He paid 13.75p per share, but you can buy for 12.25p.
City super-investor Neil Woodford, who manages more than £20bn within two Invesco Perpetual funds, is renowned for his love of big defensive blue chips, such as British American Tobacco (LSE: BATS), GlaxoSmithKline (LSE: GSK) and Vodafone (LSE: VOD).
But unlike many other mainstream managers, he does like a bit of a dabble in small caps. In the lower reaches of his Income and High Income portfolios, you'll find a number of little growth companies that you'd think really have no place in an equity income strategy.
I've given you the low-down on a couple of these companies in the past -- companies that you could buy at a lower price than Mr Woodford paid, and that I thought might be worth a punt. I've got another one for you today.
...you'll probably want to know how the first two Woodford wagers are doing.
The first opportunity I told you about was Proximagen (LSE: PRX), a little biopharmaceuticals firm, whose shares were trading at 87p but which Mr Woodford had bought at 140p. Today, the shares are 180p -- a gain of 29% for Mr Woodford, but a 107% appreciation from 87p.
The second opportunity I told you about was Juridica (LSE: JIL), an investment company that funds arbitration and litigation claims in the US. Juridica's shares were trading at 94p, which was 20p cheaper than Mr Woodford had paid. This one hasn't done the business (so far): the shares are 76p today, but there's been a special dividend of 7p, so running at about 12% down.
Sustainability and universities
A couple of themes struck me when digging down into the smaller holdings of the latest published portfolios of Invesco's Income and High Income funds.
There's a bit of a 'green and clean' theme going on, with exposure to Blackrock New Energy (LSE: BRNE), Ecofin Water & Power Opportunities (LSE: ECWO) -- both investment trusts that hold many companies -- and Leaf Clean Energy (LSE: LEAF), an investment company with a more aggressive portfolio of fewer than 10 holdings.
Then there's Trading Emissions (LSE: TRE), an investor in carbon credits currently doing an orderly realisation of its assets, MaxWest Environmental Systems, a US waste-to-energy group, and Waterlogic (LSE: WTL), a quite interesting-looking AIM-traded firm that manufactures and distributes point-of-use drinking water purification and dispensing systems.
The other theme that struck me was Mr Woodford's taste for university spin-out companies. He has a holding in IP Group (LSE: IPO), an investment company that provides capital and resources for the commercialisation of intellectual property, primarily through its partnerships with twelve research-intensive UK universities.
He's also bought into Imperial Innovations (LSE: IVO), an Imperial College London spin-out, as well as into another university spin-out -- Tissue Regenix Group (LSE: TRX) -- which is the company he paid 13.75p per share for, but which you can buy today at 12.25p.
Pigs may fly
Tissue Regenix is a York-based biotechnology company, which was spun-out of Leeds University and floated on AIM in 2010.
Tissue Regenix's technology takes pieces of pig, strips them of cells and DNA, leaving a scaffold or matrix for the regrowth of human tissue with no adverse immune-system response. The process has already been used to patch up veins in surgery and the company's first product, dCELL vascular patch, will be followed by a second product, dCELL meniscus, for repairing knee joints.
Although currently loss-making, Tissue Regenix's technology is potentially very disruptive to big players in the medical devices market. The company ran a placing of 182 million shares at 13.75p per share last December, raising £25m, and effectively avoiding having to sacrifice equity to a multinational.
Invesco took the vast majority of the placing shares, 97 million of which sat in Neil Woodford's High Income fund at 31 December. By 10 January, Invesco's stake in Tissue Regenix had increased from 26.2% to 28.6%, the additional purchase having been made when the shares were trading in the market at above 14p.
A sale of Tissue Regenix further down the line to one of the major players in the industry looks the likely route to realising shareholder value. The company's directors have the right CVs: executive chairman John Samuel was a partner in private-equity firm Apax Partners, while the non-execs include Alan Aubrey, who heads the aforementioned university spin-outs facilitator IP Group.
If pigs make Tissue Regenix's shares fly, they'll fly higher from the current price of 12.25p than from the 13.75p-plus Neil Woodford paid!
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