Peter Walls, manager of Unicorn Mastertrust
“At the time of flotation back in 1994, 3i Group’s promoters were keen to stress that the company should be valued not as an investment trust but like a bank.”
“Judging by the share price, which is down by around 75 per cent since May 2007, I guess you could say that their wish came true! To add insult to injury the shares are on the brink of losing their place on the FTSE 100 index.”
“Now trading at a discount to net asset value which looks to be north of 30 per cent, a reversal in fortune may well be in prospect.”
3i is an international investment company, focusing on private equity, infrastructure and debt management.
According to FE data, the company appears in the top ten holdings of eight funds in the IMA unit trust and OEIC universe, including BlackRock UK Absolute Alpha and JOHCM UK Dynamic.
The £835m Witan Investment Trust also holds 3i in its top ten.
Graham Spooner, investment adviser at The Share Centre
“Mothercare has fallen around 30 per cent since our initial recommendation, but we still thinks it’s a decent contrarian play. We didn’t get in anyway near the bottom, but if/when the UK economy picks up, we think the expansion of its overseas market could bode very well for the share price.”
“However, we would recommend investors drip feed into company for the time being.”
Two funds – Aberdeen UK Mid Cap and Aberdeen UK Smaller Companies – hold Mothercare in their top ten.
“Man Group has been out of favour for a couple of years now, and just recently its had a poor trading update. However, things may be looking up. In the past it’s concentrated on just one fund, but it’s purposely broadened its range.”“It needs markets to improve, but for high risk investors now might be a good time to buy. It’s also got a good yield at the moment.”
BlackRock UK Income is one of four funds that hold Man Group in its top ten. Nick McLeod-Clarke’s vehicle has a 3.4 per cent weighting to the company.
“This one is a little more controversial, but Barclays is one that comes to mind. There are a lot of headwinds in place, but drip feeding into the company on a three to five year view could be a decent bet.”
“It’s not one that we are recommending investors to buy, but it’s on our watch list. I think it would be wise to wait and see what happens with the proposed banking regulations and the lawsuit with the US government.”
“However, it’s in much better shape than Lloyds and RBS. It’s independent, and the investment side of the company [Barclay’s Wealth] is a big part of its business.”
Barclays appears in the top ten holdings of 41 open-ended funds and two investment trusts. It is FE Alpha Manager Ian McVeigh’s Jupiter UK Growth fund’s fifth biggest position.
Chris Hutchinson, manager of Unicorn Outstanding British Companies
“With annual turnover of approximately £200m and a growing order book, Renold is experiencing a reversal in fortunes, which is not yet reflected in its current stock market valuation of £67m.”
“The market is forecasting adjusted operating profits of at least £14m in the financial year to 31 March 2012, which puts the business on an price-to-earnings multiple of just over six times.”
Renold is a global manufacturer of industrial chains and power transmission products. The company has manufacturing operations in countries worldwide, including China and India and sells its products into market sectors such as mining, construction, manufacturing and mass transit.