings growth, iii) weighted average EV/EBITDA of 15.9x, below listed market levels, iii) a PE