Why is the Bluefield Solar Income Fund so far under NAV?
It's been a good first half for the Bluefield Solar Income Fund - a situation that doesn’t seem to be replicated by its share price.
The fund continues to benefit from its strategy of fixing prices 3 years in advance which has enabled it to grow its revenue to £91.6 million, up from £78.6 million in the same period last year. The dividend guidance, against the current share price, gives a yield of around 8.5%. The fund advisors have also set aside £20 million as a share buyback.
James Armstrong is managing partner at Bluefield Partners and is the investment adviser of Bluefield Solar Income Fund. IGTV had a opportunity to ask him about the underperformance of the share price against net asset value (NAV).
(AI Video Summary)
Bluefield Solar Income Fund share price lower despite strong H1
The Bluefield Solar Income Fund had a successful first half of the year, with revenue increasing to £91.6 million from £78.6 million. Despite these positive results, the company's share price is lower than what it should be according to its net asset value. The managing partner, James Armstrong, believes that the company's strong performance should be reflected in the share price. He is confident in the company's strategy of fixing prices in advance and its ability to generate cash, even after accounting for debt and levies.
How are they addressing this?
There was a temporary disruption at one of the company's plants, but Armstrong says it did not have a significant impact on the share price drop. He also mentions that the wider renewable energy sector has also been facing discounts to net asset value. To address this, the company has started a share buyback program and partnered with the GLIL pension fund to sell certain assets and manage the development pipeline.
Armstrong highlights that the company has received planning approval for solar and battery projects, which will contribute to its future growth. It also has the option to sell these assets to third parties if the market remains closed. Despite all of this, Armstrong believes that the company's share price should be closer to its net asset value rather than at a discount. He points to a recent solar transaction that supported the company's net asset value, showing that the current share price is lower than it should be.
In simpler terms
In conclusion, the Bluefields Solar Income Fund had a strong first half of the year, but its share price does not reflect the company's performance. It has taken steps to address this by initiating a share buyback program and forming a strategic partnership. The company also has a solid pipeline of projects and a strong business foundation. Armstrong believes that the company's share price should be higher, offering a greater return for shareholders.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Act on share opportunities today
Go long or short on thousands of international stocks with spread bets and CFDs.
- Get full exposure for a comparatively small deposit
- Trade on spreads from just 0.1%
- Get greater order book visibility with direct market access
See opportunity on a stock?
Try a risk-free trade in your demo account, and see whether you’re on to something.
- Log in to your demo
- Take your position
- See whether your hunch pays off
See opportunity on a stock?
Don’t miss your chance – upgrade to a live account to take advantage.
- Trade a huge range of popular stocks
- Analyse and deal seamlessly on fast, intuitive charts
- See and react to breaking news in-platform
See opportunity on a stock?
Don’t miss your chance. Log in to take advantage while conditions prevail.
Live prices on most popular markets
- Equities
- Indices
- Forex
- Commodities
Prices above are subject to our website terms and agreements. Prices are indicative only. All share prices are delayed by at least 15 minutes.
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
