Fund Manager Summary
The fund managers believe that the outlook for Solvar Ltd presents a unique opportunity despite current challenges. In their opinion, the company is experiencing strong underlying business performance, yet is hindered by regulatory scrutiny following allegations from the New Zealand Commerce Commission. This regulatory overhang is expected to limit multiple expansion in the near term, creating a cautious sentiment among investors. However, with Solvar trading at a FY24e fully-franked dividend yield of 9% and a 9x P/E ratio, the fund managers see potential for attractive returns as the situation stabilizes. Overall, they view the current share price of approximately $1.16 as an entry point for discerning investors willing to navigate the regulatory landscape.
Source: Trading View
Commentary From The Managers
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Endeavor Asset Management
31 May 2025
$1.68
Summary
- Endeavor Asset Management sold their investment in automotive financier Solvar (SVR) during the month.
- SVR contributed positively to portfolio performance in FY25, with a share price increase of 46%.
- Shareholders received 11 cents in dividends, yielding approximately 7% based on the May closing price.
- Proceeds from the sale were redeployed into other opportunities.
- This exit followed a long-term holding, with SVR experiencing an 80% rally from its low 12 months ago.
- After enduring a significant drawdown, Endeavor averaged down at $1.05/share and exited at $1.66.
- The exit occurred after the stock traded back to NTA in May.
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Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
Commentary From The Managers
Endeavor Asset Management
31 May 2025
$1.68
- Endeavor Asset Management sold their investment in automotive financier Solvar (SVR) during the month.
- SVR contributed positively to portfolio performance in FY25, with a share price increase of 46%.
- Shareholders received 11 cents in dividends, yielding approximately 7% based on the May closing price.
- Proceeds from the sale were redeployed into other opportunities.
- This exit followed a long-term holding, with SVR experiencing an 80% rally from its low 12 months ago.
- After enduring a significant drawdown, Endeavor averaged down at $1.05/share and exited at $1.66.
- The exit occurred after the stock traded back to NTA in May.
Summary
Endeavor Asset Management
31 Mar 2025
$1.44
- Endeavor Asset Management notes that shares in car financier Solvar (SVR) have remained stable despite market softness.
- The company has continued its on-market buyback program, which has positively impacted the share price.
- Solvar is currently trading at just 8x FY26e earnings.
- The stock offers a fully franked yield of 9.2%, indicating attractive pricing.
- Recent strength in the stock led Endeavor Asset Management to trim their position.
Summary
Thorney Investment Group
20 Feb 2025
$1.37
- Thorney continues to hold its investment in Solvar Limited (ASX:SVR) given the recovery in earnings in FY2024.
- SVR delivered earnings consistent with historical levels, leading to improved market sentiment.
- The positive share price performance in H1 FY2025 was supported by an active on-market share buyback.
- Despite recent gains, market caution persists regarding future earnings outlook.
- As the largest shareholder, TOP and associates intend to remain active in Board and management engagement to drive a value-adding strategy.
Summary
Endeavor Asset Management
31 Dec 2024
$1.49
- Endeavor Asset Management observes that Solvar (SVR) experienced an 8.8% share price increase in December.
- The rise is likely attributed to the company’s share buyback program.
- Endeavor Asset Management capitalized on this movement by locking in some profits.
- SVR is currently trading at a 9.5x FY25 P/E.
- The company is forecasted to provide an 8% dividend yield to shareholders.
Summary
Endeavor Asset Management
31 Aug 2024
$1.26
- Solvar Ltd (SVR) delivered positive full-year results that were well received by the market.
- Prior to the announcement, market sentiment was poor, with challenges anticipated in FY24.
- The outlook indicates signs of improvement, with better macroeconomic conditions expected.
- Loan book and profit growth is anticipated in FY25, signaling potential for recovery.
- Solvar is set to provide updates at their AGM in November.
- The current trading valuation is 8x FY25e P/E with a 9.6% dividend yield.
- Endeavor Asset Management continues to hold its position based on these developments.
Summary
Endeavor Asset Management
30 June 2024
$1.08
- Endeavor Asset Management notes a 20% rise in Solvar's stock price in June, indicative of positive market trends.
- Management's decision to ramp up share buy-backs suggests they see value in the current share price.
- Confidence in trading conditions has been strengthened for investors.
- Solvar continues to trade at a significant discount to its book value.
- The company offers an 11% fully-franked dividend yield for FY25e.
Summary
Endeavor Asset Management
31 Jan 2024
$1.16
- Endeavor Asset Management updates their investment thesis on Solvar Ltd.
- Solvar (SVR) is facing challenges due to weak sentiment linked to regulatory enquiries.
- The ASIC claim from last May has been compounded by allegations from the New Zealand Commerce Commission regarding breaches of the Credit Contracts and Consumer Finance Act.
- Solvar maintains it has complied with lender responsibility obligations, viewing the situation as frustrating.
- Despite challenges, the underlying business is performing well.
- The regulatory environment is likely to limit multiple expansion in the near term.
- SVR is currently trading at a FY24e fully-franked dividend yield of 9% and a 9x P/E ratio.
- Endeavor Asset Management continues to hold this position while awaiting further developments.
Summary
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
ANALYST INSIGHT
Equity Research Analyst
Regulatory clouds seem to linger over Solvar, casting a shadow on its potential. Yet, with a robust underlying business and an attractive yield of 9%, this might just be the calm before a storm of opportunity.
Last Updated: 31 May 2025
Query The Data
Frequently Asked Questions
Who is investing in Solvar Ltd (ASX:SVR)?
Fund managers including Endeavor Asset Management and Thorney Investment Group have invested in Solvar Ltd (ASX:SVR).
Why do fund managers invest in Solvar Ltd?
Fund managers are investing in Solvar Ltd due to its solid underlying business performance and attractive valuation metrics, including a projected FY24 fully-franked dividend yield of 9% and a P/E ratio of 9x. Despite facing regulatory challenges that have affected market sentiment, the company's compliance with lender responsibilities suggests resilience and potential for long-term growth.
What happened to Solvar Ltd (ASX:SVR)?
There have been no recent updates from fund managers regarding Solvar Ltd although fund managers including Endeavor Asset Management and Thorney Investment Group have previously commented.