Discussion in 'Listed Investment Companies (LIC) and Trusts (LIT)' started by austing, 17th Sep, 2016.
Curious how often SPPs (Share Purchase Plans) have come up historically with MIR?
I had a quick google and saw 2010 and 2015 as years they were offered, am I missing any?
The reason I ask is the premium to NTA has put me off purchasing MIR so far, however I am considering a small holding as the 2015 SPP offered a 10% discount, acquiring some shares at a premium to be able to add to the holding during SPPs seems attractive
Yes, SPP's have been fairly sparse with MIR. Small cap focused LICs tend to do better if they are not too large. The best time to raise capital is when the LIC is doing well, typically at a premium. There won't be the level of dilution to existing shareholders that can occur when capital is raised whilst a LIC is trading at a discount.
Discounted SPP's plan can also take the heat out of the premium. This occurred with MIR's SPP in 2015 in which I participated. Didn't last for long though.
And of course it makes sense to raise capital when there are good buying opportunities.
I have no way of knowing when MIR's future SPP will be offered. But given the very strong bull market in mid / small caps you would think it unwise for MIR to be raising more capital in the near future to buy these overpriced stocks. So I'm not counting on any SPPs anytime soon. But it's anyone's guess.
With LICs it pays to be patient. There is usually reversion to the mean. It's not worth paying a large premium for any LIC. The bull market in small / mid caps will end at some stage and the likes of MIR will become value again. In the meantime it might be worth taking advantage of where value currently is. The likes of ARG and MLT don't look too bad. I like to take a contrarian stance buying whatever is out of favour at a given time. And that certainly isn't mid / small caps at this time.
Thanks @austing I'll look to hold off on MIR then, good to hear your views on SPP cycles.
As a side note my ARG order was $ $7.11, looks like I missed the absolute bottom, now I'm wondering if I should change my entry.
I scraped in at $7.12 for a top up. Can't tell the future unfortunately. I sometimes split my orders to where I think one is highly likely to get filled and the other cheeky order at a lower price. Just need to make sure brokerage doesn't negate any benefit though.
Technically ARG appears to be is an established down trend perhaps due to recent underperformance so maybe $7.11 is a possibility. But no guarantees.
Just remember as long term investors don't get too concerned with upping the bid a few cents to get the order filled. ARG appears to be offering reasonable value at the moment. Any buying now is certainly offering better value compared to when ARG was at its recent highs and at a premium as well. That said there's nothing to say it won't go lower. This is just one purchase of many, many more over a lifetime. Regardless of what happens after you get your order filled it's just not worth fretting over subsequent price moves. It all averages out over the long term.
Link to fundamental analysis:
Listed Investment Companies - Fundamental Analysis
Listed Investment Companies - Fundamental Analysis (Introduction)
Premium on this stock has put me off as well. Such a shame it would round out my portfolio so nicely. Oh well!!!
Of course QVE appears to be closer to fair value which gives Ex-20 exposure (MIR Ex-50). But mid / small caps in general are frothy at this time.
I hold both MIR and QVE for added diversification.
WAX is another one but very high fees and also at a significant premium.
Would never consider WAX or any of its stable mates. Prefer traditional lower cost LICs. AMH will just have to do for the moment. Certainly seems mid/small caps are a little under represented in the LIC space (at least at a reasonable cost).
Would only consider WAX (although unlikely) at a significant discount to compensate for the huge fees. There's been a small / mid cap bull market for awhile now which is favourable for WAX. This won't always be the case.
Well done on AMH, it often slips under the radar. Probably one of the cheapest ways to get some of this exposure at the moment. Sort of like a cross between AFI and MIR in some ways. More growth focused than income so dividend may be more erratic.
Trying not to take this thread off track though. So any specific questions please post them in the relevant LIC thread. My fault also as I'm used to the PC site.
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