Cymbria Corp - Canadian Value CEF

[no_free_lunch]

I am throwing this in general discussion as it's a closed end fund as opposed to a specific stock.   The funds performance has been excellent and the holdings are very aligned with members on this site. Their top 10 holdings include dollar tree, berry global, auto canada, onex, and various other holdings you hear in value circles.  

 

You can have a look at their current portfolio at this link: https://cymbria.com/portfolio/

 

I have started a position and am just posting to get others thoughts.

Edited June 29, 2022 by no_free_lunch

[bizaro86]

Based on a cursory look this appears to be trading at a premium to NAV? 

 

Do you know how they mark edgepoint, and are you happy with their mark or do you think its more valuable?

[no_free_lunch]

It is trading today at a 4% premium.  Long term it has traded between -14 and +35 to NAV.  Ideally you wait to a bit closer to NAV.  I wouldn't count on a discount, however if it happens management may buy back shares.

 

They value edge-point using some independent firm, which whatever, but the valuation is reasonable.  It's currently valued at $245 million, and is paying around an 8% yield, $5m a quarter, based on past few years dividends.  It's currently at the same valuation from about 4 years ago so I don't feel they are aggressive on it.  It should be noted that Edgepoint has been a slam dunk, up something like 100 fold over the past 15 years.  

 

This is not a perfect investment by any means but it's a way for me to park a little capital and it will not follow the market perfectly, for better or worse.  To me it's a diversifier.

 

 

Edited July 2, 2022 by no_free_lunch

[Rod]

One problem is that they are a fully taxable corporation. I would much prefer if they were a mutual fund corporation and could distribute their tax liability. Then you add management fees on top of that. It's definitely a drag on performance.