Jefferies has made a change to its rating for Ocean Wilsons Holdings Ltd (LON: OCN), downgrading the stock from Buy to Hold and adjusting the price target to £17.25 from the previous £19.00.
The firm's analyst cited a significant narrowing in the company's Net Asset Value (NAV) discount, which has decreased by 31 percentage points to 24% over the last twelve months (LTM), closer to the historical average of 34%. This shift followed the announcement of a strategic review in June 2023.
Ocean Wilsons' NAV discount narrowing is partly attributed to its ownership of Wilson Sons, which accounts for 63% of the company's NAV, with the remainder being cash and liquid investments.
The reassessment of the stock's rating reflects the agreed price for the PORT3 stake, which has prompted the new price target of 1,725 pence. This target represents a 15% discount to NAV, aligning with the average discount observed among UK investment companies.
The company has indicated plans to distribute a portion of the proceeds from the deal as special dividends to its shareholders. Additionally, Ocean Wilsons is exploring options to reinvest the remaining funds into its diversified portfolio business, Ocean Wilsons (Investments) Limited. This strategy is aimed at enhancing the company's investment profile and potentially providing long-term value for shareholders.
As Ocean Wilsons continues to navigate the post-strategic review landscape, the market will be observing how the planned special dividends and potential reinvestments will impact the company's financial health and stock performance.
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