KFL - discount to diluted NAV

[winner69]

Well that premium to NV which got to 13% just over a month ago has dissipated pretty quickly - now shareprice is a fraction over NAV

Suppose something to do with impending warrant conversion....if all converted lowers NAV to about $1.80 (I think)

So is the 'premium' adjusting to the the lower NAV - would still be 6%

Kingfish gurus = how have things played out at previous conversions?

Just wondering if we will see KFL bak trading at a discount to NAV

[alokdhir]

Well that premium to NV which got to 13% just over a month ago has dissipated pretty quickly - now shareprice is a fraction over NAV

Suppose something to do with impending warrant conversion....if all converted lowers NAV to about $1.80 (I think)

So is the 'premium' adjusting to the the lower NAV - would still be 6%

Kingfish gurus = how have things played out at previous conversions?

Just wondering if we will see KFL bak trading at a discount to NAV

Normally it would have been around 10-15 % discount around this time of the warrants exercise time line ....but keeping in view the strong retail participation due to the demise of term deposits as regular income its just about back to NAV levels

So in my view its still around 10-15% premium to regular levels what should have been ...here market correction also played a role to help close the gap fully .

IMHO this premium will return after warrants conversion done and dusted and markets recovering from these corrected levels . This is a good opportunity to invest in KFL at very reasonable levels for regular income part of your portfolio at least . KFL always does very well after warrants conversion

[Beagle]

Adjusting the last reported NAV for estimated index decline of 2.5% since then gives me an estimated closing NAV today of $1.82.
Adjusting for the pending warrant issue and assuming all warrant holders exercise @ $1.51 I see that reducing NAV by ~ 6 cps to fair value of $1.76.
Fair value of shares carries rights to the pending distribution in March of an estimated 3.8 cps so NAV fair value ex divvy adjusted for warrant exercise is ~ $1.72
Warrant exercise does not confer rights to the pending dividend so fair value of warrants = $1.72 - $1.51 = 21 cents.

Anything above those figure which the shares or warrants are trading at is the premium to fair value, e.g. shares closed today at $1.90, NTA estimated, adjusted value for warrants = $1.76 = 8% premium.

If I recall correctly there was a bit of a bonanza at the last warrant conversion as the warrants were trading at one point at a 13% discount to fair adjusted value pending exercise

Whether the shares and warrants are worth the premium to estimated adjusted NTA is up to each investor to decide for themselves. If anyone's interested, a few posts back I noted what I had done in regard to my warrants.

The premium these are trading at suggests to me there's a large number of investors chasing the PIE tax paid dividends of 8% per annum. I note significant premiums in Barramundi and Marlin.

[justakiwi]

Anyone know when shares from exercised warrants will be allocated? Thought it was supposed to be today.

[Beagle]

https://kingfish.co.nz/documents/gen...sed-316264.pdf 17 March.

[justakiwi]

Ah, thanks. I did google it but the info I found had no allotment date.

https://kingfish.co.nz/documents/gen...sed-316264.pdf 17 March.

[FatTed]

When the new tax rate of 39% comes in April for those so lucky, will these funds (KFL and BRM) be more tax efficient, does it mean that it may be worth buying these shares above NAV?

[alokdhir]

When the new tax rate of 39% comes in April for those so lucky, will these funds (KFL and BRM) be more tax efficient, does it mean that it may be worth buying these shares above NAV?

Now they save 11 % instead of 5% before of tax for high income earners ...so extra 6% savings from April onwards ...maybe worthwhile for such high earners to pay one time premium for all future year savings of 11% tax

[justakiwi]

KFL was my first purchase back in 2016 and it has served me very well. I have taken advantage of warrants issues and DRP to grow my small holding, and my annual total return has been in the vicinity of 24%. I have never bought any additional shares on market and have no plans to do so. I just sit on it and let it go it's thing and I have not been disappointed.

[alokdhir]

Being a holder in all Fisher listed funds since 2010 ...I can say KFL has done the best out of the lot and it has done very well for me . I also take DRP and sell on market for my regular retired income requirements .

Since last Nov they all have gone at substantial premium to market ...Highest being BRM and lowest for KFL ...it seems market is trying to price them based on 6-7% dividend yield instead of NAV based .

Doesn't look like premium will go away soon as it suits regular income retirees as well as high income earners on 39% incremental tax rate . Being a listed PIE there dividends are taxed at 28% final ...as well no need include there income in IR3 if it suits individual investor . So they have very distinct tax advantages over direct investments for some .

Overall KFL is very well managed with exceptional track record ...fully recommend as a very satisfied investor since 2010