ATM - A2 Milk Corporation Limited

[couta1]

lol bull well researched got out at the top and short , me making lots moola ... well researched

Lol I'm not talking about studying charts and shorting for trading purposes.

[Gregnz]

I guess when you trade and short like that, you make lots of moola but also pay lots of tax. Thanks for doing your bit to prop up the economy.

Meanwhile I prefer just to sit on my investments long term, and avoid any tax implications as I won’t be classed as a trader.

[Ggcc]

I guess when you trade and short like that, you make lots of moola but also pay lots of tax. Thanks for doing your bit to prop up the economy.

Meanwhile I prefer just to sit on my investments long term, and avoid any tax implications as I won’t be classed as a trader.

Tax is not a bad thing and I would do it to if I knew I would do well, but since I have no idea when to sell or buy trading I stay out and hope for the longterm gain

[Gregnz]

Tax is not a bad thing and I would do it to if I knew I would do well, but since I have no idea when to sell or buy trading I stay out and hope for the longterm gain

Well yes that too, but I see friends and colleagues buying and selling, trying to pick the top and bottom for each investment, potentially making themselves liable for additional tax, meanwhile because I don’t really know what I’m doing I just invest in the companies I think have good long term potential and over the course of the same investment timeframe, my returns appear to be higher as a % by a considerable margin.
Some investments I saw them sell due to Covid while I sat on my hands, and they didn’t buy back in early enough to miss the gains post Covid.
I still think the best strategy for me is to buy and hold.

[Beagle]

Two questions he forgot to address ...almost 6 cents dilution of nav due to almost 85% warrant execution much below NAV , 2.5 cents dilution due to performance fees payable after 31st March and then 2 dividends coming out of NAV before a warrant holder gets his first divvy in June end due to smartly timed warrant execution and allotment dates . Thus making real warrant value at the moment around 16 cents IMHO . alokdhir

Welcome to the forum and thank you for your very useful post. I did not ignore the NAV dilution resulting from the warrant exercise, (probably at $1.51) with my warrant calculation, I assumed an 83% uptake. Worth noting that the performance fees earned are accrued and taken into account with the weekly reporting of KFL's NAV. I looked into the full terms of the warrants this morning and I appreciate you pointing out the dividend timing. Warrants are exercisable as you quite rightly point out on 12 March 2021 and last year the shares went ex dividend for the March dividend on 13 March so all appears okay until one looks at the fine print and finds that the new shares to be issued upon warrant exercise won't be issued until 17/03/21 so you are right about there being two more dividends before warrant holders who elect to exercise receive any.
I will update my valuation in the Kingfish thread this week once they announce their updated NTA on Thursday.
Thanks again for your informative and useful first post. I agree KFL's market outperformance after fees warrants (excuse the pun), a modest premium to NTA.
I think they have jumped the gun with buying ATM, too early.

[couta1]

Well yes that too, but I see friends and colleagues buying and selling, trying to pick the top and bottom for each investment, potentially making themselves liable for additional tax, meanwhile because I don’t really know what I’m doing I just invest in the companies I think have good long term potential and over the course of the same investment timeframe, my returns appear to be higher as a % by a considerable margin.
Some investments I saw them sell due to Covid while I sat on my hands, and they didn’t buy back in early enough to miss the gains post Covid.
I still think the best strategy for me is to buy and hold.

Those that bought in early in A2 and other companies like XRO and just held would have done hugely better than traders but then trading can be a job and fun so horses for courses. PS- I'm applying a buy and hold forever strategy to my PAZ holding.

[alokdhir]

Welcome to the forum and thank you for your very useful post. I did not ignore the NAV dilution resulting from the warrant exercise, (probably at $1.51) with my warrant calculation, I assumed an 83% uptake. Worth noting that the performance fees earned are accrued and taken into account with the weekly reporting of KFL's NAV. I looked into the full terms of the warrants this morning and I appreciate you pointing out the dividend timing. Warrants are exercisable as you quite rightly point out on 12 March 2021 and last year the shares went ex dividend for the March dividend on 13 March so all appears okay until one looks at the fine print and finds that the new shares to be issued upon warrant exercise won't be issued until 17/03/21 so you are right about there being two more dividends before warrant holders who elect to exercise receive any.
I will update my valuation in the Kingfish thread this week once they announce their updated NTA on Thursday.
Thanks again for your informative and useful first post. I agree KFL's market outperformance after fees warrants (excuse the pun), a modest premium to NTA.

Thanks for your encouragement .
My main points remain the same . KFL fund managers doing a great job ..by default A2 good investment as its one of their main picks . Secondly being participant in last 3 warrants issues of KFL ..I have observed that KFL trades at deep discount just before ( ie 60-15 days ) exercise date ...maybe due to people already discounting dilution and secondly due to arbitrage available in selling KFL and buying warrants . Many warrant holders dont have the funds to exercise but they were just playing with the call option which starts loosing time value near the exercise date . Last time it was as deep at 13 % near the end . Current premium to Nav is just retail exuberance ...wont last IMHO . Will be happy to know your insights too . I am very happy long term holder of KFL and think they have done very well in the last 3 years . Fisher funds are best experts of NZ markets ...my experience and opinion !

[couta1]

Thanks for your encouragement .
My main points remain the same . KFL fund managers doing a great job ..by default A2 good investment as its one of their main picks . Secondly being participant in last 3 warrants issues of KFL ..I have observed that KFL trades at deep discount just before ( ie 60-15 days ) exercise date ...maybe due to people already discounting dilution and secondly due to arbitrage available in selling KFL and buying warrants . Many warrant holders dont have the funds to exercise but they were just playing with the call option which starts loosing time value near the exercise date . Last time it was as deep at 13 % near the end . Current premium to Nav is just retail exuberance ...wont last IMHO . Will be happy to know your insights too . I am very happy long term holder of KFL and think they have done very well in the last 3 years . Fisher funds are best experts of NZ markets ...my experience and opinion !

Wrong thread buddy.

[alokdhir]

Wrong thread buddy.

Have mentioned ATM also in the two part reply please . Was justifying why A2 is good investment if KFL is a good investment as originally stated by Winner69 in the morning !!

[Snow Leopard]

Have mentioned ATM also in the two part reply please . Was justifying why A2 is good investment if KFL is a good investment as originally stated by Winner69 in the morning !!

Just ignore him. He is grumpy because A2 is going down and he is being continuously reminded of it.

Mind you I am not exactly overjoyed by the trend myself