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  1. #1
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    Default KFL - discount to diluted NAV

    Does anyone else think that the current discount to diluted NAV is a bit large for Kingfish limited?

    Ordinary Shares trading at 95 cents
    NAV per ordinary share = 134.89 cents
    Diluted NAV per ordinary share (allowing for conversion of warrants at $1.00) = 117.56 cents

    Discount to NAV per ordinary share = 29.6%
    Discount to NAV per diluted ordinary share = 19.2%

    Kingfish have a buyback program for both the ordinary shares and the warrants, the ordinary shares purchased are being held as treasury stock, and the warrants purchased are being cancelled. So this should all be positive for the diluted NAV in the future.

  2. #2
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    KFL head shares are back to the $1 mark, as we get closer to the 31 March warrant conversion date, the buyback program continues and some of the core stocks in this fund have recently announced impressive results.

    If I'm reading the chart right the 30 day moving average is also now above the 100 day moving average. Which is a technical buy indicator.

    As we get nearer to the 31 March warrant conversion date if the head shares remain above the $1 mark then some warrant holders may wish to convert. The warrants appear to have been holding the head shares back due to the dilution effect.

    Anyone think this stock is overvalued at $1 ? I don't

  3. #3
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    This stock has been undervalued for quite some time now!

    If it was a normal unlisted unit trust, then it would cost 1.17 to enter this unit whereas now it can be purchased at a huge discount.

  4. #4
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    Default

    quote:Originally posted by D_Pick

    As we get nearer to the 31 March warrant conversion date if the head shares remain above the $1 mark then some warrant holders may wish to convert.
    It wouldn't make sense (doesn't mean no one will do it, of course) to convert unless the head shares were worth the same or more than the warrant SP plus cost of conversion ($1). Otherwise it would be cheaper to sell the warrants on market and buy the heads (give or take to odd bit of brokerage). With warrants priced at .136 the heads still need to gain another 13.6 cents to make conversion a goer.

  5. #5
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    As a matter of principle, any listed investment vehicle should trade at a discount to NAV, my thinking is that discount should be sufficient to cover the NPV of future management fees.

  6. #6
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    Check it out, as I haven't bothered to do so, and have no holding or real interest, but I had an idea that warrant conversion could take place
    on 31 March on any of several years, not just this year, if this is the case the warrants could have value for a year or two yet, only the prospects of a large dividend would entice early conversion, but maybe I am wrong.

  7. #7
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    Good point Bobby_Fischer

    I'm assuming some warrant holders who picked the warrants up for free in the initial public offering will convert providing the head share is above $1. However if they are smart then it would be a better deal for them to sell the warrant and buy the heads for a (further) discount to NAV. i.e sell the warrant at 14c and effectively purchase the heads at $1 minus 14c = 86c. Currenty NAV is about 1.17 so this would be a 26.5% discount to diluted asset backing.

    From the Investment Statement

    Offer Summary

    For each Share issued, subscribers will receive one Option
    (the Option) to subscribe for a Share at an exercise price of
    $1.00 exercisable on any of 31 March 2006, 31 March 2007
    and 31 March 2008. Holders can exercise some or all of their
    Options on any of these dates subject to a minimum exercise
    of 500 Options.

  8. #8
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    I am thinking that KFL is a little undervalued, given the recent movements in its core investments. The price has moved today on the WAM merger, however PPL and FRE and RYM have all been trucking along at considerable rates.
    I think we will see KFL continue to reach new highs over the next few weeks and months.
    Others' thoughts welcomed.

  9. #9
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    quote:Originally posted by Nigel

    I am thinking that KFL is a little undervalued, given the recent movements in its core investments. The price has moved today on the WAM merger, however PPL and FRE and RYM have all been trucking along at considerable rates.
    I think we will see KFL continue to reach new highs over the next few weeks and months.
    Others' thoughts welcomed.
    Wait for the next TUA - KFL bought up to $4.50, sold out at $2.20.
    Or POD - bought up to $1.80, sold out at $1.16.
    Or BGR - bought up to $2.70, sold out a $1.40.
    Or RBD, or KID, or WHS or ......[xx(]

  10. #10
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    They have had some poor investments but my point is that their current holdings are performing well, and this value is not shown in the current shareprice. Sure, they may (and probably will) make some poor choices in the future, but the immediate future look positive.

  11. #11
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    quote:Originally posted by Nigel

    They have had some poor investments but my point is that their current holdings are performing well, and this value is not shown in the current shareprice.
    Are you saying that the discount has got even bigger, or that the underlying shares that they invest in are undervalued.

    I have considered investing - though of doing a play on the discount but if the discount never goes away, there is no play. Note: When I bought into WINZ it was at about a 10% discount. Not sure what it is now but it closed up jsut after my purchase (I consider this luck rather than planning but has made me think).
    Free delivery worldwide with Book Depository http://www.bookdepository.co.uk

  12. #12
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    quote:Originally posted by Nigel

    They have had some poor investments but my point is that their current holdings are performing well, and this value is not shown in the current shareprice. Sure, they may (and probably will) make some poor choices in the future, but the immediate future look positive.
    Accidents waiting to happen - that's how I would describe some of KFL's investments and investment strategy. TUA, RBD, WHS, BGR, KID, POD etc make for a parade of uglies invested in by KFL. What else lurks in the portfolio? That's why the share will always trade at a discount.

  13. #13
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    Back in December, at the start of this thread:
    Ordinary Shares trading at 95 cents
    NAV per ordinary share = 134.89 cents

    eg shares trading at a 29.6% discount to NAV,

    NAV as at 15 March = 146.64 cents
    Ordinary shares trading at 108 cents yesterday

    eg shares trading at 26% discount but not including any of the WAM (or recent PPL etc) action

    The shareprice has accelerated recently to reflect the earlier value that was there, but I think it has some steam in it yet.

    Disc: Hold KFL



  14. #14
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    quote:Originally posted by sniper

    Accidents waiting to happen - that's how I would describe some of KFL's investments and investment strategy. TUA, RBD, WHS, BGR, KID, POD etc make for a parade of uglies invested in by KFL. What else lurks in the portfolio? That's why the share will always trade at a discount.
    KFL was at the end of February invested in CTL, CVT, FRE, MFT, MHI, NZX, PPL, RYM, SOE, WAM according to the Fisher Funds Newsletter.

    So now is your chance to prove that you are more than a backward looking whinger and tell us which of these are the accidents waiting to happen and why.
    om mani peme hum

  15. #15
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    quote:Originally posted by Paper Tiger

    quote:Originally posted by sniper

    Accidents waiting to happen - that's how I would describe some of KFL's investments and investment strategy. TUA, RBD, WHS, BGR, KID, POD etc make for a parade of uglies invested in by KFL. What else lurks in the portfolio? That's why the share will always trade at a discount.
    KFL was at the end of February invested in CTL, CVT, FRE, MFT, MHI, NZX, PPL, RYM, SOE, WAM according to the Fisher Funds Newsletter.

    So now is your chance to prove that you are more than a backward looking whinger and tell us which of these are the accidents waiting to happen and why.
    Could be NZX, could be CTL, could be SOE, could be FRE. History says that there's a strong likelihood that one or more will blow up in the next 12 months.

    Would you invest in a company when it has that kind of track record? [^]

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