Just a note to let you know that I added to my holdings in Sprott Resource Lending (SILU) by about 30% today. That won’t be a surprise, I imagine, since I’ve continued to say nice things about it as the shares have disappointed over the past year, and I listed it as one of my favorite past “Idea of the Month” picks in our annual review earlier this month. My personal average cost for these shares is now in the $1.60-$1.65 range, today’s purchase was around $1.50.
This is what I said about it a couple weeks ago:
“Now yielding 4%, and I would be surprised if the dividend hasn’t doubled a year from now. This is a lender to natural resources companies, cheaper now than when I covered them originally and a bit cheaper than my personal cost basis. I love the management and think they’ve done a good job monetizing their legacy real estate portfolio and bringing on new funding deals with miners and energy companies. They were hurt a bit by the fact that it’s taking longer than planned to get rid of their legacy assets (distressed real estate), and by the swoon of junior miners, but seem to me to be moving full steam ahead, with a resource loan portfolio of probably well over $120 million by the close of the last calendar year. The books can move quite a bit between quarters since they’re in a very active transition still, but right now they trade for a slight discount to book value (3rd quarter book value, at least), yield 4%, are growing, and have great industry connections to keep growing. I’m letting this one compound in my portfolio and may buy more if it remains at a discounted price.”
There’s no new news from the company just yet, their annual results should be out in a few weeks. Latest presentation from them is here, the shares could certainly come in from here but I like buying them at about 95% of book value as an add-on to my portfolio, getting a 4% yield that I expect to grow going forward as they deploy more of their cash (they still have about $50 million tied up in real estate at their valuation guesstimate, and more than $60 million in cash per their latest presentation). Should do well in a flat commodity market, with ...