• ABOUT
  • CONTACT
  • DISCLAIMER!!!

Wexboy

~ A Value Investing Blog

Wexboy

Monthly Archives: August 2014

NTR plc…Wind of Change?

24 Sunday Aug 2014

Posted by Wexboy in Uncategorized

≈ 19 Comments

Tags

activist investors, Alan Walsh, grey market share, National Toll Roads, Nick Furlong, NTR plc, One Fifty One plc, Pageant Holdings, Rosheen McGuckian, Tom Roche, Wind Capital Group, wind energy, Yieldcos

NTR is a strange beast, neither fish nor fowl. Of course, regular readers will recognise that tends to intrigue me – the best opportunities often arise from misunderstanding & neglect. And NTR’s balance sheet intrigues me even more… But whoa Nellie, we’re getting ahead of ourselves here! Let’s back up:

We should begin with the Roche family dynasty – here’s a good potted history. Tom Roche Senior founded National Toll Roads – its first venture, the East-Link toll bridge, opened in 1984. The company slowly expanded, completing the West-Link bridge in 1990 & adding a second span in 2003. With the advent of the Celtic Tiger in the late ’90s & the completion of the M50, traffic volumes & revenues exploded, and the company became a goldmine. The government, in its wisdom, then decided to buy the West-Link in mid-2007 – just ahead of the credit crisis! NTR subsequently monetised the NRA’s index-linked payments of EUR 50 million pa (from Aug-2008 to Mar-2020) for an up-front consideration of EUR 0.5 billion. This was a great deal (followed shortly thereafter by an even larger sale of its Airtricity stake), but unfortunately the company was also in full Celtic Tiger mode at this point. With Tom Roche Junior taking the helm after his father passed away in 1999, NTR had ambitiously transformed itself into a developer & operator in renewable energy (solar, wind & corn-based ethanol) and sustainable waste management – in Ireland, the UK & across the US.

By Mar-2007, in just 3 years, the balance sheet more than quintupled to EUR 2.0 billion (funded by 1.5 billion of total liabilities)! Accompanied by a share price which managed much the same feat – I specifically recall the brokers hailing NTR as a new Irish blue chip to every last punter with a pulse & a wallet. [When I mention the company’s listing ‘status’, you’ll realise this pitch was even more dangerous than it sounds…] But investors eventually started getting cold feet – the shares peaked at EUR 7.00 in Jan-2007, well ahead of the crisis. Because of the West-Link & Airtricity sales, the company was sitting on a large cash pile as it entered 2008 – but it was also burning close to EUR 0.7 billion pa of free cash flow at the time. And despite the financial crisis, the spending never stopped… In Apr-2008, management actually embarked on a brand new investment folly (solar energy) with an initial USD 100 million deal to purchase a controlling interest in Stirling Energy Systems. Well, you know what came next…

I’ll spare you most of the blood & guts, let me just highlight total equity (exc. NCI) bottomed this year at EUR 117 million, down nearly 90% from a Mar-2008 peak of EUR 1.1 billion. [NTR’s real annus horribilis came in FY-2011, with a loss of EUR 381 million – one of the largest non-banking losses in Irish corporate history]. And the share price suffered even more horribly – reaching a EUR 0.25 low in Aug-2012, down 96% from its peak:

NTR Decline

Continue reading →

Advertisement

Mea Culpa (II)…

18 Monday Aug 2014

Posted by Wexboy in Uncategorized

≈ 1 Comment

Tags

blogging, diversification, fear and greed, Margin of Safety, portfolio allocation, size effect, value investing, Warren Buffett

Continued from here.

vii) ‘Sorry, I don’t have any sure-fire winners’

Do I feel confident about my portfolio? Yes, I do…

But with an important caveat:  I feel long-term confident. I’d even dare to say I expect to out-perform my benchmark indices. [Well, another caveat: That’s really not my objective – I’m more focused on absolute returns & generally improving my risk-reward ratio].

But do I feel confident about my individual stock picks? No, not necessarily…

Unfortunately, this is a reality we all face as investors. No matter how diligent your research, no matter how rigorous your quantitative & qualitative analysis – all too often, individual stocks feel just like a roll of the dice. Most obviously, the insidious effects of fear & greed are to blame – but no matter how hard you stamp these out, you’re still subject to the tender mercies of Lady Luck. And there’s no escaping her. [Though it helps if she looks like this…] As any good boxer will tell you:  If you box, you will get hit… The sooner you resign  yourself to rolling with the punches, the better – but don’t forget, the best boxer (usually) wins in the end.

And over time, investing skill & experience will inevitably beat luck, while diversification is also your ultimate secret weapon. Sure, I confirm my portfolio allocation for each stock I write-up – and that’s a great indicator of my confidence level – but the real lesson I preach is diversification, not concentration. Imposing relatively mechanical limits within your portfolio (see Well, Are You The Right Size?) is a great way to remove emotion from the equation. [Over the years, I’ve homed in on 3-7.5% as an optimal allocation for a single stock, in a portfolio of 15-20 (core) holdings]. As any smart investor will tell you, they’re usually confounded by their portfolio winners & losers in any one performance period. And trying to predict (or buy) just a few top picks is a fool’s game. So, no matter how confident you are, you still need to spread your bets…

viii) ‘I’m sorry it’s a micro-cap, and you hate the price & spread’

Well, really, I’m not…

Continue reading →

Mea Culpa…

06 Wednesday Aug 2014

Posted by Wexboy in Uncategorized

≈ 1 Comment

Tags

alternative assets, blogging, developed markets, diversification, emerging markets, frontier markets, growth investing, portfolio allocation, technical analysis, value investing

Surely about time I address this post to readers – the majority of these mea culpas are genuine apologies, the rest are probably just a little cranky:

i) ‘Sorry I didn’t get to your email/comment sooner…’

I like to think I’m fairly good at keeping up with your emails & comments – well, most of the time! As I’m sure you know, if you neglect to answer an email immediately, it’s all too easy to lose track of it. There’s also a daily mountain of spam I have to traverse – at this rate, I should be ditching the investing lark, ‘cos apparently I could be making an easy million squid a day instead… [I must applaud the sheer persistence & inventiveness of the Nigerian people – so definitely an economy worth considering! Guaranty Trust Bank (GRTB:LI), anyone?] But hopefully I get to (almost) every email in the end, even if it takes a week or three – if I don’t respond in a timely manner, just ping me again.

Unfortunately, I tend to suffer from a ridiculously compulsive version of ‘If you don’t do it well, why bother doing it at all?!’ So emails invariably seem to demand a specific & in-depth reply – um, which I often have to get ’round to completing… Might be a good idea to keep track of some of my recurring reader dialogue(s), and summarize/respond to them more systematically here instead – we’ll see, perhaps it might offer up a couple of interesting insights for readers.

But please, keep ’em coming, they’re much appreciated. Investing’s ultimately a pretty solitary activity, so ‘work’ socializing tends to be a more deliberate affair – emails/comments are a great opportunity each day to just hang out at the ‘water-cooler’ & shoot the breeze with fellow investors!

ii) ‘Sorry, yeah…actually, I did see that headline’

There’s obviously blogs out there providing excellent daily/weekly updates of the latest & most relevant news, weekly reading links, company & valuation updates, plus other interesting snippets & topics. Clearly, this blog isn’t one of them…

I’m definitely grateful for & awed by their industrious contribution, but personally I’m more than happy to rely on the fact you’re all reading & analyzing the same headlines as me! 😉 And from my perspective, individual headlines usually only add very incrementally to the mosaic of knowledge I already have about the markets, sectors & stocks I’m interested in. And in my defence, I also fall back on my Twitter account – I’ve somehow managed to accumulate an horrific 8,000+ tweets at this point, so surely there’s some interesting & contemporary tweets among them!?

iii) ‘Sorry I poured cold water on your favourite stock’

Continue reading →

Enter email address to track this blog by email.

Join 2,326 other subscribers

Wexboy on Twitter:

  • NEW Blog Post: FY-2022 Portfolio Performance & Review… $REC.L $KR1.AQ $GOOGL $VOF.L $TFG.AS $DQ7A.IR $SAGCV.HE… twitter.com/i/web/status/1… 1 hour ago
  • NEW BLOG POST: FY-2022 Portfolio Performance & Review… …Post-Pandemic Hangover: wexboy.wordpress.com/2023/01/31/202… $REC.L… twitter.com/i/web/status/1… 10 hours ago
  • Nah, you’re crying… 🥹 …the Light Balance Kids from #Ukraine win a Golden Buzzer: m.youtube.com/watch?v=lpLfyR… 18 hours ago
  • If credit card co’s/fees disappeared overnight, all the bars, cafes, restaurants & stores wd immediately drop their… twitter.com/i/web/status/1… 18 hours ago
Follow @Wexboy_Value

Wexboy Top Posts

  • 2022...Post-Pandemic Hangover
  • KR1 plc...The #Crypto #Alpha Bet
  • 2021...Wow, Another Crazy (Good) Year!
  • NTR plc - Breezin' Right Along...
  • A Letter to the CEO (& Board) of European Islamic Investment Bank

Wexboy Archives

  • January 2023
  • January 2022
  • November 2021
  • July 2021
  • January 2021
  • November 2020
  • July 2020
  • January 2020
  • December 2019
  • July 2019
  • January 2019
  • July 2018
  • May 2018
  • February 2018
  • January 2018
  • September 2017
  • August 2017
  • July 2017
  • May 2017
  • April 2017
  • March 2017
  • February 2017
  • January 2017
  • December 2016
  • November 2016
  • October 2016
  • August 2016
  • July 2016
  • June 2016
  • May 2016
  • April 2016
  • March 2016
  • February 2016
  • January 2016
  • December 2015
  • November 2015
  • October 2015
  • September 2015
  • August 2015
  • July 2015
  • June 2015
  • May 2015
  • April 2015
  • March 2015
  • February 2015
  • January 2015
  • December 2014
  • November 2014
  • October 2014
  • September 2014
  • August 2014
  • July 2014
  • June 2014
  • May 2014
  • April 2014
  • March 2014
  • February 2014
  • January 2014
  • December 2013
  • November 2013
  • October 2013
  • September 2013
  • August 2013
  • July 2013
  • June 2013
  • May 2013
  • April 2013
  • March 2013
  • February 2013
  • January 2013
  • December 2012
  • November 2012
  • October 2012
  • September 2012
  • August 2012
  • July 2012
  • June 2012
  • May 2012
  • April 2012
  • March 2012
  • February 2012
  • January 2012
  • December 2011
  • November 2011

Wexboy Categories

  • Uncategorized

Blogroll

  • Above Average Odds Investing
  • Alpha Vulture
  • CantEatValue
  • Cheapskate Investor
  • csinvesting
  • Deep Value Investments
  • Element Value Investor
  • Expecting Value
  • Harriman Intelligence
  • Insider Monkey
  • Interactive Investor Blog
  • Investor Soiree
  • Long Term Value Blog
  • Mallet's Conspiracy
  • Mark Carter
  • Oddball Stocks
  • Philip O'Sullivan's Market Musings
  • Ragnar is a Pirate
  • Reminiscences of a Stockblogger
  • ShareProphets
  • Simple Value Investing
  • The UK Stock Market Almanac
  • Tom Winnifrith
  • UK Value Investor
  • Value Investing France
  • Value Investing Journey
  • Value Uncovered
  • valueandopportunity
  • valuestockinquisition
  • ValueWalk
  • Valuhunteruk

Meta

  • Register
  • Log in
  • Entries feed
  • Comments feed
  • WordPress.com

Blog at WordPress.com.

Privacy & Cookies: This site uses cookies. By continuing to use this website, you agree to their use.
To find out more, including how to control cookies, see here: Cookie Policy
  • Follow Following
    • Wexboy
    • Join 2,326 other followers
    • Already have a WordPress.com account? Log in now.
    • Wexboy
    • Customize
    • Follow Following
    • Sign up
    • Log in
    • Report this content
    • View site in Reader
    • Manage subscriptions
    • Collapse this bar
 

Loading Comments...