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Platinum Capital Limited (PMC)

Discussion in 'Listed Investment Companies (LIC) and Trusts (LIT)' started by austing, 17th Sep, 2016.

  1. austing

    austing Well-Known Member

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  2. austing

    austing Well-Known Member

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    Ah yes that's correct. See pages 3 & 4 of their 2015 Annual Report about their dividend policy:

    http://www.asx.com.au/asxpdf/20150910/pdf/43173hywl8lftp.pdf

    Change in accounting policy should help smooth dividends unless things really go pear shaped. But this can only carry them so far. One would hope that the environment for value investing soon improves. That said I'm a long term holder of PMC and will remain so.
     
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  3. bingomaster

    bingomaster Active Member

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    I think things should improve for them. But even so, things haven't been "bad" per se. The return was basically flat for a year, yet the LIC is down more than 20%. When you take into account the large dividends that have been paid out, it changes it slightly, but still a large drop.

    This is down largely to the premium coming out of the stock. Which, for me, is exactly why I've been interested (albeit far too early, it would seem). PMC has traded around around a 20% premium up until recently, and from some of the reports you've posted, it's long term average is around 10% premium. It's currently at around a 4-5% discount, so 15% cheaper than average. Once again, I just wish I wasn't so early and had some more cash left to invest...
     
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  4. austing

    austing Well-Known Member

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    I did a small top up at $1.44 last week from memory and have cash set aside for further opportunity. Last major purchases were around $1.00 - $1.20 quite some time ago. If you have faith in the mgr over the "long term" which I do PMC is starting to look more attractive at these levels. Would love to see it in the $1.20's but probably unlikely. A decent correction in the US might get us there.

    FGG has been trending down a bit also, 1.04 vs IPO @ $1.10. Investors getting impatient waiting for the dividend to build. 1 cent inaugural dividend and no interim dividend next period. Still think it could do ok eventually. Great Mgrs without their usual huge fees, just the 1% charity donation. Certainly for those wanting mgr diversification this does it in a big way.

    Oops Better keep any further discussion in the FGG thread.
     
    Last edited: 20th Sep, 2016
  5. El Caballo

    El Caballo Member

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    @austing

    Great information as always. Any concerns regarding the reduced dividend?
     
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  6. austing

    austing Well-Known Member

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    Nope. I accept this sort of thing with International LICs. PMC is better than most with their dividend. Refer to above posts / quotes and annual report about dividend policy. They're doing everything possible to smooth dividends as best they can in the future. And note that PMC has gone from a very large premium to a discount now. So perhaps those getting in at current prices or even better less than this might be rewarded in the future if / when the mgr returns to form! One hopes this will be the case. I'm prepared to give them the benefit of the doubt. But each needs to make their own decision.
     
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  7. El Caballo

    El Caballo Member

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    Nice!!

    Is there "manager risk"? If Kerr left, would you sell?
     
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  8. austing

    austing Well-Known Member

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    It's been going long enough now to have established processes in place. So I don't think key person risk is as high nowadays. If he left there would probably be a short term impact in price but I think that it would be ok. So I doubt I would sell because most of my PMC buying has been when it was very cheap. This is why I like to be patient and buy these high fee externally managed LICs in particular at a discount when on the nose. It gives one a little margin of safety. Those paying a 20% premium for the likes of WAM, PMC etc at certain times aren't doing themselves any favours.
     
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  9. Anne

    Anne Member

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    Looking at the Patersons research report @austing shared, PMC and WHF seem to be worth buying at the current price.
     
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  10. I_Luv_Chips

    I_Luv_Chips Member

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    May I kindly ask what is the difference between PTM and PMC?
    If I buy PTM or PMC, what am I actually buying? Am i buying LIC or an investment product (fund)?

    To kick start my understanding, I found this on the Platinum website:
    PTM -> Platinum Asset Management Limited is the holding company of Platinum Investment Management Limited (which trades as Platinum Asset Management), a Sydney-based fund manager which specialises in investing in global equities. Platinum Asset Management Limited is listed on the Australian Securities Exchange. The ASX code is PTM.

    PMC
    -> Platinum Capital Limited is a closed end investment company listed on the Australian Securities Exchange. The distinguishing feature of the company, compared with the unit trust products, is that it is taxed at source and distributes a dividend (usually fully-franked) rather than a unit trust distribution.
     
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  11. bingomaster

    bingomaster Active Member

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    PMC is the listed investment company. PTM is the funds management business itself. Very different. In theory if the funds perform well, they get more performance fees, more money should flow into the business, and PTM should also perform well.

    But to me, they're very, very different.
     
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  12. twisted strategies

    twisted strategies Well-Known Member

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    PMC is a LIC International Focussed


    PMC utilises a bottom-up, stock selection methodology and is focused on absolute returns over returns relative to any index. Investments may be in global equities (including Australia), perceived by the Manager as being inappropriately valued by the market.
    This is combined with screening software that allows the Company to select stocks for further evaluation based on a specific criteria.
    The Criteria is determined by the Manager’s hypothesis regarding social, political or economic change. These factors are intended to bring together a portfolio of stocks with a below average risk


    Top 10 Holdings % as at 30-Jun-16
    Samsung Electronics 4.0
    Tencent Holdings 3.1
    Sanofi SA 2.7
    Alphabet 2.6
    Eni SpA 2.5
    AstraZeneca 2.3
    Inpex Corporation 2.1
    Cisco Systems 2.1
    Ericsson LM-B 2.1
    Paypal Holdings 2.0
    % of Total
    25.5

    cheers !!
     
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  13. bingomaster

    bingomaster Active Member

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    Just on PMC (the subject of this thread anyway), I must say it's got to be one of the most volatile LICs out there. Today, its traded between 1.475 and 1.58. Does anyone else think that's ridiculous?

    Im glad I was buying it quite heavily under 1.50.
     
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  14. twisted strategies

    twisted strategies Well-Known Member

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    i haven't reseached this one (PMC ) currently

    if as volitale as you say is it being used as a de-facto ETF ( of say) Samsung ??
     
  15. bingomaster

    bingomaster Active Member

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    If people are trading it as a de-facto ETF for Samsung, people are very, very silly.

    Seriously, Samsung is 4.4% of it's portfolio. More than 95% of it has nothing to do with it.

    i'm not saying it's not possible that people are doing this. Plenty of people doing sillier things in the stock market, I'm sure.

    But you might as well make it an ETF of something interesting, while you're at it - gold, oranges, cow dung. It'd be more fun. And the correlation to the portfolio of PMC would probably be about the same...
     
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  16. twisted strategies

    twisted strategies Well-Known Member

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    Samsung was an example, it might be the Asian area , of 'ASIA v. € '

    i suspect NCM has been used as a proxy GOLD. PMgold ETF at times

    older folk hint ARG was used as an XJO ETF , before ETFs gained traction .

    and silly , even in reasonably large numbers is possible ( aka 'the herd ' ).

    'absolute returns ' on a LIC that focuses internationally will make more careful , but it is possible i will grab some if i spot a good S P
     
  17. bingomaster

    bingomaster Active Member

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    Yes, I understand how LICs get used as proxy ETFs - but in those cases, such as ARG and XJO, the correlation is very, very high. I'd say 90% the same. My point was in PMC, Samsung is only a small portion.

    Even using the global MSCI index won't be a particularly good guide, as their portfolio is very different to it. But a better starting point, I guess.

    And know that I wasn't having a crack at you or anything, just pointing out that the correlation there is very small and it would just be baseless speculation.

    Definitely agree with the herd having the potential to be silly!
     
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  18. twisted strategies

    twisted strategies Well-Known Member

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    i agree on your points but the SP volatility suggests some motive at play by either man or 'bot .

    after reading how Japaness bond traders trade in US Treasury bonds where the yield is mostly $US v Yen differential , who knows what angles are being exploited for ( small ) gains .

    OR somebody has worked out a nice regular earner ( we haven't thought of )
     
  19. austing

    austing Well-Known Member

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    Here we go again @bingomaster. PMC up and down like a yoyo. I wouldn't call it rediculous though, more opportunistic:).
     
  20. bingomaster

    bingomaster Active Member

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    It really moves around a lot doesn't it!
     
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