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Marwyn Value Investors

Closed-end funds and OEICs
everhopeful
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Marwyn Value Investors

#410996

Postby everhopeful » May 11th, 2021, 11:29 am

Does anybody have any view on Marwyn Value Investors (MVI). It is listed as an IT in the UK smaller companies sector on the AIC site. It seems to be a very curious beast in that it holds nearly 50% in cash and 36% of its value is in one company which is Zegona Communications. Zegona is a listed company which sets out to buy and sell European telecoms companies. At the moment it is the biggest shareholder in a Spanish telecoms business called Euskatel. This seems to account for most of Zegona's value.
MVI is trading at a discount of 36% and yields over 7%. If the assets of MVI are half in cash it is difficult to understand the discount unless the Spanish telecomms business is hugely overvalued.
The performance figures for MVI over the last few years look awful but are distorted by capital returns. The shares are illiquid with a 10% spread at the moment but I was wondering about a small punt in the speculative compartment of my portfolio.

monabri
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Re: Marwyn Value Investors

#411008

Postby monabri » May 11th, 2021, 12:28 pm

Cheeky to charge 2.41% ( AIC figure) to hold 50% uninvested in cash...I'll do you a better deal! ;)

https://www.theaic.co.uk/companydata/0P ... erformance
Image

I highlighted the share price performance but the table also shows the relative NAV data.

Here's a comparison with CTY and Vanguard's VUKE ETF. In terms of Total Return over the last 5 years. MVI is the blue curve , well below the other two. Curves produced using HL's comparison tool, link below.

https://www.hl.co.uk/funds/fund-discoun ... ion/charts


Image

Conclusion...managers are creaming off 2.41% and woefully underperforming. I'd keep the cash in your pocket, personally.

everhopeful
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Re: Marwyn Value Investors

#411047

Postby everhopeful » May 11th, 2021, 2:11 pm

I agree with all you say Monabri although the capital performance has been distorted by capital returns. I just cannot get my head around the 36% discount if Zegona is worth even two thirds of its valuation and the rest is mostly cash it seems like MVI is undervalued and is paying over 7% dividend. I did say I was considering it for a speculative punt!

JuanDB
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Re: Marwyn Value Investors

#411056

Postby JuanDB » May 11th, 2021, 2:50 pm

A curious beast seems to be an apt description everhopeful. This is an interesting spot and not one I had looked into before.

Reading the interim report it seems the discount is an acknowledged problem and a 36% discount is after the manager completed a buy back program.

Seems like there is potential for value if the price re-rated. Question is what would be the catalyst for that? Volume is 7k. This just seems unknown and unloved. Perhaps one for the (very) patient?

Cheers,

Juan.

DavidM13
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Re: Marwyn Value Investors

#411067

Postby DavidM13 » May 11th, 2021, 3:24 pm

everhopeful wrote:I agree with all you say Monabri although the capital performance has been distorted by capital returns.


What exactly does this mean please everhopeful? All dividends form part of the total return quoted above in any case.

LittleDorrit
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Re: Marwyn Value Investors

#411091

Postby LittleDorrit » May 11th, 2021, 4:28 pm

The share price chart has been distorted by capital returns.
The total return chart has not.

everhopeful
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Re: Marwyn Value Investors

#411269

Postby everhopeful » May 12th, 2021, 9:10 am

David and Little Dorrit I must agree with your comments about the capital return. When I decided to look into MVI I read lots of information on line including on other boards and I made notes which included a comment about capital return influencing performance. I have tried now to find that comment to try to understand the logic and cannot. It only serves to compound my lack of understanding of MVI.
The price is up 4% today in a very illiquid market.

LittleDorrit
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Re: Marwyn Value Investors

#411277

Postby LittleDorrit » May 12th, 2021, 9:57 am

Capital returns from deeply discounted trusts, or trusts in wind down, can influence investor returns in a positive way in the sense that they are made at zero or negligible discount to the NAV, eliminating the discount on that portion of the capital to the benefit of the investor.
A current example would be KKVL which via 2 capital repayments has provided a total return of slightly over 100% in the last 6 months.
https://lt.morningstar.com/fav18yujpm/c ... F00000TVVF

SKYSHIP
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Re: Marwyn Value Investors

#414133

Postby SKYSHIP » May 22nd, 2021, 1:11 pm

Everhopeful

MVI is actually a very interesting animal which if played with good timing can pay good rewards; whilst holding you are underpinned by assets 50% above the current sp.

What no-one has mentioned is that their largest holding (Zegona - ZEG) trades at 137p. ZEG's cash is 100% invested in Euskaltel, which has in turn received an all cash offer at a 22% premium to the previous Sp. This would result in ZEG having c170p cash; which would be paid back to shareholders - giving MVI a very nice NAV & Cash boost to MVI.

Much of that cash is likely to come back to MVI holders through a capital repayment.

This past week Invesco sold their 36.6% stake @ 107.5p - where the stock went not yet announced

The spread is usually absurd; though from time to time possible to pick up a stray seller.

IMO well worth a small allocation punt - even if you have to pay the current 119.7p...

everhopeful
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Re: Marwyn Value Investors

#414532

Postby everhopeful » May 24th, 2021, 9:54 am

Thank you Skyship. An interesting update. I have taken a small punt a few days ago.


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