Yes, 8.4cps increase in NAV in a week is remarkable. Won't be many times in the past that has been the case! Goes ex dividend on 8 September.
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Yes, 8.4cps increase in NAV in a week is remarkable. Won't be many times in the past that has been the case! Goes ex dividend on 8 September.
Maybe next weeks NAV jumps to all time high of 1.92 ...at that time SP of KFL was 2.13 !!!
MFT + FPH can help reach there soon
3.52 cents dividend also very attractive at the moment ...maybe it will help it reach 2.10 by 8th Sept .
KFL has an interesting strategy for the computation of dividend, paying 2% of NAV each quarter regardless of whether a rising or falling market/NAV. You are right the current quarterly dividend (yet to be paid, but cum div if you buy on or before 7 September ) is 3.52cps. I believe the highest quarterly dividend ever paid in the past has been 3.60cps, and the last reported NAV would support an even higher payout than that in the next quarter, if maintained.
It is sort of self-adjusting, because paying the dividend itself reduces the then current NAV.
Looks like major resistance at 2.10 and with divvy being paid I'd say she takes a breather from here.
Normally it doesn't loose full value after going ex ...so 208 tomorrow is actually 2.115 todays
New warrants issue out. KFLWG.
12 the Nov Ex date ....2.03 minus expected 14 cents divvy = 1.89 likely exercise price on 18th Nov 2022 ...
Overall its a very attractive offer and should have keen interest
Used to be rich pickings, (I got a bit fat on a size of some of the feeds) when these warrants within the overall Kingfish group started trading but sadly these days it seems people are far more aggressive with growth assumptions and if the most recent Marlin warrant listing is anything to yardstick against these warrants will start trading well above their intrinsic value.
I will run my dog food sniffer nose over them looking for a feed a little closer to listing date but I am not going to hold my breath.
Shares currently trading circa 10% above NTA and very easy to replicate their modestly diversified portfolio so that's pretty boring too.
Good part about these warrants is that they will get allotted on 23rd Nov 2022 and they are immediately eligible for Dec qtr dividend ...that will make them 3.6 Cents dearer as u are going to get almost 3.6 cents dividend back in 30 days time ...so the timing is great for warrant holders unlike last time when they had to wait almost 105 days before getting 1st divvy .
KFL coming closer to going ex warrants next wednesday as record date is 12th Nov .
Thats pulling the SP up ...
Maybe before going ex KFL will make new high of 215 ....Depends upon what market thinks is warrants worth...Surely worth 15 cents or more ?
Has anyone else noticed that KFL is not currently quoted by NZX as CE ( cum entitlement ) or CW ( cum Warrants, although there seems to be no letter W allocated for Warrants ) and presumably won't be quoted XE or XW after the record date but before allotment, either. The same situation apparently applies for all Warrant issues and strikes me as a flaw in NZX process/procedure which could be a trap for the unwary.
Last 3 days to buy KFL cum warrants ...Warrants listing expectations are about 15 cents IMO
I can see how you got to 15 cents easily enough and concur that around there is their theoretical value based on where the shares are currently priced. No issues so far. The real question though is will Kingfish shares continue to trade at a 10-11% premium to NTA all the way through to November 2022 ?
I can understand a premium to NTA for the better diversified Barramundi and Marlin portfolio's especially when their performance above the benchmark in the medium term has been superior and investment in these effectively deals with all the FIF drama's of direct overseas investment but for a bunch of NZX shares that are easily replicated without foreign exchange or FIF drama's is such a premium justified and far more importantly is the premium expected to be enduring ?
I'm not convinced so to me the real value of the warrants is considerably less than their theoretical value.
Another issue I have with KFL is their top 5 holdings makes up 66% of their portfolio as per 3/11/2021 weekly NTA update. Poor diversification or smart investing ?, you folks be the judge.
Today KFL have released a Quotation Notice to NZX recording that 79.1m Warrants will be allotted on Monday 15 November under ticker KFLWG, I believe tradable from Tuesday 16th.
Not sure that addresses my criticism last Sunday ( see above ) re the basis KFL have been quoted on NZX since 18 October when the warrant issue was initially announced, but may be now the KFL ticker will be shown as CE until the record date on Friday?
Certainly the Quotation Notice could have been issued weeks ago, but perhaps that isn't how it is customarily done.
As I said, the situation is indicative of a flaw in NZX processes/procedures and is not consistent with how other share entitlements are treated.
Poor housekeeping I agree.
The premium is something I am not comfortable with. This has only happened since deposit interest rates dropped to below 1%
If interest rates come back up to 4%-5% I feel a lot of the premium will disappear.
Historically all of the Fisher Funds (KFL, BRM, MLN) shares traded at a DISCOUNT to NAV. With interest rates starting to creep up most other dividend stocks have dropped in price but KFL is still at a crazy premium to NAV. I can't see this being sustained if we get back to 4% in the bank. Of course, I could be wrong!
Date 18/12/2019
KFL NAV $1.6265
Share price close $1.59
Discount 2%
Date 11/12/2019
KFL NAV $1.6137
Share price close $1.57
Discount 3%
Date 6/11/2019
KFL NAV $1.5235
Share price close $1.50
Discount 2%
Date 31/10/2019
KFL NAV $1.5240
Share price close $1.49
Discount 2%
Warren Buffet would say smart investing. I like the fact that KFL have the strength of their convictions and an ability to pick winners
Premium to NAV for all Fisher funds is based more on interests rates too low and no other options to invest for regular income returns ...they are not too much dependent on what market perceives as better alternative so justifying 25% for MLN and BRM while not for KFL will be futile ...agree may not be same but will be there as usual . Market never gave KFL similar premiums like MLN and BRM but what it gave 10-12% will also stay as long as BRM and MLN premiums stay as all are related to 2% quarterly tax free returns .
IMHO keeping in view the marked underperformance of NZX to world markets ....KFL has better chance of doing well in 2022 then MLN and to some extent BRM
So my expectations of KFL warrant being worth 15 cents is justified as expecting KFL SP to be around 210-218 in next Nov and offer is around 188-89 ...thus leaving warrant price as 25-30 cents in Nov 2022
That's my key concern too. The fact of the matter is the units have only traded at a premium to NAV when interest rates are at 100 year lows.
Already we are seeing Bank's offering 3% term deposit rates (e.g. Westpac 5 year term deposit) which is dramatically higher than what was on offer 6 months ago.
he inflation data out last month was an absolute shocker at 4.9% and it seems certain that interest rates are headed materially higher from here over the year ahead. The discounts you provided are very modest. At times they have traded in the teens, I recall up to 15% discount to NTA at one point and may have been higher going way back.
Buying KFL warrants on the assumption that the premium to NAV will remain where it is today feels like skating on very thin ice to me.
The discount to NAV calculation is confusing because KFL backs out the value of warrants so I picked dates where that wasn’t a factor. When warrants are on offer the discount is significantly greater - in the 10-15% range. Which is again why I am nervous about buying KFL at this time.
You only need to look at SPK which was bought as a dividend stock and has dropped heavily with only a modest increase in interest rates. SPK is looking like a buy right now if you are after dividend yields
Then that will go true for BRM as well MLN...they are the ones which trade at higher premiums . Also they dont have the luxury of having a sluggish year behind them like KLF does .
Also keeping in view the marked increase in worldwide debts of all including NZ ...I am pretty sure rates are not and cannot go much higher ...this cycle top will be 2.5% OCR max and that too in next 2-3 years .
Covid has devasted economies and people's finances ...
Regular income options will remain in demand and on premium for some time to come .
Let the time decide the final outcome .
PS : Added attraction of all these funds is PIE tax structure of max 28% ....most lucrative for HNI on 39% new bracket
This thread was started in December 2015, and here we are today, 6 years later, having exactly the same discussion. Which is interesting, to say the least.
Yes, after I posted I expressed my point of view via email to NZX, NZSA and key personnel at Kingfish including the Chair. Within 24 hours KFL had issued the Quotation Notice announcement for the warrants to NZX. I believe that action may have then triggered the attribution of CB ( not sure why one would use that - Cum Bonus - to describe the situation but may be the best of limited choice )to the listing, which acts as an alert. More important will be the use ( presumably ) of XB after the record date, although in this instance allotment follows promptly thereafter.
Well done for making some noise about this.
KFLWG will be tradeable tomorrow ( may be from 11.00am? ). I wonder what price the ticker will open at? My guess 6c. Perhaps a preponderance of sellers initially given 79m on issue and the head shares are quite a bit ahead of NTA at the current $2.03?
First sale of the Warrants at 6.8c, and buyers are now at 7.1c. I guess on-market transactions will not really pick up until folk receive their holder statements after allotment yesterday and are more likely to enter the market on the sell side. Considering the warrant issue was on a 1 : 4 basis it is like a supplementary tax paid dividend of almost 2c per share if you sell right away - makes the effective yield on the head shares look pretty good!
Ok, now large orders at 7.5c. If you said 14c after tax div between now and then means you are buying at 1.89+.075 makes todays purchase $1.965. KFL NTA is $1.84. In a rising interest rate environment would you be wise to buy, hold or sell? Is trading above NTA a long term thing or an anomaly?
1.25 Mil warrants buyers @ 10 cents ...seems like as anticipated its range will be 10-15 cents ...people taking a call on next years markets especially NZX which underperformed in a big way all 2021 .
Maybe this assessment ...market liked more ...day one closing 13.5 Cents ...maybe 15 Cents possible ...but almost here . Warrants are a great long term Call options on NZX ...so has both time value and offer value attached .
Have seen market is valuing them pretty highly right at start ...same trend continues ...
But as mentioned here ...soon supply can come ...after all 79 Mil issued FOC :cool:
I haven't had an allocation email from Computershare yet. Should I have?
I called it but the price still surprises me. The real issue is not the value of the call option per se but the assumption that KFL will continue to trade at a 10-11% premium to NTA when their portfolio is so easy to replicate.
In addition there's the little known fact that I really only quite recently got on too that you can buy ostensibly the same portfolio through their unit trust at no premium to NTA. This also seems to apply to Barramundi and Marlin, see Australian and International Growth fund and go and have a look at the quarterly reports and compare shareholding disclosure of unit trusts with listed vehicles, they look pretty much identical to me ! https://fisherfunds.co.nz/investment...nd-growth-fund
From what I can see these unit trusts ostensibly replicate the shareholdings of the listed companies Kingfish, Barramundi and Marlin.
If you like the 2% PIE distributions each quarter its easy enough to withdraw 2% of your unit trust each quarter and mirror what the listed funds are doing.
Further, for those with $500K or more, you can set this thing up with their private wealth team and design whatever portfolio suits you and tailor a dividend withdrawal program monthly or quarterly, whatever you like e.g. 0.75% per month = 9% per annum.
So coming back to the premium to NTA question, why would you pay 10-25% premiums for the listed vehicles when the unlisted unit trusts holding the same investments trade at NTA ?
Yes Beagle you're right to point out the parallel unit trusts being available for purchase or sale at NTA. I prefer the listed alternatives as they allow an investor to buy or sell at times where be the market is not in tune with the NTA..discount or premium events. This can improve returns vs being locked to NTA.
Yep but I haven't seen the unit trust offering warrants...
Its not as easy if u look at it from Tax angle especially for buy and forget type people and for people on 39% rate ...Simplicity and finality of listed PIE tax dividends is unparalleled . Main reason many in it for the long hauls ...they dont care about the premiums or discounts as regular income perpetually is their only goal .
Same as u said about people choosing to sell their homes and move to retirement villages ...
Yes that's a key attraction of the listed funds but there's no such thing as a free lunch and the warrant issue is of course dilutionary to shareholders NTA when the warrants are exercised.
Warrants can be a cheap call option when they're priced right, I will certainly concede that and have been a very lucrative hunting ground for this dog in the past when they have been mispriced but there days it seems there's a lot more players.
Yes alokdhir...up to a 15% premium to NTA the listed funds give ~ 7% net return to investors, (8 / 115), which is pretty much unbeatable on the NZX.
I can't get my head around these premiums though, especially for Marlin so I've been talking with the private wealth team about setting up my own program..
Used to be a minimum of $300K, now $500K with effect from 30/9/2021. The ability to custom tailor a monthly dividend while I am semi retired now, probably 0.5% per month and step it up when fully retired to probably 0.75% per month is very attractive.
Anyway here's the Barramundi fund sheet https://fisherfunds.co.nz/assets/fun...und-Update.pdf Not quite as much disclosure as the quarterly ones for Barramundi but the shareholdings for those disclosed look the same to me.
I think the dog forgets what day it is sometimes when he wakes up 😉
LOL Lockdown does that to you
Just don't over think it too much...you know you like them 😉
I like them but definitely don't like the premium to NTA. Can invest in the managed funds, (which are also a PIE), create one's own dividend program, and still get into the listed warrants as a call option on various index's whenever they're attractively priced...there's more than one way to skin a cat :D
Give me the listed markets any day.
Entry and exit at a price point of my choosing. This old Tom will sit patiently in the shade for some opportunity to come buy. None of this doe-eyed food bowl stuff.
I'll dine when I'm hungry..😋
Warrants have come to exactly expected level on day 2 ...15 Cents and rising ...
What is the right value to get rid of them ?
I did note that the first parcel sold on market yesterday was just over 82000 warrants at 6.8c - less than $6k to acquire the whole lot and worth over twice that on-market today!
Half Year Financials ( to 30 Sept ) out today for KFL together with the quarterly dividend announcement - 3.67cps with record date 3 Dec and payment date Friday 17 Dec. The dividend is calculated at 2% of NTA and is the highest ever paid historically.
Interestingly, NTA as at 30 Sept balance date is stated to have been $1.89 per share, before allowing for management's performance fee entitlement for the period of just over $2m. The last weekly update NTA released to the market is calculated on 17 November and is $1.8233 per share. The allotment of Warrants doesn't impact NTA per share ( thou the ultimate exercise of them in November 2022 certainly will ) but should ( and seems to have ) resulted in a small dip in the actual share price post issue given the warrants have some value and prior to the announcement holders had an expectation that a further issue of Warrants was reasonably imminent.
At the market close today of $2.00 for KFL the head shares are still trading at a significant premium to NTA notwithstanding the warrant issue, and the market seems to be still weakening. I wonder if the current premium will reduce once we are past the ex dividend date.
Actually the March div was the highest paid at 3.71cps
https://www.nzx.com/instruments/KFL/dividends
DIVIDEND REINVESTMENT PLAN PRICE DETERMINED
10/12/2021, 9:35 amCORPACT10 December 2021
DIVIDEND REINVESTMENT PLAN PRICE DETERMINED
Kingfish Limited (Kingfish) advises that the share price used to calculate entitlements under the Dividend Reinvestment Plan (the DRP) has been set at $1.8975.
This is the volume weighted average price of all Kingfish shares traded on the NZX Main Board during the five trading days from and including the ex-dividend date (being 2 December 2021), less a 3.0% discount.
The new shares will be issued on the dividend payment date (being 17 December 2021) to those shareholders who have elected to participate in the DRP.
Ends
Not a very good monthly report from Kingfish
Some big downs on a few stocks
Looks like the three Fisher funds underperformed in November …..losing theirs mojo
http://nzx-prod-s7fsd7f98s.s3-websit...547/361488.pdf
A very poorly diversified fund with the top holdings making up a whopping 69% of funds under management.
On the positive side at least they have continued to beat the NZX50 over the last year.
I think Sam Dickie and his team need some fresh idea's for 2022.
Just "a little" more lol. I sometimes wonder what they do in a quiet month like November when they make no material portfolio changes and none of their companies reported. One supposes that they're all "working" from home.
Just sharing what I know. Fisher have lost their mandate as a default Kiwisaver service provider from 1 December 2021. I don't know how this will affect the billions they have under management in their Kiwisaver and unlisted funds, some of which is invested in the same stocks as the listed Kingfish - Barramundi - Marlin trio but this can't be a good thing.
I have delayed any consideration of investing in their international unlisted managed funds as a precautionary measure.
A day in Sams life
Those bloody Pushpay shares we got. ....jeez down 28% last month ....should have sold when we thought the model ws broken .... but we hoped like hell they'd do OK into the future.
What we do now --- OK lets toss a coin .... heads we sell and tails we keep ..... to fill in the day lets do 50 tosses ..... bugger its come out 25 heads and 25 tails ..... so inconclusive .... so lets buy more as wouldn't want to miss out on the rebound
Just unpacking this a little more. This is not an anti Fisher thing...just coming to grips with the implications for the market.Quote:
Just sharing what I know. Fisher have lost their mandate as a default Kiwisaver service provider from 1 December 2021. I don't know how this will affect the billions they have under management in their Kiwisaver and unlisted funds, some of which is invested in the same stocks as the listed Kingfish - Barramundi - Marlin trio but this can't be a good thing.
I understand that Smartshares has received the tick of approval as a default Kiwisaver provider.
I don't know what happens to the billions Fisher have under management that is there from default up until now ? (default is where people don't choose their own Kiwisaver provider). Does anyone know what happens to those funds ? Are they reallocated to the new Kiwisaver default providers like Smartshares or is it just new funds coming into Kiwisaver that are allocated going forward ?
Either way what we witnessed yesterday afternoon was interesting and was commented on in the after market commentary, (content to come). Sorry can't find that comment easily but essentially it was saying that funds flow from Smartshares appears to have lifted the market in the late afternoon.
Here's my latest working theory. The billions Fisher's have had coming into their funds will reduce materially with the loss of their mandate as a default Kiwisaver provider, (that much is obvious). Fisher's have been stock pickers and a disproportionate amount of their previous inflows have been allocated into the market in the stocks they choose. They are poorly diversified in N.Z. as I've noted in earlier posts. Will the loss of material ongoing buying support affect the share price of Fishers preferred stocks in N.Z ? I don't know.
What are the implications for the shares Fisher's funds own in Barramundi and Marlin ? I don't know but again, it can't be a positive thing.
Smartshares will be investing based on NZX50 index allocations (not stockpicking) so some shares in the NZX50 that have previously had little institutional support will get materially more support going forward. I think that much is crystal clear.
My hint for 2022. Don't underestimate the effect of this over the long run going forward as we are talking billions of dollars of Kiwisaver money invested over time. Stocks in the NZX50 like HGH, GNE, ARV, ARG and OCA, (these are just examples, clearly there are many others) that were not on Fisher's favored list will get a lot more institutional support going forward from here.
There are also clear implications for companies that get added to the NZX50 in the future in terms of the amount of institutional Kiwisaver support they will attract over the years ahead. I'm thinking of HLG and TRA and also wondering about WHS. (Might reinvest previous realised profits in WHS when the time is right).
Disc: I own all the stocks mentioned above, (except WHS).
Disclaimer: This is just a working theory of mine that's a work in progress. Who knows, my thinking might just be a big dog's breakfast...time will tell.
I'm sure it is something like if the old default provider had not made contact/confirmation that they want to stay, with the customer, they had to move them on to another randomly picked default provider, not sure if they also would move them to the new default fund of balanced or whatever it was though
..............see below
If that's the case then the reallocation of capital could have a quick and quite dramatic impact on share prices like we saw in the final 15 minute closing price match process yesterday afternoon and the implications for shares the Fisher fund invest in could be material as they'd be forced to liquidate a portion of their shares.
Interesting times. I am staying well clear of any of Fisher funds investments in the near term because the simple truth is its harder to make headway when the Kiwisaver tide has turned.
Found this. 5 Kiwisaver funds have lost their default status so that's a lot of new money heading to Simplicity and Smartshares and it would seem people are transferred over to a balanced fund with new providers automatically. Gosh the funds flow involved here could be HUGE !!
https://www.depositrates.co.nz/news/...nes-added.html
So old defaulter A has to sell up all their shares - remit the funds to New defaulter and then they buy the "same" shares again or whatever they need to fill the Kiwisaver Fund.
You would think there would be a better way in this technological age - plus if for example FPH as $35 when sold then $38 when bought- Mr/Mrs/Ms etc Kiwisaver customer has possibly lost out.
Yes the Kiwisaver funds are in individuals names but the underlying Shares etc are not.
Here's what Fisher Funds had to say about it back in May when the announcement was made https://fisherfunds.co.nz/newsroom/k...ecember%202021.
Except:- I am a Fisher Funds default client - if I do nothing, what will happen?
You will stay being a Fisher Funds client until the government changes are implemented at the end of November. If you do not choose a fund with Fisher Funds or choose to move to another provider before 30 November 2021, you will be transferred automatically to another provider on 1 December 2021, and you will also be moved into a higher-risk balanced KiwiSaver fund. Emphasis added.
It will be the same for all five of the service providers that lost their default status.
Conclusion - Heaps more Kiwisaver money being invested based solely on NZX50 weighting is coming for certain.
Implications ? See post #558 earlier today.
Think one of the main reasons behind forcing changes was that there were far too many people in the very conservative funds (ie not earning much at all) while the managers were creaming it ---- so govt forced the changes to ensure people had more chance of decent returns and managers had to work harder to earn their keep.
I see Kingfish keeping the faith with A2 ... a true believer
They've added EBO ... that's good
Pretty bad under performance in Dec quarter by fund though - -3.3% v NZX50G -1.8%
Time for Sam to take an extended break methinks
I cant remember if I have moaned about this before.. but i dont get why KFL invest in Infratil. Poor investors have to pay management fees to KFL only for them to pay another manager fees to invest 15% of their portfolio!!
All of their funds are underperforming, see quarterly reports below released today. I'm inclined towards thinking their strategy of investing in growth stocks regardless of the PE may not be the optimal one for the current environment and could potentially lead to a significant period of underperformance. If that happens they may come in for a rerating down so these trade at a discount to the NTA, (like they have most of the time), which could lead to a double whammy of underperformance for KFL, BRM and MLN shareholders. I'm pleased I'm out.
GARP stocks are where its at in my opinion and the Fisher group have very few growth at a reasonable price stocks in their portfolio.
Fishers losing their default Kiwisaver status could potentially see significant fund outflows which might exacerbate any underperformance with the resulting selling pressure.
I can't help feeling Kingfish made a real mess of their ATM investment and have shown an inability to act quickly when the situation changes. I've been very unimpressed lately.
KFL underperformed in the last quarter http://nzx-prod-s7fsd7f98s.s3-websit...272/363428.pdf
BRM also underperformed last quarter http://nzx-prod-s7fsd7f98s.s3-websit...273/363429.pdf
And to complete the losing threesome Marlin also underperformed http://nzx-prod-s7fsd7f98s.s3-websit...274/363430.pdf
Most over priced stock on NZX is KFL at the moment ...with estimated current NAV of just $ 1.63 and SP of $ 1.83 ...more then 11% premium in a rising rates environment is unjustified . Come Nov warrant exercise time ...it will be trading 5 cents below NAV ...so either NAV goes to 1.95 or more ...for that NZX 50 need rise 15% ...or warrants will not be subscribed this time ...1.89 was very ambitious from 1.51 of last issue . Only big NZX 50 rise can get them into the money
You two make me laugh to myself. If as you say the ratio of current market share price (determined by Jo blow public who bid each other up and down in an open market and nothing to do with the fund manager) to NTA makes you consider the stock is over valued then I'd say KFL is the least of your worries. It's not a useful metric to use to state your case...take a look at the stocks you do like and tell me which ones you can buy whose trading price is that close to their NTA value as KFL ..perhaps you could list them. Yield would have been a better metric if interest rates are the concern.
Just pointing out the contrast between today's opinions and the effusive praise of FFs listed funds not so long ago...go back and read some of them 😉
The difference is that KFL just owns other stocks on your behalf. They even tell you what they own. When they trade at an 11% premium it means you could sell your KFL, buy the constituents and end up with a position 11% larger than what KFL hold on your behalf.
Buying now means accepting 11% fewer shares than you could get otherwise, paying for the hope that management's future trades will be better than yours. Or perhaps for the convenience of them selling a portion for you every quarter to fund a dividend payment.
Yep and that's all been well canvased in earlier threads including but not forgetting the advantage offered via the PIE structure concerning dividends. I'm not defending the decisions buyers have made in recent times to bid the price differential, they did it to themselves. Take a look at Rakon as an example. Only buyers can explain why they buy. Sellers too.
Yes maybe the PIE status is useful for those needing the regular income and happy to sell their shares to achieve it.
Simply pointing out the difference - with Rakon it's not convenient to go out and buy a semiconductor factory directly, but it's extremely straightforward to buy a piece of all the assets KFL own directly. The discount or premium to NTA is much more relevant for managed funds than regular shares because buying directly is a real alternative.
No argument with any of that. I myself have pointed out in the past that extracting maximum value from listed PIEs is not a set and forget exercise and if something is too good to believe on either side of the equation then taking action is useful. They should be traded when common sense suggests. Previous comments re KFL falling share price - linked to falling NTA being a function of fund manager under performance is spurious given the fact that the market has been in a slump recently.
I do absolutely believe/agree that at times FF hold on to under performing stocks far too long, A2 being the most recent example and a while back I did post my view that FF stay 'hopelessly in love' with some 'high conviction' stocks long after the divorce papers should have been filed.
To me KFL is not a fund. It's a stock.
It is a listed PIE fund and because KFL in particular is very modestly diversified its absolute child's play to replicate their holdings.
Fisher funds have enjoyed a mandate as a default Kiwisaver fund for many many years and the loss of this mandate should not be underestimated.
Tens and tens of millions of fresh money has been piling into fisher funds on a regular basis and the same stocks that make up KFL, BRM and MLN are the ones in their unlisted funds and kiwisaver funds.
The clear risk here is that without the same quantity of fresh funds coming to the market FF preferred stocks will get materially less support. I think underestimating the potential materiality of this change which came about in 1 December 2021 is a big mistake.
The increase above NTA primarily came about (in my opinion) for two reasons.
1. By far the biggest - ultra low interest rates forcing investors to chase yield and 8% PIE tax free yield is compelling when term deposits were paying less than 1%.
As interest rates increase the drivers behind investor behavior chasing yields regardless of risk and whether they're paid out of capital this will likely reduce.
2. Year of market outperformance. I think, (I could be wrong), we have a paradigm shift in investment drivers now and value and growth at a reasonable price (GARP stocks) are the only stocks that will provide market outperformance. These sort of stocks are either totally absent or woefully underrepresented in FF portfolio's.
I know I have praised FF's before, perhaps too effusively but things have changed and to succeed in this new environment of higher interest rates and higher inflation requires one to very very adaptive and agile...something FF have proven is not one of their strengths. I don't believe any of their funds should be trading at a premium to NTA.
I think we are both in agreement on all of that ✔️
And if it returns to it's historical discount to NTA what will the warrants be worth? Were good selling over 10c I suspect.
Tomorrow's NAV will show if NAV fell more or SP fell more .... todays price action of market will decide NAV of tomorrow ...Still holding on to big premium to NAV ...so has retail interest still .
Mr B is right though ...why pay more if u r not doing better then index ...but it can change if few of its stocks run up fast ...MFT / FPH / IFT / SUM / AIA ...all have equal chance of doing well ahead
Chief investment officer Ashley Gardyne opines on the outlook for 2022. https://www.nzherald.co.nz/business/...OYRNBHIRN7XVA/
Dont agree with his general saying that Sell the outperformers of down market and Buy the bigger down stocks ...ie switch from winners to losers ...lol . That way its like selling SUM and buying OCA ...not a good advise .
But I do get his overall point that now its becoming stock specific market so people should employ professional services of fund managers ...that theme is always advertised or reiterated by them at every opportunity ...:p
Quite the dip in an otherwise constantly increasing stock. Time to top up or still volatile??
Going down from falling NTA and the shareprice premium reducing
That premium still 7% (was about 15%) and possibly will disappear all together soon as the market loses its exuberance
I wouldn't be buying today - esp if you think its cheap because price was higher a month or so ago
KFL's NTA went down by just on 10% in January, same as the market. Not worth any premium when its complete child's play to replicate their relatively poorly diversified portfolio yourself and not incur their annual fees which some years are over 3% per annum.
Beagle's found that old slipper outside his kennel this morning. I expect he settle under a tree and munch away all day, or maybe the rest of the summer...
KFL once traded 20% discount to NTA? Or was that MLN? I remember one of them did for awhile. Just goes to show how far it could fall.
If you want to see a set of financial statements that will blow your socks off - head to the companies office, search for fisher funds, and download their financial statements. Possibly the highest npat % margin you will ever find - all paid out as dividends.
Will be interesting to see what FF’s loss of default status does to their P&L over the next few years.
Guru W69 and super Guru Mr B are super negative on FPH and MFT then how will KFL perform as thats 36% of KFL ....moreover its trading at almost 10% premium to NAV ...what future investors will have in KFL if our Gurus are right ...I wonder
But still many hopeful people are buying warrants at 6 cents in hope of making money by Nov ie they hope KFL SP will be over 195 or more by then ...not possible if our Gurus are right that these high P/E stocks have no future in rising rates environment also premium to nav also has no future in rising rates environment .
Lets see what time tells us ...Me is not negative on KFL stocks but surely was and am negative on premium to nav ...always said its like buying a $ 100 note for $ 110 ...:p
Chief investment officer Ashley Gardyne had another opinion piece in the Herald yesterday about embracing volatility and thinking long term. Read too much like a marketing piece for FF so I didn't post a link. Marlin which is the fund he's primarily in charge of has made some VERY bad calls lately. I suspect later this year once the underperformance to the market starts to make itself crystal clear the premium to NTA will be very vulnerable.
Not sure I am comfortable with 'super guru" status...more comfortable identifying with the Beagle breed that they're usually pretty cunning at finding a feed or sniffing out trouble...but no dog's nose is infallible.
Looks like market not listening to our Gurus ...KFL big mover today ...must be premium widening as its stocks are not up that much ...will know on Thursday
Latest NAV just out today ...it improved only 0.5 Cent and SP up 11 Cents ...premium back to 12 % ...looks like no rates fear for KFL premium payers ...
Latest KFL nav of 1.6170 and SP is 1.86 ....15 % premium ....wow !!!
Stocks to watch is KFL / BRM / MLN ...will retail still be paying 10-15% premiums or it will become discount soon ....I am betting on premiums going away in next few days or weeks .
Still an 11.8% premium......
Kingfish Monthly Update - March 2022 (nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com)
In the current environment I'd suggest these last month types of reports are fairly irrelevant. It's day by day now.
MLNs upcoming warrant exercise is looking to be fairly interesting..