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20 November 2020
By Maynard Paton
I am always looking for ‘multi-baggers’ — investments that can double, triple, quadruple or more.
And here’s some very good news: I have stumbled on a company that can find them for me.
Not just the occasional five-bagger or ten-bagger mind, but 20-baggers.
It’s incredible stuff, especially as the track record of success extends for many years and the gains are typically realised within twelve months.
The company behind these multi-baggers is Manolete Partners, which I discovered by employing a very straightforward SharePad screen.
Read my full Manolete Partners article for SharePad.
Maynard Paton
Manolete Partners (MANO)
Reversal of valuation on realised cases.
A reader has enquired about the ‘reversal of valuation on realised cases’ and whether this entry means MANO is not conservative with its fair-value adjustments. Note 8 of the latest interims contains the entry in question:
I interpret ‘reversal of valuation on realised cases’ to reflect MANO’s practice of reversing unrealised gains into realised gains when a case completes.
Some relevant snippets from the 2020 annual report:
After funding a case, MANO recognises any fair-value movement on that case as unrealised revenue.
When the case completes, the fair-value movement relating to that case is reversed from unrealised revenue and then the gain is reported as realised revenue.
As the FD’s commentary says in the annual report, unrealised revenue in one year typically becomes realised revenue in the next. Companies can’t book the same gain twice, so the original unrealised gain is reversed and then re-booked as realised.
What I can’t determine from MANO’s figures is whether the fair-value accounting is accurate, or whether the eventual gains vary significantly from the fair-value estimates supplied by the directors. I don’t believe MANO gives the information to make such a conclusion.
Maynard
Manolete Partners (MANO)
MANO issued a profit warning during January 2021 and further discussion can be found on Quidisq.
Maynard