Woodford Patient Capital Trust PLC (lon:wpct)
Woodford Patient Capital Trust – Is It Now A Buy?

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Woodford Patient Capital Trust PLC Share Price
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Title: Woodford Patient Capital Trust – Is It Now A Buy?
Company: WPCT - Woodford Patient Capital Trust PLC
Share Price Then: 39p
Author: Ian Smith
Date: Fri 25 Oct 2019
Comments: With a new manager, Schroders, is WCPT now a buy?

Fees are now known to be 1% a year on the first £600 million of assets and 0.8% on assets above this as well as a fee of 15% of any excess returns above a NAV per share of 77p.

So I suspect not.

Towards the end of October the NAV of the trust was just under 63p, so even at 40p there seems to be a big difference between share price and NAV which means that either the world is missing a bargain or the NAV is optimistic.

I’m betting on the optimistic NAV side.

Schroders have no skin in the current valuations and it seems inevitable that one of the first things that they will do is look at each investment and put their own valuation on it.

This could easily see massive write downs on NAV to levels a lot below the current share price.

There are so many valuations based on funds raised rather than revenue earned that I wouldn’t be surprised to see the valuation drop as low as 2p-10p per share.

Rutherford Cancer Centre (Proton Partners) looks like a very promising business and I can see the demand, seeing the revenue and profit though is harder.

Benevolent AI could possibly brilliant but again revenue, reported at a few million dollars against a valuation of $1bn

Autolus, any income at all?

Industrial Heat well…either Woodford saw something that nobody else is seeing even now or it seems that he got fooled! Muon-catalyzed fusion is real science but nobody seems to have an idea on now to make it a useful product, NASA has put some money into LENR but it was a tiny amount to them and why shouldn’t they?

It would be easy to be cautious and say that these four businesses are actually close to worthless to the early stage investors such as Woodford.

This then leaves the question of the loan, the £113m from Northern Trust, will Schroders sell assets to repay it or try and keep it open, incur interest and hope that this is offset by real growth or income from the investments?

So instead of the very low value I suggested above is WPCT actually worthless, will it just slowly eat up its own value paying fees and interest?
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