Lowland Investment Co PLC Edison issues review on Lowland Investment Co.
02 November 2021 - 3:45AM
RNS Non-Regulatory
TIDMLWI
Lowland Investment Co PLC
01 November 2021
London, UK, 1 November 2021
Edison issues review on Lowland Investment Company (LWI)
Lowland Investment Company (LWI) co-manager James Henderson
argues that the current environment of higher inflation and
interest rate expectations and supply squeezes should favour
industrial stocks that have pricing power and direct access to
their end-markets. The trust currently has an industrials weighting
roughly twice that of the UK large-cap index, underlining its
credentials as an all-cap investor with a bias to value over
all-out growth. Henderson and co-manager Laura Foll have turned in
a good year of performance for the trust's FY21 (ended 30
September), with NAV and share price total returns in excess of
50%, well ahead of UK large-cap, mid-cap and high-yield equity
indices. Despite this, and LWI's near-5% dividend yield, the trust
currently trades at a discount to NAV of c 8%, wider than both
short- and longer-term averages.
At 28 October 2021, LWI's shares traded at a 7.7% discount to
cum-income NAV. This is appreciably wider than the one-, three-,
five- and 10-year average discounts of 5.9%, 6.1%, 6.1% and 4.1%,
respectively. While in part this does reflect a general widening of
investment company discounts amid increased market volatility, only
two of the 17 largest trusts in the AIC's UK Equity Income sector
traded at a wider discount in late October. This is despite LWI's
4.6% dividend yield being among the highest in the group, backed up
by a significant post-COVID income recovery and representing a
solid real yield versus the CPI inflation forecast at 4%.
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