UK Equities: Overlooked, oversold, and over here

In this note we look at the gap between perception and reality in the UK equity market, the opportunities and threats in the economic and market outlook, and the emerging consensus that the valuation discount versus other major markets is at or close to an inflection point. We consider the benefits of UK equity strategies both for income investors and for those seeking exposure to the higher growth potential of smaller and mid-cap companies.

Miton UK MicroCap

MINI’s portfolio is unusually cheap…

Miton UK MicroCap

MINI’s share price discount could offer a long-term entry opportunity…

Perfectly formed

Our research suggests that investment trusts really are a better way to gain exposure to smaller companies

Miton UK MicroCap - Overview

Miton UK MicroCap (MINI) was launched in 2015 to invest in the UK’s smallest listed companies, typically AIM-listed stocks with market capitalisations of less than £150m. The strategy focusses on generating capital growth, the managers Gervais Williams and Martin Turner looking for companies that are positioned to generate substantial surplus cash in excess of market expectations in the near term. As discussed in Portfolio, the trust itself was launched to take advantage of major global economi

Great expectations

Once upon a time I was lucky enough to spend a few days on a junket to Morocco, where I stayed at a hotel in Marrakech called La Mamounia, occupying the grounds of a former royal palace built by Sultan Mohammed ben Abdallah in the 18th century and described by Winston Churchill as ‘the most lovely spot in the whole world’. On my last night at the hotel I won approximately 52 million dirhams1 in the hotel casino and, feeling somewhat groggy the following morning after celebrating my victory unti

Don’t fear the reaper

With market direction hard to call, we consider the case for taking a long- term view in the investment trust sector...

Vive la revolution

‘Quality’ investing styles have enjoyed structural tailwinds for around 40 years. Over this period, cyclical variances have happened, but the trend towards bigger companies, increased concentration, greater ease of movement of capital across borders, and economies of scale has ultimately always prevailed. Quality has consistently won out. As we discuss below, the improvement to the relative return profile of quality factor investments has been greater than any other, whilst value as a style has

Miton UK MicroCap - Overview

Miton UK MicroCap (MINI) aims to provide shareholders with capital growth over the long-term. Managed by Gervais Williams and Martin Turner, MINI typically focusses on investment in companies with market capitalisations of less than £150m, usually listed on the AIM market. As discussed under portfolio, MINI was launched in 2015 with a view to positioning an investment vehicle for the longer-term cycle that the managers perceived to be in the offing at the time. There is a deep underlying theme

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

This time next year Rodney...

I once sat through a three-hour performance of Samuel Beckett’s Waiting for Godot at the Theatre Royal which, despite the best efforts of Ian McKellen and Patrick Stewart – both of whom I like very much – to this day remains one of the dreariest experiences of my life. It is on that note that we welcome 2021, with all the promise it holds, and return to our ‘top picks’ for 2020, a year which is probably best summarised (for those of us lucky enough to have been not directly impacted by the virus

Miton UK MicroCap - Overview

Miton UK MicroCap Trust (MINI) was launched in 2015 and invests predominantly in a portfolio of smaller UK companies, typically with a market capitalisation below £150 million. The managers, Gervais Williams and Martin Turner, argue that the growth potential of smaller companies is less dependent on general economic conditions than larger companies’; their view being that smaller companies often have strong growth potential regardless of whether they operate in a market that is contracting overa

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

Miton UK MicroCap - Overview

Miton UK MicroCap (MINI) is a £69m investment trust offers investors a domestically-focused and differentiated portfolio invested in the smallest companies in the UK. MINI was launched in 2015 in anticipation that globalisation would cause political upheaval, and on the assumption that microcaps were set for a revival. The managers pride themselves on the portfolio being unlike any of the major indices, or the other smaller company trusts in the sector for that matter, with an active share of a

CMD - Broadening & deepening client relationships

FLASH: In-line trading update

'Airlines will be shocked when Covid leases run out and rates go up’

Critical Metals Plc - Molulu Operational Update - Target Price £1.14 ps

Event On the 15th May, Critical Metals plc released an operational update relating to their Molulu copper project in the DRC. Key Points 1. 6,500t of copper ore grading 3% copper has been mined 2. The mining focus is moving towards the high grade sulphide copper ore grading above 8.3% copper 3. No cobalt has been identified in the mining so far using hand-held XRF 4. Dewatering of the pits has begun with a trench decanting water from the small pit. Implications As soon as the road rehabilitation

Morning Note – 5 June 2023

Reassuring AGM statement

Cenkos: Duke Royalty Ltd -- Record revenues and more to come

Duke has released a Q1/24E trading update which points to a continuation of steady growth in recurring cash revenues and resilient underlying portfolio companies. Guidance for the quarter is for £6m of recurring cash revenues, and total cash revenues are expected to be c£7.5m once the buyout premium from Instor is accounted for. Duke's valuation looks very compelling at current levels with the FY24E dividend yield over 10% whilst being backed by FCF generation.

LIBERUM: NewRiver* - Higher occupancy driving earnings growth despite macro challenges

LIBERUM: Ramsdens Holdings* - Worth its weight in gold

Acquisition of Silver Royalty

Trident Royalties Plc (AIM: TRR) has, this morning, announced the acquisition of two royalties and a production-linked milestone payment over the La Preciosa Silver Project, owned by Avino Silver & Gold Mines Ltd (TSX: ASM, mkt cap US$87m) in the State of Durango, Mexico. The consideration consists of US$7m cash to Coeur Mining (NYSE: CDE, mkcap US$1.1bn) on closing with a further US$1m in either cash or shares at Trident's election upon receipt of the milestone payment. The acquisition is Tride

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

NewRiver REIT+ (NRR, House Stock at 83p) - Final results preview

Hybridan Small Cap Feast - 07 Jun 23

7th June 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

Trading at trough valuation?

We review the investment case in an altered macro context. The stock currently trades at trough valuation of 13% discount to NAV. While some de-rating is justified, in our view the current price ignores positive aspects of the case and already prices in substantial mark-downs. Higher rates and increasing leverage justify a higher discount Some of the de-rating from the past 5Y average premium of 6% is justified given the magnitude of the increase in bond yields. HICL has only raised its discoun

Very strong CY22 - CY23 upgraded 10%