Interactive Investor

Nick Train buys new holding that’s 'done nothing for five years'

Star investor Nick Train has bought his third new holding since 2020. Kyle Caldwell has the details.

23rd November 2023 11:45

Kyle Caldwell from interactive investor

Star investor Nick Train has been building a new position in Rightmove (LSE:RMV), which is the third new holding in his UK strategies since 2020. 

Train, who seldom trades, teased to interactive investor in a recent video interview that he had been building a position, but at the time could not reveal the name of the company. 

The stock he has bought was revealed by Citywire, a specialist financial publication. The stock is a small position in the WS Lindsell Train UK Equity fund and Finsbury Growth & Income (LSE:FGT) investment trust. 

In our interview Train indicated that he initiated the position towards the end of September to take advantage of Rightmove’s share price being flat over the past five years. 

He said: “We're currently actioning a new idea for the UK strategy. We initiated it about three weeks ago (interview took place in mid-October). It's a company that we first seriously looked at about eight years ago. We've monitored it ever since. Maybe it would have been better if we bought it eight years ago, but it definitely wouldn't have been better if we bought it five years ago. It's done nothing for about five years. The stars aligned and this seemed like an interesting time for us to initiate a new holding.” 

In mid-October Rightmove’s share price slumped, falling as much as 17% in a single trading session, following US-based CoStar’s proposed acquisition of number three player OnTheMarket. This raised fears of a threat to Rightmove’s market dominance. Earlier this month Rightmove’s share price hit a one-year low of 463p, but have been staging a recovery since then to reach 505p at the time of writing. Over five years the share price is up 16.4%. 

Train is not alone in recently snapping up shares in Rightmove, with Keith Ashworth-Lord, fund manager of CFP SDL UK Buffettology, also buying in. Ashworth-Lord said fears of Rightmove losing its market dominance are “overdone”. He explained: “We think this fear is overdone since the barriers are high because of the existing network effects. Also, other international companies attempting to enter the UK portal market have failed in the past.”

In our recent wide-ranging interview with Train, the UK investor notes that there’s a tendency for some UK companies to over-prioritise dividends. He says this is one of the reasons why the performance of the UK stock market has disappointed over the past couple of years. For some holdings in his portfolios he has questioned senior executives on dividend policy, which has led to some firms slowing the rate of dividend growth.

In the second part of our interview, Train names the one share he expects to hold forever, runs through why he is confident the consumer stocks he owns will weather a potential recession in 2024, and explains that while he has no plans to hang up his boots anytime soon there is succession planning in place.

Lindsell Train UK Equity is one of ii’s Super 60 investment ideas

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