“I suspect that the above opinion was gained from looking at linear share price charts… as an investor the important thing is percentage change over a period… The 10 year trend for NXT is 25.0% pa. Going further back, charting SP with a log price scale back to Jan 1996 gives a trend line of 12.8% pa…”
Yes, Rhigos, a fair challenge - I was really just musing aloud. But the thing is, all of that is backward-looking - the world is changing rapidly for NXT, and they no longer enjoy the relative advantages they once did. I suspect past SP performance really is no guide to future… etc, with this one, and it’s now harder than ever to know what was the truer and fairer reflection of intrinsic value… £80, £37 or somewhere in between.
As I’ve surmised before, the valuation metrics can certainly support £50 or so, but maybe not a whole lot more on top.
"I am not generally a fan of share buy-backs but NXT management do it well and I like the capital gain it brings better than special dividends. They do not buy-back if they consider SP above fair value for company. "
I AM generally a fan of buy-backs - wherever conditions are conducive - but I know that opinions are mixed here, particularly among private investors (not that I think buy-backs are at all well understood in this community). But I would commute your statement to “NXT management DID it well, UP TO A POINT…”
Yes, Wolfson’s policy is (or at least was) transparent and disciplined, certainly compared to many, but it still means they were buying-back quite a lot of shares at a substantial premium to the current SP in the relatively recent past. Okay, perhaps they have the excuse of being overtaken by unpredictable external events - but this cannot excuse the decision to replace buy-backs with specials, right at the bottom, a major misstep by Wolfson IMHO (and I said as much at the time, on these pages). Maybe this move to switch it back to buy-backs will come to be seen as a timely correction… or maybe the wrong way around, once again? Either way, Wolfson’s reputation as Master Capital Allocator has taken a knock, and still to recover…