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Nick Train: I don’t regret not taking Unilever profits
by James Phillipps on Oct 14, 2013 at 10:05
Since reaching that peak of almost £29 in May, Unilever’s stock has dropped by nearly a fifth to less than £24 amid concerns about slowing growth in its key emerging markets and the weakness of local currencies.
Train has high weightings to Unilever in all three of his funds – the open-ended Lindsell Train UK Equity fund, and closed-end Finsbury Growth & Income and Lindsell Train trusts– worth around £100 million in total.
‘If we had sold in late May as some investors were encouraging us to do, we would have indeed saved a temporary price loss of 20%,’ Train acknowledged.
‘But, we ask ourselves, how would we have known before the event that £29 was to be the short-term peak? Would we have been able to redeploy those proceeds any better? Very few other businesses possess Unilever’s unique characteristics and we could easily have found ourselves trading down in quality. How much would it have cost to redeploy the proceeds?’ Train said.
‘We have no confidence in answering any of these questions with any certainty, except the last. The investment approach we follow steers us to staying put, claiming some more dividends, avoiding the costs of trading and patiently awaiting the build-up in value that, at present rates, should result in Unilever trading once again at £29 or higher.’
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by Danielle Levy on Dec 04, 2013 at 11:37