Liontrust’s long-term relationships

Matt Tonge, Mike Appleby, Olly Russ, Carolyn Chan, Stephen Bailey & Samantha Gleave

Ahead of Valentine’s Day, our fund managers discuss the long-term relationships they’ve had with companies they invest in and why, even after years together, they still find them attractive.


Matt Tonge, Economic Advantage team

Valentines article Matt Tonge

 

Our relationship with Renishaw first blossomed over 20 years ago. The company designs, develops, manufactures and sells high technology precision measuring and calibration equipment, which aims to enhance efficiency in medical diagnostics, machine calibration and neurosurgery, among other sectors.

 

Renishaw has excellent levels of intellectual property (IP) – a result of decades of accumulated research and development. It has also built a global distribution network and this has helped cement the company’s strong customer relationships. IP and distribution strength are two of the three primary Economic Advantage intangible assets which we look for. In December 2018, the stock outgrew our classification of a small company and was sold from the Liontrust UK Smaller Companies Fund, but is still held in the Liontrust Special Situations and Liontrust UK Growth funds.

 

Mike Appleby, Sustainable Investment Equities team

Valentines article Mike Appleby 

 

Kingspan first set our hearts a-flutter over a decade ago and, over that period, the share price has swelled from a few cents to almost 40 euros. Kingspan is an Irish company with 85% of its sales now coming from energy efficiency products used in heating and cooling buildings. It makes insulated panels, environmental management systems and renewable energy solutions for businesses across the UK, mainland Europe and the Americas.

 

We think its ability to facilitate reduced emissions while also saving money is a structural tailwind that is underestimated by the market.

 

Olly Russ, European Income team

Valentines article Olly Russ


The Liontrust European Income funds have long been enamoured with Sampo Group, which Chairman Dr Björn Wahlroos has brilliantly steered from being a small Finnish insurer to one of the pre-eminent financial powerhouses of the Nordics, with controlling interests in fellow Nordic insurer Topdanmark and the Scandinavian bank Nordea.

 

If it sounds like we’re gushing, it’s because over the last 10 years, Sampo has returned over 300%, slightly more than half of which has been via dividends. It is forecast to generate a dividend yield of over 6% next year, more or less the same as it offered when I bought it over a decade ago. Even now the company looks very cheap for such a high-quality business that gives lessons in best practice to UK insurers.

 

Carolyn Chan, Asia team

Valentines article Carolyn Chan

 

The Liontrust Asia Income Fund found a real diamond in April 2014 – SITC. Since then, the stock has more than doubled, outperforming both the MSCI Asia Pacific ex-Japan Index and the MSCI Asia ex Japan Index. SITC is an Asia-focused integrated logistics company which provides high frequency shipping and Chinese land logistics services. It operates small sized fleet container vessels and is unique in its positioning, operating exclusively within Asia. We continue to believe that the company will be a key beneficiary of increasing regional trade as well as the gradual shift in manufacturing from China to lower-cost locations in Asia.

 

Stephen Bailey, Macro-Thematic team

Valentines article Stephen Bailey

 

Bloomsbury Publishing is a stock we’ve held since 2003. The independent publishing house rose to prominence during the Harry Potter boom, which was perhaps the reason why a lot of investors initially fell in love with it. Since the success of Potter, the company has transitioned to a balanced business with a shift to professional publications which provides a more reliable revenue source. We think this puts the company in an excellent position to continue its 23 year run of increasing its annual dividend.   

 

Samantha Gleave, Cashflow Solution team

Valentines article Samantha Gleave

 

Amadeus IT is a stock we’ve held in the Liontrust European Growth Fund for around five years. We love this cash generative company that we consider to sit within the growth space, with its core business focusing on providing airlines and airports with systems to connect them with their passengers. This includes products which help airlines respond to passenger issues following flight disruptions, such as rebooking journeys. The company’s solid balance sheet has helped it fund diversifying bolt-on acquisitions in recent years and it now services the wider tourism industry as well.

For a comprehensive list of common financial words and terms, see our glossary here.

 

Please remember that past performance is not a guide to future performance and the value of an investment and any income generated from it can fall as well as rise and is not guaranteed, therefore you may not get back the amount originally invested and potentially risk total loss of capital.

This Blog should not be construed as advice for investment in any product or security mentioned, an offer to buy or sell units/shares of Funds mentioned, or a solicitation to purchase securities in any company or investment product. Examples of stocks are provided for general information only to demonstrate our investment philosophy. It contains information and analysis that is believed to be accurate at the time of publication, but is subject to change without notice. Whilst care has been taken in compiling the content of this document, no representation or warranty, express or implied, is made by Liontrust as to its accuracy or completeness, including for external sources (which may have been used) which have not been verified. It should not be copied, faxed, reproduced, divulged or distributed, in whole or in part, without the express written consent of Liontrust.

Wednesday, February 13, 2019, 9:21 AM