John,
Good points.
increasing institutional ownership from the current 15% for LDP is the key to price appreciation for LDP. insidertrader.com;
Obviously, one soon event likely to increase institutional ownership is inclusion in the FTSE 250, expected in September. Also, if things hold, this quarter's earnings are going to be at least in the >$4.00 range again, and remember the company's comments about raising visibility.
IMO, the individual investor could view the current low institutional ownership as a positive for the stock price. Remember, the common is traded on the LSE and they just started filing quarterly financial reports in the U.S. this year. Consequently, most of the financial data on the company reported by many major services was wrong and outdated. That is slowly getting rectified, and this company can actually begin to show up on some radar.
...to shake the current "mutual fund valuation model" *1 times market value of public investments*
One could treat the public portfolio as a "holding company." Even so, shouldn't the >$150 million in private equity have a multiple, and the financial services have a multiple. In fact, shouldn't the VC arm itself have some reasonable "enterprise value."
And if you accept the "holding company" view, just when is it that you buy? Last year, such an investor might have reasoned, "I’m not buying this company because it is currently trading at or above the value of the public holdings."
....when the price was $6.00 (split-adjusted).
So, now at $18-$19, (and trading at approx. 1x its interest in public equity) what does the same investor say?
Still too expensive?
This is a simplified argument, but the point is that the "holding company" investor might never get an opportunity to buy this stock based on that criteria, and might not ever buy it. I guess this is the drawback of ignoring that the company overall is GROWING from year to year, and, on average, the returns on private equity are significant.
Also consider that in better market conditions, with better sentiment, the company has traded well above the value of its public holdings. In other words, on this basis, right now, one could propose that it could get a lot less relatively cheap than it is now.
Just my two cents. |
