- Caledonia Investments has recently reported encouraging results
- It looks mispriced
- A substantial portion of its shares are held by one family which makes share buybacks difficult
It’s never easy to spot the best pockets of value in the stock market, and particularly difficult at the moment following a strong run for global stock markets since 23 March last year. But sticking with some general principles should stand investors in good stead: diversify, have a long-term outlook and don’t worry too much about short-term fluctuations.
That said, when an investment trust trades at a discounts to its net asset value (NAV), it can be a great opportunity to pick up a bargain if the discount is significantly wider than its long-term average.