| Oceans Wilsons - An Enigma? (Perhaps Still Is In 2020 - But Is It A Good Deep Value Play){2023?}

20th Dec '17 by Albertos

17 comments 6602 reads

EDIT 12 Mar 2023

This keeps on dragging me back - purchased a starter stake. Perhaps I’ll lose this time and be able to kick the habit.

As always, the attraction is the discount to quoted net assets.

Ocean Wilsons Holdings (LON:OCN) now holds 248.7m shares in Wilson Sons (57%) which are listed on the Brazilian stock exchange. The increase is due to a capital reorganization which appears to have helped liquidity in that market, the percentage held remaining the same and means Ocean Wilsons Holdings (LON:OCN) consolidates Wilson Sons results into their accounts.

At 10/3/23 these were worth R$ 2,562m or £408m - this is above the MV of Ocean Wilsons Holdings (LON:OCN) at £320m.

https://ri.wilsonsons.com.br/e...

There is also the listed investment portfolio of Ocean Wilsons Holdings (LON:OCN) last valued at $283m at 30/9/22 or £235m using the 10/3/23 exchange rate.

(There is some upside potential here as the Dow was 28,726 at 30/9/22 and 31,910 now, although their investment strategy is conservative and I would not expect them to capture all of that.)

So Ocean Wilsons Holdings (LON:OCN) has listed assets worth £643m compared to a MV of £320m a discount of 50%.

Wilsons Sons seem to be doing reasonably well with revenues and profit increasing.

http://newsfile.refinitiv.com/...

https://d3s3shtvds09gm.cloudfr...

As always there is the problem of low liquidity and the holdings of the Salomon family, but in the past the discount has, at times, reduced considerably.

As always, DYOR if this is of interest.

Phil

EDIT 10 Nov 2020

(Can't believe its three years since I wrote this.)

Not been invested here for some time but recently have taken a stake. Reason is a 50% discount to underlying quoted asset value.

Last time they reported (12/8/20) they had an investment portfolio of $267m at 30/6/20 - not far from the $270m noted below 3 years ago but the £OCN SP then was £10.77 as opposed to £6.57 now.

This leaves the intriguing proposition that:-

The investment portfolio is worth $267m = £202m (You could note that world stock markets have increased considerably since 30/6/20 )

They also own 58% of Wilson Sons which is quoted on the Brazil/Luxembourg stock markets:-

41.444m shares at R$44.3 (Brazilian Reals) which gives $341m or…

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rhomboid1

20th Dec '17

Hello Phil, I’ve held this a few times over the years and it’s looking like Value now , 2 issues detract, first the http://www.hansagrp.com/group-structure/hansa-capital-partners-llp/partners mgt of the investment portfolio has been pretty poor over the years, overly complex positioning producing poor results with high mgt fees. Secondly Wilson Bros is tied straight to the health of the Brazil economy, but on balance it looks good value at current levels

EDWARD FORT

42% of Wilson Sons is traded on the Bovespa and Luxembourg. Not 48% as suggested above.

Albertos

Hi

I essentially agree.

Analysis of the Brazilian economy is above my pay grade, but it did seem to be stabilizing compared with a few years back and I can think of worse places to do business in the coming year (UK? - only joking I hope).

On investment performance you're totally correct IMO. There is a slightly worrying relationship between Ocean Wilson and Hansa - and there is no doubt IMO that if you require @ two pages of A4 to list your investments you've taken diversification to an unnecessary extreme - especially, if I remember correctly, most of them are funds. However they do seem to be on track to get close to a 15% return this year.

Like you I think it is good value with these provisos - I'd probably err on the very good, but then I own some!

Cheers

Phil

Sorry, typo!

Phil

21st Dec '17

There is a bit of a liquidity problem with OCN.
Once you subtract the holdings of Hansa Trust, then the personal holdings of the Salomon family and the other director Townsend and other Institutional investors like UEM the free float isn't that big.
There's not much of a retail following, partly because the spread is usually last least 1%. sometimes more than that.
Small amounts of buying and selling can have a big impact on the share price.
It's good to see that the investment portfolio has risen a bit this year.

pka

An alternative way to buy an interest in Ocean Wilson Holdings is to buy shares in the Hansa Trust, which is an investment trust whose portfolio has a 31% weighting in Ocean Wilson Holdings. The share price of Hansa Trust is at a discount of about 23% to its Net Asset Value at present, according to Hargreaves Lansdowne:

http://www.hl.co.uk/shares/shares-search-results/h/hansa-trust-plc-ordinary-5p

I must admit I don't understand the relationship between Hansa Trust and Ocean Wilson Holdings.

The link is founding family http://www.hansatrust.com/about-us/board-of-directors.aspx
Specifically William Salamon ‘William has been a director of Hansa Trust plc since 1999 and, through his interests in a family trust as well as direct share ownership, has a significant, long standing, investment in the Company. William is a vocal proponent of the Company’s long term growth strategy.

William’s experience in investment banking and management is important to the Board in developing and monitoring investments in special investment themes and in the Company’s strategic investment in Wilson Sons.

William is the senior partner of Hansa Capital Partners LLP (the Portfolio Manager and Company Secretary), deputy chairman of Ocean Wilsons Holdings Limited and its listed subsidiary Wilson Sons Limited. He is also a shareholder representative on the Investment Advisory Committee for DV4 Limited. William was formerly the Vice Chairman of Close Asset Management Limited and Chairman of the Merchant Bank Rea Brothers. William was born in 1957 and is both a German and British citizen.’

pka - I agree that buying Hansa Trust is a very attractive way of getting exposure to OCN with a double discount - the 23% discount on HAN and then the 40%-odd discount to NAV in OCN itself.
But OCN is only about a third of Hansa's assets, from memory. So if you really believe in the OCN you have to go for OCN itself. Or even for Wilson Sons in Brazil (but I don't how you buy shares on the Brazilian market).

marben100

Hi Phil (or is it Edward?),

You won't get any contrary views from me. I've been a longstanding holder of OCN and have recently topped up, as trading updates are positive but the discount to NAV (which I monitor) has widened.

Bear points are: the political situation in Brazil, which is pretty dire, and the company also seems to have run into legal difficulties with its expansion programme for the Salvador container terminal: https://www.investegate.co.uk/ocean-wilsons-hldgs--ocn-/rns/tecon-salvador-update/201704120813392963C/

The accusation seems to be that the licence for expansion of the port was awarded automatically to Wilson Sons, without a proper competitive process.

I was disappointed not to read any update on that legal action in the trading update.

Best,
Mark B

4th Jan '18

Mark B - it's Phil

Looks like we've got a bit of momentum over the Xmas and a bit of a kicker from the NAPS selection for this undervalued share. Long may it last.

Thanks to all above for your input - most interesting/informative/useful.

I'm pretty confident that Emerging markets will star this year from a low but already rising base in 2017 - Brazil being one.

Phil

10th Nov '20

Updated for peoples interest.

LeopoldAlcocks

11th Nov '20

I can't quite pull the trigger on this one. Have been following for a couple of years, but ultimately I'm not convinced that Ocean Wilsons Holdings (LON:OCN) will be run for the benefit of smaller retail shareholders. Hope it works out for you. I'll watch from the sidelines in case something changes

Quite agree with your sentiment - not entirely convinced myself.

Time will tell ....... the Q3 results hopefully will be OK tonight .... but who knows.

25th Nov '20

Has worked out quite well so far.

Current share price is virtually 100% covered by the port stock shares - which leaves the investment portfolio for free..

But. to be honest, not sure where it will go from here. Looks like it should have £10 in it as the port continues to recover but the family control is a continuing worry, Equally at some point in time they will want to get out.

But currently a 7% dividend seems highly likely after the year-end results so waiting should be more than compensated for.

DYOR - Regards Phil

27th Mar '21

Well the party here is over.

Sold out a couple of days ago - did well from my original purchases. The discount has narrowed from the 50%+ to just over 30%.

I would normally consider a 30% discount here marginal, but the main sale driver was CV19 - numbers coming out of Brazil are awful and the central leadership there still appears to consider it a minor problem - staggering.

Never know - I could be back.

12th Mar '23

Updated in case its of interest to anyone.

Results for the year will be out on 24/3/23.

Latest operational data:-

https://api.mziq.com/mzfileman...

Oceans Wilsons - An enigma? (Perhaps still is in 2020 - but is it a good deep value play){2023?}

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Albertos

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