Surprisingly, given the wide universe of megacaps available, Train’s concentrated portfolio includes two little AIM-listed companies. Even more surprising, one of them is a football club.

A flaky investment?

Train has been a long-term investor in Celtic (LSE: CCP), which released its annual results just after the market closed yesterday. The company reported a 74% rise in revenue to £91m and a jump in profit from £0.5m to £6.9m. With the shares currently trading at 131p, the business is valued at £123m and the P/E is 17.8 (or 24 on a fully diluted basis).

On the face of it, this looks expensive given Celtic’s bumper haul of domestic trophies last season and the fact that the results also reflect, as management admits, “the paramount importance to the company of participation in the group stages of the UEFA Champions League.” What about bad years? Isn’t a football club a flaky investment that’s sure to go wrong sooner or later?

Rare and valuable brands

Train has a fascinating take on the intrinsic value of Celtic, Juventus (held by his global fund), as well as New York-listed Manchester United, where he’s recently been “delighted” to pick up a block of shares from the owning Glazer family. He was previously a shareholder during its spell on the London Stock Exchange in the 1990s, making a return of 30 times his initial investment – the single best investment of his career, he’s said.

His take on these football clubs is that they’re among an elite with “deeply entrenched and storied franchises” that make them brands every bit as rare and valuable as, say, Diageo’s Johnnie Walker whisky. Train reckons that the exponential rise in the value of TV sporting rights is set to continue. He said recently: “It will not be long now before an internet giant bids against an incumbent football rights holder. The ramifications for traditional media companies will be massive, but through the turmoil we expect the value of strongly-franchised football clubs to rise.”

It’s an interesting view and I’m certainly reconsidering my aversion to the idea of investing in football clubs.

A rewarding pint

The other AIM-listed stock Train owns is pubs group Young & Co (LSE: YNGA). London-focused and the owner of many well-known hostelries, Train has every hope that the next quarter of a century will prove every bit as rewarding for shareholders as the last, telling the Telegraph a few years ago: “Its real estate is likely to offer protection against inflation while its focus on the capital means that shareholders get a ‘proxy’ participation in the growth and vitality of London.”

Again, this is not an obviously cheap stock on a P/E of 20.4 (at a share price of 1,357p), but the P/E comes down to a more reasonable 15.6 on Young’s non-voting shares (ticker YNGN) at 1,033p, which Train also holds.