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  • 28 Aug 19

Gabelli Value Plus+ Trust - Overview

With exposure across the market cap spectrum, and a disciplined proprietary value investment philosophy, the Gabelli Value Plus+ trust offers a differentiated investment solution and portfolio to a typical US equity vehicle. Using the proprietary Private Market Value with a Catalyst™ investment process that focuses on both the intrinsic value and strategic premium that a company offers a potential purchaser, the managers seek to identify companies which are trading on a substantial discount to the price which an informed buyer would pay for an entire business in a negotiated transaction. In addition to this, they seek to identify a catalyst(s) to realising this value, looking at a variety of factors or potential drivers of a rerating. These can be company specific or relate to the industry at large.

Companies: Gabelli Value Plus + Trust
  • 05 Jun 19

USA! USA. USA?

2018 saw the first negative calendar year for the S&P 500 and the Dow Jones since 2008 and, despite a subsequent rally, sentiment remains divided between those who believe the US market has more room to run, and those who think the longest bull market in history will soon come screeching to a halt. Instinctively, it feels like a correction must be due and, indeed, a recent survey of Kepler Trust Intelligence readers showed the majority feel that there are choppy waters ahead. Among those who felt that the outlook was negative, the concern raised most often was the impact of any escalation in the ‘trade-war’ talk between China and the United States, while the national ‘black dog’ that is Britain’s constant companion – Brexit – continues to weigh on investor spirits closer to home. However, there are many other indicators which suggest the bull market could continue, making this a difficult time for investors wondering which way to jump. Against this confusing backdrop we look at three different scenarios for the US over the next year, and identify a number of trusts which are positioned well for each.

Companies: USA ATT GVP JUSC BRNA IBT JAM TPOU

  • 31 Oct 18

The Trump effect

Two years after the shock election of Donald Trump and with the US mid-term elections approaching on 6 November, we thought it a good time to strip out all the noise and bluster and assess what the Trump administration has really meant for US markets and the trusts that invest in them. We can identify two key policy moves Trump has achieved as President: tax reforms and trade tariffs. Each has significant ramifications for certain sectors and trusts, some good and some bad. The long-term effects are still in the balance, with the midterms a crucial fork in the road. Since Trump was inaugurated as president, the landscape of the US market has arguably transformed, with greater optimism around the near-term prospects for equities and greater pessimism around international relations. We take a look at how trusts have positioned themselves vis-à-vis these trends. “I promised the American people a big, beautiful tax cut for Christmas. With final passage of this legislation, that is exactly what they are getting.” Arguably the most significant piece of Trumpian legislation for the economy and the stock market was his wide-ranging tax reform introduced at the end of December 2017. This included cutting n the corporate tax rate from 35% to 21% and a dramatic change to the current model of taxation, in particular the taxation of US corporations’ foreign subsidiaries.

Companies: IBT USA BRNA ATT JAM JUS GVP GVP

  • 18 Sep 18

Gabelli Value Plus+ Trust - Overview

The Gabelli Value Plus+ Trust is a differentiated US equity portfolio with a high active share and a wide-ranging all-cap approach focused on identifying undervalued companies, including those with a strategic value to trade buyers. The trust was launched in 2015 during a difficult period for a value approach, but over the long run the strategy has performed well, returning 16% a year compared to the 12% of the US market. The aim is to produce real returns of 10% a year, and the focus is on bottom up analysis with no attention being paid to the indices – the trust’s portfolio has an active share of 94% to the S&P500, with a bias to small and mid-size companies where the managers believe they can add more value and which are more often the subject of takeover bids. The trust also invests a portion of its funds (currently around 10%) into companies that are the subject of takeover offers, which gives it low-risk returns not dependent on market movements. The trust focuses on total return rather than generating an income, so distributions are not guaranteed. Thanks to the value style being out of favour the discount has widened this year, although the trust traded on a premium the last time value rallied, following the election of Trump in late 2016.

Companies: Gabelli Value Plus + Trust
  • 29 Jan 18

Gabelli Value Plus+ Trust

The Gabelli Value Plus+ Trust is a differentiated US equity portfolio with a very high active share and a wide-ranging all-cap approach focused on identifying companies wihch the managers believe are undervalued, including an element of exposure to companies which are the target of mergers and acquisitions. Gabelli is a well known name in the United States, managing assets in excess of $40bn and the trust taps into the ‘Private Market Value (PMV) with a Catalyst’ investment strategy, developed by founder Mario Gabelli in the 1970s, which is now taught as part of the value investing course at Columbia Business School. Whilst there is no guarantee that this can be replicated in future the strategy has delivered significant outperformance relative to the wider US market over the long term, delivering ‘up’ years in 35 out of 40 between 1977 and 2016. Launched in February 2015, the Gabelli Value Plus+ Trust (GVP) had kept pace with the notoriously slippery S&P 500 index until the start of 2017 – outperforming it by a small margin – but fell behind last year as the index, and in particular mega-caps toward which the trust is underweight, raced ahead. However GVP’s managers don’t benchmark themselves against an index and, instead, aim for absolute returns typically to the tune of inflation plus 10%. The strategy which the trust mirrors tends to generate its relative outperformance in falling markets and has since inception – typically – lagged behind during quarters where the market has risen strongly, whilst outperforming the market when it has been in negative territory. Whilst it may underperform should mega caps rally again - having relatively low exposure to the largest US stocks - the managers believe the trust stands to benefit from increased M&A activity in the US, as companies onshore their money in the wake of President Trump’s tax changes, and from a positive outlook for domestically focused US stocks – which are a core focus for the trust.

Companies: Gabelli Value Plus + Trust
  • 29 Jan 18

What lies beneath

In a report early last year, we analysed the argument surrounding whether value investing (a style that has significantly underperformed relative to growth investing) was about to make a sustained comeback. Simply put, value investing involves buying shares in companies that the managers believe are ‘cheap’ relative to the wider market and their own histories. Many value managers, however, will only buy ‘cheap’ stocks where they have pinpointed a potential catalyst they believe will lead to share prices increasing (by analysing metrics such as cashflow, leverage, balance sheets and external factors) in order to avoid ‘value traps’ - stocks that are still in a period of decline or worse, are heading for total collapse. Growth investing, again put simply, means buying companies that are displaying above average earnings growth. Most growth managers will follow a GARP (growth at a reasonable price) approach, which means they don’t mind paying higher than average valuations for a stock if they believe future earnings growth is undervalued by the wider market. In recent times especially, value investing has become synonymous with more cyclical stocks such as mining, energy and banks, while growth investing has meant a focus on more defensive companies (with futures which aren’t dependent on economic growth) such as utilities, telecoms, tobacco and other consumer goods stocks. Those who predicting that value stocks were on the verge of a new era of outperformance were proved wrong (or too early), as they generally underperformed growth over the course of 2017. However, in our report last year (and with the proviso that the past is no guide to future returns), we found that had been a correlation between the relative performance of value versus growth stocks and the trajectory of UK government bond (or gilt) yields, with value generally underperforming when yields fell (or when bond prices rose) and outperforming when yields rose (or when bond prices fell). Government bonds have delivered almost unprecedented risk-adjusted returns over the past three decades due to factors such as credit boom prior to the global financial crisis and ultra-low interest rates over the past 10 years. However, many believed bond yields would rise last year (as they did in 2016) as inflation picked up in the UK following Brexit-induced weakness in sterling, coupled with Donald Trump’s commitment to economic stimulus. However, despite these two strong forces at work, 10-year gilt yields fell from their peak of 1.54% in late January 2017 to 1.26% by the end of the year (representing a fall of c.20%). We don’t claim to be experts in global fixed income markets, but the commonly-held view among those who do, is that bond yields will rise over the coming years (though as we mentioned last year, many have incorrectly called the collapse of the bond market for a number of years now…). While this might not be repeated, and again like last year, our analysis shows that value stocks have historically outperformed growth when bond yields have risen. However, as we highlight in this report, it is surprising how little exposure the ‘average’ UK investor has to “value” as a style, with the large majority of inflows into equity funds heading towards funds with a clear “growth” or “quality” bias. As such, if this long-anticipated revival in value investing does indeed occur – most investors look likely to miss out, or worse, be hit by capital losses.

Companies: AGT WTR ASL TMPL GVP

Research, Charts & Company Announcements

Research Tree provides access to ongoing research coverage, media content and regulatory news on Gabelli Value Plus + Trust. We currently have 11 research reports from 2 professional analysts.

Open
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Range Today
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52 Week
116/138p
Daily Volume
N/A
# Shares
98.3m
Daily Liquidity
(0.02%)
Pension Liability
£0m
Enterprise Value
£130.4m
Market Cap
£130.2m
Latest PE (hist)
175.65
Div Yield
0.56

Latest News/RNS

(more news)
Date Source Announcement
12Nov19 10:28 RNS Directorate Change
02Oct19 15:46 RNS Listing Rule 15.6.8
18Sep19 15:25 RNS Holding(s) in Company
11Sep19 07:00 RNS Update on Continuation Vote
05Sep19 07:00 RNS Proposed Tender Offer and Continuation Vote
28Aug19 12:05 RNS-R Kepler Trust Intelligence: New Research
01Aug19 16:19 RNS Total Voting Rights
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  • 11 Nov 19

LIBERUM: AFH Financial Group* - Organically growing and improved FCF

AFH continues to grow at an impressive rate compared to peers in a tough market environment. It has delivered 8% organic net flows and new business written is up 46% yoy.

Companies: AFH Financial Group
  • 21 Oct 19

Quarterly Research Outlook Autumn 2019

Following continued delays of a Brexit agreement, few sectors within the UK market have remained attractive to investors despite low valuations. One sector which has continued to outperform despite the political drama has been the UK video gaming sector (henceforth UK gaming), which we are fans of. We believe a combination of sector-leading growth, strong cash conversion and timely cyclical positioning support our positive view on the UK video gaming sector.

Companies: ABBY AMS ANX ARS ATYM AVON BLVN PIER BUR CGS CAML CDM CSRT TIDE CYAN DTG DEMG ELM EMR FPO FDEV GTLY GENL GHH GRI GEEC GKP HMI HAYD HEAD HILS HTG HUR IBPO IOG INDI JHD JOG KAPE KEYS KWS KCT KGH LAM LIT LOK MACF MANO MOD OXIG PCA PANR APP SRE PHC PMO RBW RMM RBGP REDD RSW RNO ROR SUS SCPA SEN SHG SOLG SOM SUMO TM17 INCE TWD TRAK TRI VNET VTC ZOO ZTF

  • 04 Nov 19

THE MONTHLY November 2019

The trade-off in the risk/reward for gold and gold mining equities is improving, as central banks push the current iteration of the post-World War II Bretton Woods financial order towards its limits.

Companies: AVO AJB AGY ARBB BUR CLIG DNL DPP FLTA GTLY GDR MCL MUR NSF PCA PIN SRE PHP RE/ RECI RMDL STX SCE TON SHED VTA W7L

  • 13 Nov 19

End of the litany of Q3 19 bad news

British Land closed the British earnings season with no major surprises. The good news was the stable Offices segment. The bad news was the 10% negative revaluation in the Retail business. Once again: wait for the Brexit consequences.

Companies: British Land Company
  • 14 Nov 19

Active management drives +5% EPRA NAV growth

Urban Logistics REIT (“ULR”) has reported in line interim results. Rental growth continues, which in turn drives valuations and the underlying EPRA NAV: +5% in H1 to 145.2p. ULR’s brand of active asset management continues to yield results, with logical capital recycling into higher yield assets and +£0.6m rent uplifts achieved on reviews. We do not make material changes to our forecasts. We believe that the valuation remains attractive – 6%+ prospective dividend yield, trading at a 10% discount to NAV – in light of sustained value creation, clear quality of income (6.1yr WAULT) and further opportunity from a space in structural growth with strong demand.

Companies: Urban Logistics REIT
  • 25 Sep 19

Cenkos: 1pm Plc - Foundations for sustainable, faster growth

1pm's FY19A results were well flagged by June's trading update with revenues of £31.8m (+6% YoY), adj PBT of £8.1m (+4%), while adj EPS grew +2%. Growth this year has come from purely organic means. FY20E will be somewhat of an investment year, building out management and infrastructure to accelerate revenues strongly over FY21-22E. 1pm is focused on sustainable lending over chasing volumes at lower margins.

Companies: 1PM
  • 11 Nov 19

Interims show strong growth

What’s new: Tatton Asset Management’s results for the six months to 30 September revealed strong growth in divisional revenue and profits: ▪ 15% rise in Group Revenue to £9.73m (1H18: £8.45m) - AuM based revenues rose 19% to £7.10m (1H18: £5.99m), with Tatton Investment revenue rising 35% and wrap income declining; - Paradigm revenues rose 7% to £2.60m (1H18: £2.43m); ▪ 23% rise in Group adjusted operating profit to £4.13m (1H18: £3.35m) - 23% rise in AuM based profit to £4.27m (1H18: £3.48m) which is 42% rise in Tatton Investment profits (as previously reported); - 11% rise in Paradigm profits to £0.91m (1H18: £0.82m) and - 11% rise in central costs to £1.1m (1H18: £0.96m) ▪ Adj FD EPS rose 18% to 5.4p (1H18: 4.6p); ▪ Interim DPS was increased 14% to 3.2p (1H18: 2.8p); ▪ Net cash was £9.17m after paying £3.1m final dividend and £2.0m for Sinfonia, with operating cash conversion at over 100%. The Group trading update on 17 October had already announced: ▪ 14.8% rise in Group AuM to £7.0 billion (30/9/18: £5.7 billion: 23% rise YoY; 31/3/19: £6.1 billion: 14.8% rise in the 6 months period): - 1H organic net inflows of £441m increased AuM by 7.2%; - the Sinfonia acquisition added £135m, increasing Group AuM by 2.2%. Outlook: Paul Hogarth, Founder and CEO, notes: “monthly net flows continuing to perform well from both existing and new IFAs despite an uncertain and volatile market” and the reorganisation of the group’s “IFA support services businesses under the existing Paradigm brand but with one simplified operational and management structure …[should enable] improved efficiencies and opportunities”.

Companies: Tatton Asset Management
  • 12 Nov 19

Huge ambition with resources available to execute

Kingswood presents investors with a rare opportunity to achieve outsized returns from an institutional grade financial services management team positioned to tap into underlying sector tailwinds in retail wealth management. The largest shareholder, KPI Nominees, has injected and underwritten new capital to establish a robust and efficient operation which is now able to benefit from an additional £80m growth capital from Pollen Street (£4.8m drawn), a global investor with a strong track record in financial services. The group aims to offer best in class, vertically-integrated wealth planning and investment management services backed by leading technology, a rigorous risk and compliance environment and innovative product offerings. Below we outline the potential for this model and note the shares could deliver a medium-term 4.8x return, backed by a UK and US-led acquisition strategy. An exciting first step towards rapid growth.

Companies: Kingswood Holdings
  • 13 Nov 19

Gamesys Group - Growth across the enlarged group

Gamesys’ pro forma Q319 revenues increased by 20% to £144.3m due to 57% growth in Vera&John (international markets), strong momentum in the acquired Gamesys business and, encouragingly, a return to growth in the Jackpotjoy UK brand. The EBITDA margin declined 680bp to 26.7% as a result of higher taxes and marketing spend. We are raising our FY19 revenues estimate by 2.3% but keeping our EBITDA forecasts unchanged. We continue to forecast net cash flow of £105m in FY20 and our net debt/EBITDA falls from 3.0x currently to 2.0x at end FY20. The stock trades at 6.0x P/E and 7.1x EV/EBITDA, with a 13.8% FCF yield for FY20e.

Companies: Gamesys Group
  • 29 Aug 19

Now is the time for profit

NSF has reached the turning point in its strategic development. Having invested heavily in infrastructure, controls and people, it has substantially built the franchise. The pace of further investment is expected to now slow, at the same time as payback from historical investment becomes increasingly visible. We see profit growth accelerating sharply, driven by wider jaws between revenue and costs in the branch business and guarantor loans, efficiency improvements in home collect, and improving credit. Assuming NSF is successful in securing additional lower-cost funding, we expect funding costs to relatively reduce, and the funding mix to improve. Our strong growth forecasts are unchanged.

Companies: Non-Standard Finance
  • 03 Sep 19

H1 EPS up +23% emphasises the opportunity

Belvoir has reported a strong H1 with adj. EPS up +23% driven by managed service fees up +5%, Financial Services net commission up +160% (+21% organic) and tight cost control. Cash generation remained strong with 96% of adj. operating profit converting into cash, and the interim dividend was maintained at 3.4p (providing a 3% yield on its own). Management has highlighted a promising start to H2 and we consequently make no changes to our forecasts. As we stated in our recent initiation note, Belvoir’s franchise model maximises entrepreneurial potential, flexibility and cash flow while minimising risk. With the UK residential property market undergoing structural change at the same time as economic uncertainty, this is providing Belvoir with significant potential to gain market share – as today’s results evidence. We reiterate our 190p target.

Companies: Belvoir Lettings
  • 07 Nov 19

Cenkos Securities - Resilient broker with a substantial track record

Cenkos has a record of successful fund-raising for clients and maintaining annual profitability since its inception in 2005. This reflects its focus on client outcomes, a well-established network of business relationships and flexibility in its cost base. Its client relationships should stand it in good stead when market conditions become more favourable. In the meantime, the company’s strong balance sheet, with substantial capital headroom, provides reassurance and Cenkos would not need to attain earlier levels of return on equity to warrant a materially higher valuation.

Companies: Cenkos Securities
  • 11 Nov 19

Fidelity China Special Situations - Domestic opportunities offer exciting prospects

Fidelity China Special Situations (FCSS) offers investors direct exposure to China for a portion of their portfolio, aiming to deliver long-term capital growth from investing in companies listed in China, and Chinese companies listed elsewhere. Since the trust’s inception in April 2010, FCSS’s NAV total return has increased by nearly 11% pa. The portfolio has a bias towards mid- and small-cap companies, which tend to be less well researched and potentially mispriced. The manager, Dale Nicholls, is focused on opportunities related to rising domestic consumption, which in his view is unlikely to be disrupted by the ongoing US-China trade dispute.

Companies: Fidelity China Special Situations
  • 12 Nov 19

Portfolio update reiterates progress

Tern has issued an update on the activities of its portfolio companies so far in the second half of 2019. It follows recent fundraises both for Tern itself (of £1.75 million) and one of its investee companies – see our note “Dual fundraises endorse Tern’s strategy”. The Group confirms that it has invested £1.1 million in its portfolio companies since the end of June 2019, mainly in the form of convertible debt. It also says that turnover of Tern’s four principal portfolio companies for the nine months ended 30 September 2019 was ahead of last year. If the four businesses conclude certain outstanding opportunities, their turnover should meet Tern’s expectations of a 50% increase for the full year. Tern is in the earlier stages of discussions regarding several potential new investments. We note the recognition of the investee companies by investors and clients which is reflected in the fundraisings, contract wins and participation in projects by the businesses.

Companies: Tern
  • 12 Nov 19

Yield decompression everywhere; but the City of London resists

Regional retail was the usual victim in H1 19. However, LandSec’s assets in the City of London resisted pretty well.

Companies: Land Securities Group