Does anybody follow Jlen Environmental Assets Group (JLEN). I’ve been doing my regular market research and review and came across its chart. Its been in a steady decline largely driven by an increasing discount on NAV which is currently about 30%. I just wondered whether anybody knew anything about it.
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I’ve looked at JLEN in the past but never pulled the trigger, thankfully. It’s a bit of a one-stop shop: you get exposure to solar, wind, waste management etc: compared with narrower trusts like UKW.
That diversification might be what’s dragged it down. I think it has exposure to energe storage and trusts in this area, such as GSF, which have less predictable revenues, have been hit hard. Other broad trusts like ORIT and TRIG seem to have held up better.
I hadn’t realised the discount had widened so much, -30%'s got to offer a relative margin of safety. But I’d want to interrogate the reasons for the discount further. There could be a continuation vote on the cards and this sector’s ripe for consolidation.
I’ve just never been convinced by clean energy infrastructure as a long-term investment. There’s some tempting yields on offer but I’d rather be in environmental equities.
Could I tempt you with UKW - it all depends on what you are looking to invest for, but to me for anyone in the UK its a good income earner with some capital protection to boot.
It’s had over 2x dividend cover since launch, has inflation protection baked into some of its power contracts, and reinvests excess income to generate more. Now due to the discount it is buying back its own shares. I would prefer it weighed up the discount to buying further assets and getting rid of debt, but I’m sure they know what they are doing.
The annual dividends are now said to be 10 pence, so on a price of 138.3 is a yield of 7.2%. If/when the base rate reduces to encourage growth, we should see its discount to NAV narrow further.
Anyhow back to JLEN:
https://www.theaic.co.uk/companydata/jlen-environmental-assets-group
It has a forward looking yield of 8.8%, and is trading at a 29% discount to NAV, whereas it was trading at a premium last September. Its dividend cover is 1.5x, and 1.1x in the prior year.
To be honest, I’m struggling to unpick its revenue stream - how did their income increase almost 2x year on year, and is that sustainable? That said, they have provided a 7.9% return since launch and the recent discount could be seen as a good entry point for a long term investor. Their gearing is almost at the max, and with the discount are unlikely to be able to raise external funds so they need to focus on maximising their existing holding returns.
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Nice rise from JLEN. I did buy so have sold half to cash-in some profit