Lowland Investment Company - Is the tide turning?

Lowland Investment Company’s (LWI’s) unconstrained, multi-cap investment policy differentiates it from most peers in the AIC UK Equity Income sector. It offers investors broad market exposure, outside of the large, traditional ‘income stocks’ at a 13% discount to NAV. The underperformance of small- and mid-cap companies versus larger peers has slowed and a turnaround would be very positive for LWI. Portfolio returns are already benefiting from acquisition activity, spurred by low valuations, and

Lowland Investment Company - Dividend growth and NAV outperformance

Since we published our detailed review of Lowland Investment Company (LWI) in August, quarterly DPS has been increased 4.9% to 1.6p, continuing a long track record of progressive dividends, and maintaining the trust’s position as one of the highest yielding in the UK Equity Income sector. In the financial year to 30 September 2023 (FY23), its NAV total return of 17.2% was 3.4 percentage points ahead of the benchmark, despite larger-cap stocks continuing to lead market performance, a strong headw

The Hardman & Co Monthly: September 2023

Feature article: Equity Income – UK or Global? Should investors widen their horizons? Introduction: ► The UK Equity Income sector (UKEI) is the fourth-largest investment company (IC) sector in the Association of Investment Companies’ (AIC) universe, with £12.5bn of assets (as at August 2023), and is the traditional home for investors looking for income in the equity market. ► The UKEI not only provides investors with a better dividend yield than the ge

Hardman & Co Insight: Equity Income – UK or Global? Should investors widen their horizons?

Introduction ► The UK Equity Income sector (UKEI) is the fourth-largest investment company (IC) sector in the Association of Investment Companies’ (AIC) universe, with £12.5bn of assets (as at August 2023), and is the traditional home for investors looking for income in the equity market. ► The UKEI not only provides investors with a better dividend yield than the general UK market, but also has a strong track record of dividend growth. Indeed, many funds feature on the AIC’s “dividend heroes”

Lowland Investment Company - Capital growth to follow income?

Lowland Investment Company (LWI) targets above-average total returns, from a combination of capital and income, with a multi-cap investment policy that differentiates it from most peers in the UK Equity Income sector. Within its broad range of investment opportunities, selected large caps provide more immediate income, often with defensive characteristics, while small and mid-caps offer faster growth in income and dividends over time. LWI has a long track record of progressive dividends, which h

Lowland Investment Company - A healthy recovery in portfolio income

The last 12 months have been difficult for Lowland Investment Company (LWI). Combined, the weakness in UK mid and small caps’ performance, UK corporate earnings and value investing have been a notably powerful headwind for this multi-cap income portfolio. However, the managers, James Henderson and Laura Foll, are resolute in maintaining their mildly contrarian approach to investing in under-researched small- and mid-sized UK companies for growth in capital and income while selectively blending w

Lowland Investment Company - One of the purest UK domestic plays in the sector

During the first half of the financial year to the end of March 2022, Lowland Investment Company (LWI) lagged a modestly rising market due to its high weighting in mid- and smaller-capitalised UK companies. These companies found themselves out of favour with investors in a risk-off environment, fuelled by the war in Ukraine, rampant inflation, rising interest rates and slowing economic growth. For all of this, earnings per share for the period was 1.72p, some 34% higher than in this period last

Lowland Investment Company - Patient, diversified and ripe for consideration

Lowland Investment Company’s (LWI’s) managers, James Henderson and Laura Foll, run this UK equity income portfolio with a ‘growth first’ mentality, believing that companies with strong market positions and pricing power are best placed to grow their earnings, and consequently their dividends, over time. They cast their net across the market cap spectrum, aiming to own a diversified set of attractively valued – mainly UK – stocks spread across six ‘buckets’, from small-cap income to large-cap gro

Lowland Investment Company - Backing industrial stocks amid higher inflation

Lowland Investment Company (LWI) co-manager James Henderson argues that the current environment of higher inflation and interest rate expectations and supply squeezes should favour industrial stocks that have pricing power and direct access to their end-markets. The trust currently has an industrials weighting roughly twice that of the UK large-cap index, underlining its credentials as an all-cap investor with a bias to value over all-out growth. Henderson and co-manager Laura Foll have turned i

Lowland Investment Company - Positioned to benefit from UK recovery

Lowland Investment Company (LWI) is riding high among its UK Equity Income peers over 12 months as a market rotation towards more cyclical and domestic UK names looks to vindicate its valuation-aware, multi-cap approach. With the Brexit withdrawal agreement now signed, managers James Henderson and Laura Foll say an increase in takeover activity shows private equity and trade buyers see the value in UK companies, and argue that international investors should also return to a market that has got u

Lowland Investment Company - Looking ahead with quiet optimism

Lowland Investment Company (LWI) invests across the UK market capitalisation spectrum, seeking a combination of capital and income growth. Although its smaller-cap bias and value-orientated investment approach mean it has underperformed in recent years, managers James Henderson and Laura Foll at Janus Henderson Investors remain confident in the ability of well financed, well managed companies in areas such as engineering and insurance to recover and grow in the medium term. In the meantime, the

Lowland Investment Company - Value-orientated portfolio with 4.5% dividend yield

Lowland Investment Company (LWI) has suffered a period of poor performance recently, with both its share price and NAV close to 12-month lows, as its value investment style has remained out of favour in a market where investors have preferred highly rated growth companies. Managers James Henderson and Laura Foll continue to see opportunities in both large and smaller UK companies that are growing their dividends, and LWI’s own dividend yield has reached a cyclical high of c 4.5%, a level that ha

Lowland Investment Trust - Overview

The managers of Lowland (LWI), James Henderson and Laura Foll, run a diversified portfolio of mainly UK companies, spread across a wide range of sectors. The duo are very much stock pickers and pay very little regard to the benchmark. The team spends a large amount of time meeting and researching companies across the market capitalisation spectrum, and has a clear preference for what it views as 'quality' companies that have a unique or niche position in their market, which gives them pricing po

A marathon not a sprint

“The single greatest edge an investor can have is a long-term orientation”, according to Seth Klarman, the American billionaire hedge fund investor. On the Hargreaves Lansdown platform the number of people with more than £1m in their ISA has increased from just three in 2012 to 168 today. However while this sounds very impressive, £1m doesn’t seem that fanciful given full historic contributions to PEPs and ISAs since 1987 would have added up to more than £291,000. We calculate that an investor w

LIBERUM: Plus500: Strategic progress pays dividends

Tatton Asset Management (TAM LN) - Record net inflows

Tatton, the leading on-platform discretionary fund manager (DFM) and IFA support services Group has released a trading update ahead of its results to 31 March 2024, due on 18 June 2024.

Hardman & Co Insight: 2023 was an annus horribilis for Quoted UK Infrastructure and Renewable Energy

The focus of Hardman & Co Research is on the nine quoted Infrastructure Investment Companies (IICs) and on the 22 Renewable Energy Infrastructure Funds (REIFs): the stocks analysed are all members of the Association of Investment Companies (AIC). We are updating our publication of January 2023, assessing both the lacklustre share price performances during 2023 and the key issues, including interest rates, inflation and power prices. As a 31-strong group, its combined market capitalisation is no

Ondo InsurTech FY24 Trading Update

Ondo InsurTech has released a brief post-YE update revealing its good progress continued through 2H24 and consequently FY24 will be in line with market expectations.

BlackRock World Mining

BRWM’s managers: we see all the classic signs of high commodity prices...

NextEnergy Solar Fund - Attractive Refinancing

The refinancing of a £135m revolving credit facility and the extension of a similar £70m facility gives NESF firepower as development opportunities for new solar are especially attractive thanks to lower module prices in Europe. They give the fund key financial flexibility at a critical time as it pursues its capital recycling programme.

Jupiter Green

JGC’s fundamental story continues to show resilience, but the discount remains wide…

Resilient FY24, confident long-term outlook

Vp’s full year update highlights sector-leading results, once again benefiting from the diversity of its end markets and the quality of its specialist businesses. With results expected to be broadly in line with expectations, we trim our FY24 PBT forecast by c.5% to £39.0m, a shade below the FY23 outturn (£40.2m). We consider this an impressively resilient performance set against a mixed market backdrop. Under new leadership, a strategic refresh is underway and management is confident in long

The Hardman & Co Monthly: April 2024

Feature article: Steady as she goes, but could be better: A review of investment company liquidity since 2016 Liquidity is the lifeblood of equity markets. The measurement of liquid asset availability to a market or company is a way of gauging a market’s health. This article builds on our previous work, which analysed the liquidity data for non-financial trading companies, by applying the same analytical techniques to the investment companies (IC) space. We analyse liquidity for ICs as a whol

AUM up 30% in FY24, record flows, forecasts raised

AUM jumped £3.8bn or +30% in FY24, reaching £16.6bn on 31 Mar 24, 12% above our previous forecast of £14.7bn. Including 50%-owned 8AM Global, Assets Under Influence hit £17.6bn. Investment performance provided a tailwind, adding £1.5bn to AUM. But our key takeaway from Tatton’s hugely impressive last few years, is that it has designed and implemented a superior offering in platform-MPS with net flows consistently far higher than peers. That leadership looks even more pronounced in H2-24 with net

NextEnergy Solar Fund – High- and growing-income opportunity?

NextEnergy Solar Fund (NESF) is almost 10 years old. Since launch, it has built a £1.2bn, 933MW portfolio of 100 operating solar assets, powering the equivalent of over 330,000 homes, declared dividends totalling £333m, and avoided the emission of about 2.2 Mt CO2e. NESF is on track to pay 8.35p in dividends, with forecast dividend cover of about 1.3x. Share price weakness that has afflicted the whole sector means that dividend translates to a yield of 11.1%, one of the highest in its sector, a

abrdn Private Equity Opportunities – On the way to greener pastures?

Despite navigating through what its managers considered to be challenging conditions in 2023, abrdn Private Equity Opportunities (APEO) was able to report both positive NAV growth and double-digit share price returns in its recently published annual results. APEO’s discount has narrowed by more than 10% in recent months, so that it is trading on a 28.9% discount currently, narrowing from about 45% last October. These figures were generated over a period that saw a slowdown in activity in Europea

Agronomics - A unique offering in a rapidly developing sector

Agronomics (ANIC) invests in cellular agriculture companies. Since mid-2022 it has placed increasing emphasis on companies using precision fermentation technology or providing contract precision fermentation services, as these appear to have greater near-term commercial potential than cultivated meat and seafood. Agronomics’ NAV has risen almost 100% since the inception of the current strategy in April 2019, and looks set to increase further as the company’s portfolio holdings receive regulatory

Primary Health Properties - Strategic and accretive Irish expansion

Primary Health Properties (PHP) has agreed to acquire Ireland’s first Enhanced Community Care (ECC) facility for a total consideration of €30m. With its interim results, PHP highlighted its continued plans for strategic expansion in Ireland, where higher yields support accretive investment in an expanding market. Alongside low-risk, value-creating asset management schemes and accelerating organic rental growth, this represents a key opportunity for continuing growth in income. Our forecasts are

Strong H1'23 results; forecasts upgraded