Marlin Warrants MLNWE

[SPC]

Maybe that last sentence needs a little more analysis. Shares issued at a value higher than NAV come at a price to the acquirer higher than if they were issued at NAV value. I.e the fund is paying you a bonus to take them above net value -referring to the underlying assets. The fund has to issue new shares from previous on market purchases or new issues.
DRP issued shares are discounted by 3% to the weighted average trading price over 5 days following ex div.
Can't see this adding to NAV which relates to the underlying assets rather than the head share price.
Right or wrong....?

[alokdhir]

Maybe that last sentence needs a little more analysis. Shares issued at a value higher than NAV come at a price to the acquirer higher than if they were issued at NAV value. I.e the fund is paying you a bonus to take them above net value -referring to the underlying assets. The fund has to issue new shares from previous on market purchases or new issues.
DRP issued shares are discounted by 3% to the weighted average trading price over 5 days following ex div.
Can't see this adding to NAV which relates to the underlying assets rather than the head share price.
Right or wrong....?

If shares issued at higher then NAV then it boosts the NAV of the whole lot ...same reason why warrant exercising at less then current NAV ( this has been the case for every warrant conversion ) brings down the NAV of the whole lot ...so called dilution effect of warrants converted to shares under NAV price

Why it adds as these days DRP price is much higher then current NAV so new DRP shares get issued above current NAV so it boosts the older NAV marginally

Example ...last DRP price of KFL 1.8421 ...NAV was 1.7863

[Beagle]

Quite a few opined recently that a ~ 35% premium to NTA for MLN and BRM is nuts or words to that effect. I'd like to disagree because of their well above benchmark average performance in recent years. Alas, I cannot disagree with good conscience. I think there is a desperate scramble for tax free yield and a lot of elderly investors have put their faith in Fisher funds without realizing the implications of what investing at a ~ 35% premium to NTA does to future likely returns.

I'm not buying into this irrationality and if the warrants are not priced sensibly I won't be a buyer. I see fair value (taking into account all the attractive features of Marlin's structure and the excellent skills of their investment team) at 12 cents...if its more than that i will sit on the sidelines like a patient puppy looking for a more opportune time for a feed. I am 99% sure my patience will be tested and am well prepared for that.

[alokdhir]

Quite a few opined recently that a ~ 35% premium to NTA for MLN and BRM is nuts or words to that effect. I'd like to disagree because of their well above benchmark average performance in recent years. Alas, I cannot disagree with good conscience. I think there is a desperate scramble for tax free yield and a lot of elderly investors have put their faith in Fisher funds without realizing the implications of what investing at a ~ 35% premium to NTA does to future likely returns.

I'm not buying into this irrationality and if the warrants are not priced sensibly I won't be a buyer. I see fair value (taking into account all the attractive features of Marlin's structure and the excellent skills of their investment team) at 12 cents...if its more than that i will sit on the sidelines like a patient puppy looking for a more opportune time for a feed. I am 99% sure my patience will be tested and am well prepared for that.

12 cents is right price for me also ...agree with u ...it means u think NAV will be close to or over 130 when exercising time comes in 12 months ...thats a market call also over a year horizon . So if u buy warrants around 12 cents then final MLN price will be 118 + 12 = 130 ...very close to NAV after a year ...so will make it a good buy .

Need wait for such price to come ....year is a long time ...many ups and downs possible

But wont happen soon seeing how the markets trending ...

Also keep in view that MLN portfolio is unhedged so NZD appreciation hurts its NAV and NZD is trending up ...

[winner69]

Also keep in view that MLN portfolio is unhedged so NZD appreciation hurts its NAV and NZD is trending up ...

...but it’s benchmark is 50% hedged ...hmmm

[alokdhir]

...but it’s benchmark is 50% hedged ...hmmm

My bad ...stand corrected W69 must be right

still 50% can hurt if NZD appreciated 5% in a year ...very possible

[winner69]

My bad ...stand corrected W69 must be right

still 50% can hurt if NZD appreciated 5% in a year ...very possible

I don't know if fund actually hedged - just saw benchmark is 50% hedged

[Beagle]

Had a chat a while back with Wayne Burns corporate manager for the Fisher group who confirmed that forward cover is entirely at the discretion of the investment team and changes from time to time.

Had a chat with Alistair Ryan the Chairman after the Barramundi annual meeting last year and he told me most shareholders really like the regular warrant issues.
There was a really positive atmosphere at that 2020 meeting after a 19% market outperformance by Barramundi that year !!

[alokdhir]

I don't know if fund actually hedged - just saw benchmark is 50% hedged

I also checked ...maybe just benchmark hedged ....no where mentioned about portfolio

[alokdhir]

First trade @ 0.228 cents ....