KFL - discount to diluted NAV

[Mrbuyit]

I guess you need to factor in 2 dividends of ~2.5c each between now and end of July, so it's going to be somewhat dependant on how the sp recovers from the dividend payments.
I picked up some warrants last week at .025 as I also think there could a little upside from here.. maybe not 8c but possibly 4 or 5, wouldn't be an outrageous prediction? Or.. get it wrong and they could go close to zero!

[Rawz]

I guess you need to factor in 2 dividends of ~2.5c each between now and end of July, so it's going to be somewhat dependant on how the sp recovers from the dividend payments.
I picked up some warrants last week at .025 as I also think there could a little upside from here.. maybe not 8c but possibly 4 or 5, wouldn't be an outrageous prediction? Or.. get it wrong and they could go close to zero!

I think you will do very well and double your money

[alokdhir]

Close to $ 1.33 tmrw's NAV ...that should be good 2 cents up for the month ...small outperformance on NZX50G 1.21% for the month

If this trend continues for next 6 months to warrants exercise date ...it shud add another 12 cents minus 5.5 cents back as divvies to give July NAV of $ 1.395

Its too simplistic and linear to actually happen like that ...but hopefully we still end up around 1.39 in July as nav

[alokdhir]

In debate KFL vs BRM for current buying ....One further argument in favour of KFL ...future dilution impact of warrant execution will be much lesser for KFL then BRM

BRM expected dilution is appox 5 cents to NAV ...based on estimated 83 Cents NAV at exercise time vs 63 Cents exercise price ie appox 6%

KFL expected dilution is appox 3 cents to NAV ....based on estimated 138 Cents NAV at exercise time vs 126 Cents exercise price ie appox 2% only


So currently BRM should not trade above 4-6%. discount to NAV if one is mindful about impending future dilution ...as part of current NAV will finance discounted warrants conversion .

While buying KFL currently one has lesser fears of such dilution as its exercise price is not that DEEPLY discounted as. BRM


PS : Based on above argument current fair price for BRM should be 77 -5 = 72 Cents while for KFL 133-3 = 130 cents ...while assuming rest being equal ...market risk / fund charges etc

[mike2020]

It was getting there but there has been a decent sized sell this week.

[Toddy]

In debate KFL vs BRM for current buying ....One further argument in favour of KFL ...future dilution impact of warrant execution will be much lesser for KFL then BRM

BRM expected dilution is appox 5 cents to NAV ...based on estimated 83 Cents NAV at exercise time vs 63 Cents exercise price ie appox 6%

KFL expected dilution is appox 3 cents to NAV ....based on estimated 138 Cents NAV at exercise time vs 126 Cents exercise price ie appox 2% only


So currently BRM should not trade above 4-6%. discount to NAV if one is mindful about impending future dilution ...as part of current NAV will finance discounted warrants conversion .

While buying KFL currently one has lesser fears of such dilution as its exercise price is not that DEEPLY discounted as. BRM


PS : Based on above argument current fair price for BRM should be 77 -5 = 72 Cents while for KFL 133-3 = 130 cents ...while assuming rest being equal ...market risk / fund charges etc

Why compare?

Isn't the question 'if I was investing a dollar in the NZX today are KFL warrants a good investment'.

[alokdhir]

Why compare?

Isn't the question 'if I was investing a dollar in the NZX today are KFL warrants a good investment'.

The debate I am referring to is " Is buying KFL now better value or BRM now " ...not warrants ...we are talking about new investments in either KFL or BRM or both and merits of both ....warrants pending exercise can be burden on NAV ....bigger the discounted offer bigger the cut will come to NAV ...so now BRM looks good when NAV is 77 cents but it wont when 5 Cents will get shaved off in one day independent of market action !!

[Toddy]

Because the BRM portfolio has out performed KFL based on the share spot price on issue date then yes, for new investors what you are saying is true.

BRM warants were issue at the bottom of market cycle last year. Perfect timing. So those who bought in November last year got a bargain.
Of course it did mean that the previous years warrants were out of the money and didn't get exercised.

[alokdhir]

Tmrw KFL nav can print close to $ 1.34 ...can show trading again at 6% discount !!!

[alokdhir]

Ytd nzx50g = + 1.89% ...kfl ytd nav = + 2.44%

ytd asx200 = -0.16% ...brm ytd nav = + 1.02%