Star fund manager Nick Train has long been dissatisfied with the valuation discrepancies between UK and US listed companies.
And in the latest update to the £ 6.6bn Lindsell Train UK Equity Fund, he continues the same theme and three that he feels will trade much higher when listed on the US exchange. Identified the stock.
The three stocks are Experian, LSE, and RELX, and Train specifically emphasizes his view that old valuation methods do not work for new types of digital companies.
“It’s a question of whether these high US reputations are justified. But there’s one thing that’s clear. It’s a mistake to apply 20th-century measurements to digital companies, which make up” value. ” is. Their return on capital is structurally much higher than their analog / physical business, so P / E, which was considered excessive 20 years ago, can now be justified as “cheap”.
“What makes them even more interesting is that Experian, LSE, and RELX appear to be less valuable than their US counterparts. Currently, at least for company-specific reasons that haven’t yet achieved a NASDAQ-type rating. There are some, but their potential for undervaluation is as global investors are demanding to retain UK-listed companies compared to those cited in other markets around the world. We believe it could also be due to the protracted discounts we see. Simply put, if Experian, LSE, or RELX is a US company, we think they could be appreciated. “
Nick Train – Lindsell Train UK Equity Fund
Supporting his idea was the fact that UK companies have seen strong demand from US companies and private equity firms themselves, which have swept many UK assets in recent months.
The Lindsell Train UK Equity Fund has returned a double-digit percentage increase over the last four of the five years.
Please note the above for Boatman Capital …
Train’s comment on the valuation of digital companies and US-listed companies responded to a relatively unknown research firm called “Boatman Capital,” which claimed that Argo Blockchain was particularly “very high.” It reflects similar sentiment from Share Buyers today. Claims taken up by many British media today (Boatman Capital weakly tries to sink the Argo ship).
Attempting to apply traditional assessment techniques to companies with a focus on digital and technology will not work. Welcome to the modern age of investment!
Clearly: Three UK Equities That Nicktrain Thinks More Highly Valued in the U.S.
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