KFL - discount to diluted NAV

[manxman]

Kingfish Limited is a listed investment company investing in smaller
companies that are listed on the NZSX and NZAX, and unlisted smaller
companies. The investment portfolio is managed by Fisher Funds Management
Limited, a specialist New Zealand investment manager with a track record of
successfully investing in smaller company shares. Kingfish began operating in
March 2004 when it received subscriptions for 58.5m shares at $1 per share.

With the warrants out of the way, the fully diluted NAV jumps from $1.23 to $1.39. A predator could make a quick buck by taking over KFL and selling off the silverware.

Or FFManagement could do much the same by quietly selling off assets and buying back heavily discounted shares, thus raising the NAV, and nudging up the share price.

Kingfish started out in March 2004 when the NZX50 was heading up past 2500. Things have been a bit rough lately but the NZX50 is still at 3400, 36% above its level when Kingfish started. So the NAV has kept pace with the index, but the share price is back at square one. Time for action.

Mx

[Balance]

Predator buy KFL? And buy all the problem shareholdings in PPL, Rakon, Mainfreight etc?

The market is not dumb. Look at how BRM has blown up.

[Toulouse - Luzern]

I set up a sample portfolio for analysis of FFM NZ and OZ investments.

Quite simple approach with the stocks in the FFM newsletter. Sample portfolio is not weighted with the actual # of shares or $ value in each stock. I have no insight on timing of FFM buys and sells or exits. So sample portfolio is indicative only.

Bottom line is:
FFM NZ
Since 1 Jan 2008 = no winners and down 27%
Since 1 Feb 2008 down 18%
Since 1 Mar down 9%

Worst stocks are CVT -46%, DLG -36%, MET -36% since 1 Jan 2008
Best stock FRE -8% since 1 Jan 2008
Glimmer of light is that some FFM NZ stocks are positive from 1 Feb and from 1 Mar 2008

FFM OZ
Since 1 Mar 2008 down 9%

ABC -59%
NCK - 24%
DWS -23%

CCP plus 41% (After big write down earlier in 2008)
RKN + 3%, BVA + 7%, WHG + 9% OKN + 4%

[Arbitrage]

In case you missed it here is a link to an article in the Sunday Star interviewing Carmel Fisher
http://www.stuff.co.nz/4457366a13.html

[winner69]

In case you missed it here is a link to an article in the Sunday Star interviewing Carmel Fisher
http://www.stuff.co.nz/4457366a13.html

One good thing for RAK and PPL holders in that story .... they only transferred the Super Funds to them ... the Supper Fund say they are going to hold .... and Fishers buying more .... that'll help the price over the next few weeks or so

[voltage]

This stock must be at a good buy, all the stocks held are now very good value and the fund is also sitting on a very good discount. If most of the warrants are not taken up this will be good news for the head shares.

[COLIN]

This stock must be at a good buy, all the stocks held are now very good value and the fund is also sitting on a very good discount. If most of the warrants are not taken up this will be good news for the head shares.

I tend to agree, Voltage. (See my post of 18 March.)
Also, as Carmel points out in the article in today's Sunday Star Times, following the change in the NZ Superannuation Fund management arrangements, she is again able to resume taking fresh money into her Growth Fund (same investment profile as KFL) so this should help push up the demand for her favourite growth stocks again.

[chrisw]

I have decided that even though there is the possibility of taking a tax loss on the warrants, that I will convert them all to shares. It may mean holding a little bit of extra debt for the next few months, but it would require a big downtime to prevent this one returning to a at worst 10% discount in the next few months.

Cheers, Chris W.

[Balance]

Obviously a very hard swallow for Morningstar to admit that they have recommended a lemonfish in the last 4 years.

When you are wrong, make it even more wrong! Then, it might become right?


Fisher Funds recommended by Morningstar
Tuesday 1st April 2008
Fisher Funds has been given a recommended rating from research house Morningstar, which says the manager "remains one of the best domestic equities approaches on offer".

While Morningstar has issued more glowing reports on the manager previously, the one released today is still positive.

It says that while Fisher Funds has been experiencing "some testing times" it is assured that founder Carmel Fisher can "stay ahead of the market and many rivals over the long term."

Morningstar says two clouds hover over the firm; one is the departure of chief investment office Warren Couillault, and the other is the size of the strategy and liquidity of some holdings.

Couillault's departure is a blow, as there's no doubt he played a key role in the strategy's success during his five years at the firm.

However, Morningstar says not to underestimate Fisher and to remember the firm moved quickly to make a new appointment. Recently it appointed Murray Brown as a senior analyst. Morningstar says Fisher has $400 million invested in its strategy and that it is highly-concentrated and holds some small illiquid stocks.

On the positive side Morningstar says Fisher is well aware of these issues and is able to handle the associated risks.

Morningstar's strongest criticism is over a fee hike last year. It says it's "not overly enthused about the fee hike" which saw the management fee rise to 1.5% plus a performance bonus related to the 90-day bank bill rate.

"This now makes it one of the more expensive New Zealand offerings. We'd prefer to see an equities-based hurdle, which would be more appropriate for this strategy than cash."

Morningstar says it's "comfortable that (Fisher's) strategy's in good shape, and have no problem continuing to endorse it as a supporting player."

It suggests the fund should be used in tandem with a core domestic equities holding.

[ratkin]

Did they sack you ? Or have you lost money because of them ?

You seem very bitter