Caledonia Investments large fall?

[onslow]

12% fall today, in addition to falls over last few weeks.....no specific news....other ITs had varying performance today

Trading -29% under NAV, of course the NAV is likely lower than its last report.

Been on my watch list for a while, time for a nibble?

[SoBo65]

Perhaps the exposure to pubs, restaurants and bingo of c10%?

[onslow]

excellent point. I forgot about the pubs.

Still, I think pubs eventually will make a comeback. Lets see what happens over the coming weeks.

[BrummieDave]

As with all potential purchases, depends on your objective (growth, income, capital preservation etc.) and circumstance (age, investing horizon, financial situation, retired or not, receiving DB pension or not etc.).

Without such context, how can anyone comment on whether it's a 'good buy' or not; the above defines the criteria for deciding this.

Not having a pop at the OP btw, just so many people come on here and quote a share price and ask for others' views on whether it's a good buy.

Goodbye (Grumpy, stuck in house, getting frustrated )

[Itsallaguess]

As with all potential purchases, depends on your objective (growth, income, capital preservation etc.) and circumstance (age, investing horizon, financial situation, retired or not, receiving DB pension or not etc.).

Without such context, how can anyone comment on whether it's a 'good buy' or not; the above defines the criteria for deciding this.

Not having a pop at the OP btw, just so many people come on here and quote a share price and ask for others' views on whether it's a good buy.

Goodbye (Grumpy, stuck in house, getting frustrated )

Amen to that BD...

Context is everything in investment, as you say, and yet it's almost the least discussed topic on these boards, and that seems especially so when it's often the most important consideration...

Cheers,

Itsallaguess

[SoBo65]

Just been looking at this myself, it is a question of taking a view on the quality of the underlying assets, my conclusion is this is massively oversold and the board are not able to buy back shares to reduce the discount - could be a great opportunity, then again may be cheaper tomorrow......

[richfool]

I held Caledonia back in the 2008 era and I remember it falling quite considerably (compared to other IT's I held). It also took a long time to recover, so I disposed of and haven't held it since. I recollect at that time it held a lot of financials, which probably had a part to play.

[MusingMarket]

It was a nasty fall but very difficult to work out whether this was catching up with the rest of the market (it had done relatively well since the start of the crisis) or whether it was sentiment towards its pub, bingo or other PE holdings - though if this was the case the price action was at least a day late.

Caledonia was 7% in cash at the end of February and claim to have been very conservative with their PE investments over the past couple of years so hopefully just share price action Caledonia can't realistically control. Guess we'll know early April when they should revalue the private equity holdings.

I held Caledonia back in the 2008 era and I remember it falling quite considerably (compared to other IT's I held). It also took a long time to recover, so I disposed of and haven't held it since. I recollect at that time it held a lot of financials, which probably had a part to play.

Financials and London property, this was offset by a well-judged put option on the FTSE 100. Your observation of the time to recover was a mistake I made when buying into Caledonia back in 2009-10. Yes, there was cover, with the sizeable put option, for the initial market downside but the underlying assets were still troublesome and led to its relatively turgid recovery. Still, far from the worst investment you could have made back then but a tracker would have done better when markets recovered.

Looking at the February 2009 AIC factsheet (my go to for these times), Caledonia slightly outperformed on a NAV basis relative to the far-larger-at-the-time AIC Global Growth sector. It did under perform on share price. Caledonia's yearly spread in discount during the great recession was between a low of 3% and high of 23% which was the discount at the nadir of the market at the end of February 2009 (yes, technically a few days later but I don't have those numbers at hand!)

Given the Cayzer family's large ownership of Caledonia it is going to be more volatile in share price given the lack of scope to buyback shares and the effective free-float being around half its market cap.

mm

[Dod101]

I will certainly just hold on to mine which I have held for more than 25 years. They have done fine for me in that time and have very large distributable reserves which Is all that I am concerned with at the moment. I should think that this might be a good opportunity to buy but it depends how you view their unquoted assets, of which they have quite a lot. As has been said they cannot buy in very many shares because of the large holding by the Cayzer Trust.

Dod

[SoBo65]

I will certainly just hold on to mine which I have held for more than 25 years. They have done fine for me in that time and have very large distributable reserves which Is all that I am concerned with at the moment. I should think that this might be a good opportunity to buy but it depends how you view their unquoted assets, of which they have quite a lot. As has been said they cannot buy in very many shares because of the large holding by the Cayzer Trust.

Dod

I will take another look tomorrow, but agree this could be a good entry point, today I made some modest additional purchases of Troy Income and Growth and Mid Wynd Investment Trust. With the market down c5% every day there must come a point......

[MusingMarket]

Factsheet for March:
https://www.caledonia.com/files/file/view/id/1267

RNS for the NAV, perhaps the most detailed of these I've seen:
https://www.londonstockexchange.com/exc ... 93973.html

PE recalculations: Buzz Bingo down 54.5%, Liberation down 38.8%, Cooke down 27.2%, 7IM down 21.3%, others single digit changes (Deep Sea Electronics up a little). Caledonia says this includes expectation of cash burn at Buzz Bingo and Liberation. Liberation has mostly freehold property unlike Buzz Bingo.

Quoted portfolio: only -0.5% over the year to 31st March 2020.

PE Funds portfolio: reduced manager valuations by 16% overall.

So, the share price is at a discount to NAV of around 25% (based on SP of 2435p on March 31st) after these cuts. The revaluation on the PE funds may be a little light imho and there's got to be a fair chance Buzz will go bust (104m debt, 41m cash and no mention of how quick it's burning cash).

Share price up 8% compared to the FTSE 250 up 6% as I type.

mm

[Dod101]

Thanks for that on Caledonia. The important thing for me is that it is a conservatively run IT with plenty of distributable reserves so I guess the dividend will continue to modestly increase.

Dod

[Lootman]

Thanks for that on Caledonia. The important thing for me is that it is a conservatively run IT with plenty of distributable reserves so I guess the dividend will continue to modestly increase.

Yes, it flies under the radar a lot which I like. I have owned this in the past and picked it up again yesterday. Already up nearly 10% so am happy with that.

Just need my RIT holding to recover as well. I see them as similar in some ways.

[Dod101]

Well Loot, RIT closed this evening at 1858p which is off its recent price of around 2100p by a little more than Caledonia at 2500p is to its recent price of about 3000p. In fact they have both recovered quite well.

I am happy to hold both and the dividends though modest look secure.

Dod