How should I value a publicly traded trust fund?


Hello GuruFocus,

As the title suggests, I am interested in buying the Mesabi Trust, a company which owns royalties to iron mines. I am interested as to how I would value a trust fund. Should I value it the same way I would value common or preferred stock?

Likewise, I am already aware about tax forms and such that come with investing in trust funds.

Praveen Chawla GuruFocus PremiumPlus Icon May 22, 2022

I don't know anything about this company but here are some general suggestions:

Usually, these sorts of firms have a finite life - for example if the trust owns royalty to a mine - those mines are declining - so eventually they will run out as the ore is depleted. Eventually the royalties will go to zero as well as your investment. You must figure out how long they can keep paying.

Some trust keeps on buying new mines so keeps on replenishing the royalty pool.