Leading investor Geoff Wilson has sold some of his WAM Research Limited (ASX: WAX) shares according to an ASX released announced to the market today.
WAM Research has been one of the best-performing listed investment companies (LICs) over the past five years and indeed since the GFC.
Over the past seven years its portfolio has returned 19.3% per annum before fees and expenses. It has also increased its dividend every year since the GFC and it currently offers a grossed-up dividend yield of 8%.
It has been a very strong performer and that has created a lot of interest with investors focused on a large growing dividend. WAM Research is trading at a 28% premium to its August 2018 pre-tax NTA of $1.32.
As investors we should be trying to buy shares at a discount, perhaps selling when something becomes materially overpriced.
I think all the WAM LICs are worthy of trading at a small premium to NTA due to the investment team's ability to outperform over the medium-term and long-term.
However, the current WAM Research premium is huge and I can understand why Geoff Wilson decided to sell 68,637 shares yesterday for $116,763.47. But, it must be said this was only a small part of his trust's remaining 4.77 million shares.
Geoff Wilson puts his money where his mouth is – he has regularly bought shares of WAM Leaders Ltd (ASX: WLE) and WAM Global Limited (ASX: WGB) because he thought they were good value. His move of selling WAM Research shares is also a good indicator of what he likely thinks of its valuation.
Geoff Wilson has re-invested the WAM Research sale money into WAM Global shares.
Foolish takeaway
I won't be selling my WAM Research shares, but I can understand if people want to take some profits off the table or be a little active in buying and selling WAM Research shares throughout the year as it grows in premium before the dividend is paid and then falls back again.
