Temple Bar TMPL

[ADrunkenMarcus]

A lot of movement with investment managers at the moment, and Alistair Mundy has not got a very good record at Temple Bar, not in recent times anyway. He has always been a contrarian of course and that will not always work but Investec (or Ninety One as it is now called) is not doing very well these days. I welcome the moves by Temple Bar because at least they are doing something about the poor performance.

It will be interesting to watch developments.

Good luck to Mr Mundy. I hope he has not got the C virus.

I agree with all of that.

Ironically, if we look at dividend growth in any case, TMPL had been appearing to pick up in the last year or two with some strong dividend raises. However, the companies in the portfolio have been hit very heavily. If they are able to maintain the current dividend, which is not a given over the long term, then we may see some very tiny raises such as 0.1% to try and keep its record going as a dividend growth trust.

Best wishes,

Mark.

[Arborbridge]

I add to Dod's thoughts about Alistair Mundy - I hope he is OK. As for changing the portfolio, or a new direction, or whatever, it's a bit late. Not only that, I bought into Mr Mundy as a contrarian and although things have turned out badly, particularly this year, I would rather carry on knowing that I had one IT which was contrarian. To give up being a contrarian just when things turn rough, proves you are not really contrarian at all. It only works for those who can buy when there's blood on the carpet and wait, and wait - often a very long time.

Perhaps we will all turn into momentum investors now.

Arb.

[ADrunkenMarcus]

To give up being a contrarian just when things turn rough, proves you are not really contrarian at all. It only works for those who can buy when there's blood on the carpet and wait, and wait - often a very long time.

I don't think we can put TMPL's Board in that category. They basically forced him to remove the gearing and sell down some positions at lower prices, as I understood it.

Best wishes

Mark.

[Arborbridge]

To give up being a contrarian just when things turn rough, proves you are not really contrarian at all. It only works for those who can buy when there's blood on the carpet and wait, and wait - often a very long time.

I don't think we can put TMPL's Board in that category. They basically forced him to remove the gearing and sell down some positions at lower prices, as I understood it.

Best wishes

Mark.

In other words, the board is not contrarian, but the manager they've contracted to is. And as soon as it gets rough, they get scared. Being contrarian only works if you take the pain, so if they weren't prepared for that, they shouldn't have gone that way.

[Dod101]

In other words, the board is not contrarian, but the manager they've contracted to is. And as soon as it gets rough, they get scared. Being contrarian only works if you take the pain, so if they weren't prepared for that, they shouldn't have gone that way.

I think you are being a bit unfair. Temple Bar has done very little for the past several years. In December 2014 the share price was £12 after which it meandered up down and sideways between around £11 to about £12.50 until the short lived Boris bounce in February this year when it was briefly nearly £14. A bit like Mark Barnett, even when his style was not working he would not change and of course it was not his money, but the Directors are accountable to the shareholders, the manager is not, at least not directly. Any Board can only allow that state of affairs to carry on for so long and they have for at least five years.

Anyway Mundy has not gone yet but is probably at least halfway out of the door. Invesco/Ninety One are not doing too well these days.

Dod

[Parky]

Merryn Somerset-Webb has now dumped TMPL from the Money Week "model investment trust portfolio". Her views are often worth listening to IMHO.

[LittleDorrit]

Not a holder here, but all ways read the factsheet for the managers thought for the month and for who ever did the cartoon.
I doubt that the replacement will be as wide ranging.

[Parky]

TMPL has now fallen over 50% from its recent high. I have given up trying to imagine what the real valuation could be for this and similar ITs, and am seriously considering topping up in a big way, solely on the "reasoning" that what has fallen the furthest must go up a long way eventually.

I think the market has now lost sight of fundamentals and analysis, and is being driven by weight of money and fomo (fear of missing out). TMPL seems to have settled at a nice discount to NAV of around 10%, and I am wondering what they will do with the 15% of the portfolio now in short-dated gilts?
I have changed my mind again and topped up my ISA holding.

[ADrunkenMarcus]

They’ve maintained the first dividend but with a warning not to make assumptions on full year!

[monabri]

They’ve maintained the first dividend but with a warning not to make assumptions on full year!

"Whilst the first interim dividend has been maintained compared to the previous year, shareholders should not assume from this that the total dividend for the year as a whole will be similarly maintained."

I'd translate that to be "expect a dividend cut".

[ADrunkenMarcus]

They’ve maintained the first dividend but with a warning not to make assumptions on full year!

"Whilst the first interim dividend has been maintained compared to the previous year, shareholders should not assume from this that the total dividend for the year as a whole will be similarly maintained."

I'd translate that to be "expect a dividend cut".

No, I think the translation would be 'rebasing' the dividend.

They did hold Shell...

If they get a new manager in, perhaps they will welcome the flexibility to restructure the portfolio without worrying about maintaining the old dividend level.

Best wishes

Mark.

[mike]

They’ve maintained the first dividend but with a warning not to make assumptions on full year!

"Whilst the first interim dividend has been maintained compared to the previous year, shareholders should not assume from this that the total dividend for the year as a whole will be similarly maintained."

I'd translate that to be "expect a dividend cut".

No, I think the translation would be 'rebasing' the dividend.

They did hold Shell...

If they get a new manager in, perhaps they will welcome the flexibility to restructure the portfolio without worrying about maintaining the old dividend level.

Best wishes

Mark.

They have a 36-year record of being an AIC Dividend Hero. I wonder how much that will colour their thinking.

https://www.theaic.co.uk/aic/news/press-releases/rising-dividends-in-falling-markets

[Parky]

TMPL has now fallen over 50% from its recent high. I have given up trying to imagine what the real valuation could be for this and similar ITs, and am seriously considering topping up in a big way, solely on the "reasoning" that what has fallen the furthest must go up a long way eventually.

Current price 675p
Year high 1492p
Premium to NAV 2.5% (unreliable in these volatile conditions).
Average discount to NA last 12 months 3.5%
Yield 7.6%!
Portfolio. Many of the usual suspects for an income Trust. Overweight in Oils maybe.

Data from HL.

Any comments?

It was 6th May before I made up my mind and bought at 713p with a 10% discount to NAV.
It's now trading at 869p with a discount of 12% to NAV and still a yield of 5.9%.

An increase in share price of 22% on the price I paid in 1 month, and 29% in the 3 months since I first posted

Early days yet of course, but so far so good.

[ADrunkenMarcus]

They’ve asked for interested parties to contact them. Maybe I can bid to be the new manager?

Best wishes

Mark

[monabri]

They’ve asked for interested parties to contact them. Maybe I can bid to be the new manager?

Best wishes

Mark

I think it would be in safer hands than the previous incumbents but I reckon you'd have your work cut out!

[scotia]

They’ve asked for interested parties to contact them. Maybe I can bid to be the new manager?

Best wishes

Mark

I think it would be in safer hands than the previous incumbents but I reckon you'd have your work cut out!

It should be a dawdle to beat the performance of the previous incumbents. Use the blindfold and pin method to select a portfolio from a list of FTSE 100 companies. (5 year total return - FTSE100 tracker = +12.3%, TMPL = -13.2%). And if the selection doesn't create a sufficiently large dividend, keep a fraction in cash in a sock under the bed and dole it out as required. Also take an exorbitant fee for this strenuous task - and everybody will be happy.

[ADrunkenMarcus]

I suspect my idea of “value” would be different to the Board’s!

Best wishes

Mark

[Parky]

TMPL has now fallen over 50% from its recent high. I have given up trying to imagine what the real valuation could be for this and similar ITs, and am seriously considering topping up in a big way, solely on the "reasoning" that what has fallen the furthest must go up a long way eventually.

Current price 675p
Year high 1492p
Premium to NAV 2.5% (unreliable in these volatile conditions).
Average discount to NA last 12 months 3.5%
Yield 7.6%!
Portfolio. Many of the usual suspects for an income Trust. Overweight in Oils maybe.

Data from HL.

Any comments?

The share price of TMPL now seems to be testing £10. That is some going since my initial post on March 18th when it was £6.75. In fact I didn't top up, which I was considering, but luckily didn't sell either.

(Echoing Dod's post over on the Scottish Mortgage thread." The share price (of SMT) now seems to be testing £12. That is some going since my initial post on 12 May when it was £7.15.")

[ADrunkenMarcus]

I was alerted to an article on Temple Bar in the Sunday Mail - not a paper I normally read but FWIW. The new managers seem to be singing the trust's praises. Quelle surprise!

https://www.dailymail.co.uk/money/inves ... overy.html

Best wishes


Mark.

[Arborbridge]

I was alerted to an article on Temple Bar in the Sunday Mail - not a paper I normally read but FWIW. The new managers seem to be singing the trust's praises. Quelle surprise!

https://www.dailymail.co.uk/money/inves ... overy.html

Best wishes


Mark.

What the managers say is pretty their philosophy is pretty much what Alistair Mundy might have said:

The fund's overarching investment philosophy is now one of holding 'value' companies – businesses whose share price does not reflect their ability to generate earnings over the next few years.
'We often buy companies that are experiencing difficulties,' says Lance. 'Their earnings may have fallen and when that happens, the market invariably over-reacts by sharply marking down their share price. What we do is look ahead and assess where their earnings could be in five years' time. Often, that is a signal indicating a company's share price is seriously undervalued.'

So when it comes down to it, it becomes just a question of whether their judgement or luck is any bett than his. It's tough - if we are standing on the brink of a revival in "value". their eventual success could be just as much due to a rising tide as much as to skill, and due to the Directors impatience to be "doing something". In that case I'd feel some sympathy for Alistair: value investing is a long term and cruel business hardly suited to conventional fund management.

Here's hoping these two new managers know what they are doing, and I am at least pleased to see they are keeping a value approach - otherwise this IT would be no different from my others.

Arb.