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  1. #701
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    Quote Originally Posted by Beagle View Post
    Funny you bring this up. I bought some this morning as a reliable dividend payer. I think they will do a warrant issue in the next few months.
    As predicted. http://nzx-prod-s7fsd7f98s.s3-websit...734/329381.pdf
    No butts, hold no mutts, (unless they're the furry variety).

  2. #702
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    Quote Originally Posted by Beagle View Post
    Mr Beagle could you tell me what is the last date that share holders will be offered Warrants? is it 2nd October?

  3. #703
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    Yeap that's the one mate.
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  4. #704
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    Quote Originally Posted by Beagle View Post
    Like clockwork. Happy to have jumped into these March thru April

  5. #705
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    Now trading at a significant premium to NTA, closed at 75 cents and NTA ex divvy is just under 70 cents. https://www.barramundi.co.nz/ 7.6% premium to NTA. Hmmm
    No butts, hold no mutts, (unless they're the furry variety).

  6. #706
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    Quote Originally Posted by Beagle View Post
    Now trading at a significant premium to NTA, closed at 75 cents and NTA ex divvy is just under 70 cents. https://www.barramundi.co.nz/ 7.6% premium to NTA. Hmmm
    Getting in for the warrants

  7. #707
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    Quote Originally Posted by dabsman View Post
    Getting in for the warrants
    With the warrant exercise price at 70 cents and the current NTA of 69.7 cents, I see fair value for the warrants of not more than 4 cents and seeing as its a 1:4 warrant issue that explains about a 1 cent premium to NTA, not the 5.3 cents. I think the market is currently not pricing BRM correctly.
    No butts, hold no mutts, (unless they're the furry variety).

  8. #708
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    I cant find quoting for the warrants yet? Are they allocated today and listed tomoorow or similar?

  9. #709
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    Quote Originally Posted by dabsman View Post
    I cant find quoting for the warrants yet? Are they allocated today and listed tomoorow or similar?
    That's my understanding of the situation.
    No butts, hold no mutts, (unless they're the furry variety).

  10. #710
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    Quote Originally Posted by Beagle View Post
    With the warrant exercise price at 70 cents and the current NTA of 69.7 cents, I see fair value for the warrants of not more than 4 cents and seeing as its a 1:4 warrant issue that explains about a 1 cent premium to NTA, not the 5.3 cents. I think the market is currently not pricing BRM correctly.
    You have to deduct any dividends so the exercise price will be about 65c so you may have to revise your estimates.

  11. #711
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    Quote Originally Posted by tim23 View Post
    You have to deduct any dividends so the exercise price will be about 65c so you may have to revise your estimates.
    Yeah I mucked that up. I will have another look at assessing fair value for the warrants in due course.
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  12. #712
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    Reworked everything up to yesterday based on estimated current NTA of BRM @72.6 cps, (last reported NTA last week adjusted for movement in the ASX index since then as a proxy for how their underlying NTA might have moved since the last NTA was announced). Assuming BRM shares perform in the year to late October 2021 at a rate of 8%, enough so their NTA stays static and they pay out 5.76 cps in dividends the exercise price of the warrants with be 64 cents. On a straight arithmetic basis this suggests the warrants have a fair value of 72.6 c - 64 cents = 8.6 cents.

    It should be noted that upon exercise the NTA will be slightly diluted and also noted that the optionality of the warrants has some value, i.e. one doesn't have to exercise them if the market performs very poorly between now and late October 2021 but contemporaneously one has exposure to unlimited upside in the Australian portfolio BRM has.

    All things considered I see fair value of the warrants at 9 cents.
    Disc: I bought some yesterday and am on the bid for more.
    Last edited by Beagle; 07-10-2020 at 09:50 AM.
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  13. #713
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    Quote Originally Posted by Beagle View Post
    Reworked everything up to yesterday based on estimated current NTA of BRM @72.6 cps, (last reported NTA last week adjusted for movement in the ASX index since then as a proxy for how their underlying NTA might have moved since the last NTA was announced). Assuming BRM shares perform in the year to late October 2021 at a rate of 8%, enough so their NTA stays static and they pay out 5.76 cps in dividends the exercise price of the warrants with be 64 cents. On a straight arithmetic basis this suggests the warrants have a fair value of 72.6 c - 64 cents = 8.6 cents.

    It should be noted that upon exercise the NTA will be slightly diluted and also noted that the optionality of the warrants has some value, i.e. one doesn't have to exercise them if the market performs very poorly between now and late October 2021 but contemporaneously one has exposure to unlimited upside in the Australian portfolio BRM has.

    All things considered I see fair value of the warrants at 9 cents.
    Disc: I bought some yesterday and am on the bid for more.
    Mr B how do you buy more warrants?

  14. #714
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    Quote Originally Posted by FatTed View Post
    Mr B how do you buy more warrants?
    BRMWF is the ticker code.
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  15. #715
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    Updated valuation as of close of business Friday based on last reported NTA of 73.44 cents on 8/10/20 and adjusted for estimated NTA as at close on Friday, index up by ~ 1.4% since then, estimated NTA is thus ~74.5 cps. Estimated exercise price of warrants on 29/10/21 is assumed to be 64 cents, fair value is this thus 10.5 cps.

    I like these warrants because they give good diversification to the Australian market with a good spread of interesting companies in their portfolio. It gives all the potential upside on about 74.5 cps of share value but only on an outlay of around 9 cents so your downside is limited. I think we should (in theory at least) have a better handle on the vaccine situation and recovery prospects by the end of October next year. Barramundi have been significantly outperforming the ASX in recent years as you can see here https://www.barramundi.co.nz/investo...o-performance/

    More on their current portfolio holdings here https://www.barramundi.co.nz/investo...olio-holdings/

    I think there's real value in the optionality these warrants confer, (and also real value to me that they comprehensively beat the index so I don't have to invest truck loads of time doing analysis on Australian companies), so I bought a significant number in this, their first week of being listed.
    Last edited by Beagle; 11-10-2020 at 12:45 PM.
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  16. #716
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    Quote Originally Posted by Beagle View Post
    Estimated exercise price of warrants on 29/10/21 is assumed to be 64 cents, fair value is this thus 10.5 cps.
    But the email from Barramundi says:
    $0.70 NZD per Warrant adjusted down for cash dividends declared on shares with a record date during the period commencing on the date of allotment of the warrants and ending on the last business day before the announcement of the final exercise price.
    I've read that sentence several times, but I cannot for the life of me figure out what it means. Presumably, that's the 6c difference between their 70c and your 64c.
    Can you explain to an amateur investor how this works?

  17. #717
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    In a nutshell, BRM will pay 4 quarterly dividends of 2% of the NTA of the shares during the life of these warrants. With their NTA currently at around 73 cents 4 x 2% x 74 cents = 5.92 cents so my expectation is that the final exercise price of the warrants will be adjusted down for the 4 dividends paid on the shares totaling about 6 cents so my estimate of the final warrant exercise price is 64 cents.

    A very simple way to value the warrants is to take the current share price 78 cents less the expected future exercise price of 64 cents and you get 14 cents but this is too simplistic as the current share price exceeds NTA. Why would the shares trade above NTA one might ask ?

    Three possible explanations are apparent.
    1. The fund has beaten the index so comprehensively in recent years shareholders are prepared to pay a premium over NTA to get the shares. In this case this suggests if this remains then the warrants are indeed worth 14 cents.
    2. The market is yield starved and absolutely loves the 8% tax free PIE yield of these shares = (12% gross for people on a 33% tax rate) and is therefore prepared to pay a premium over NTA to get this yield. If this remains then again, the warrants present as being worth more than 10.5 cps.
    3. Kiwi shareholders are really keen to get some decent and easy diversification into the Australian market.

    I prefer the NTA approach which suggests fair value of 10.5 cents but there is a case to be made that the warrants are worth 14 cents.
    Last edited by Beagle; 12-10-2020 at 09:28 AM.
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  18. #718
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    http://nzx-prod-s7fsd7f98s.s3-websit...876/333422.pdf

    Since coming on board as the senior portfolio manager a few years ago Robbie and his team have absolutely nailed it and really thrashed the ASX index in terms of BRM's relatively MUCH stronger performance.

    I will be attending he annual meeting tomorrow and will make a point of thanking him for his outstanding performance over the years.
    Its clear to me this guy and his team have real skills in the Australian market I don't have so I am more than comfortable relying on their expertise.
    Disc: Shareholder and I hold a significant number of Barramundi warrants (BRMWF).
    No butts, hold no mutts, (unless they're the furry variety).

  19. #719
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    http://nzx-prod-s7fsd7f98s.s3-websit...972/333485.pdf

    I attended the annual meeting today and was very impressed with their presentation and especially impressed with their performance for the year ended 30 June 2020 in which their fund outperformed the ASX index by an incredible 19% ! Had a good chat with their chief investment office Robbie Urquhart afterwards. Nice guy and I think he and his team are right on top of their game. Very happy investor and enjoyed a nice lunch they put on after the meeting too.
    I'm planning on accumulating more warrants from time to time and increasing my stake in Barramundi over the course of the next year or so.
    Last edited by Beagle; 23-10-2020 at 02:31 PM.
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  20. #720
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    Quote Originally Posted by Beagle View Post
    http://nzx-prod-s7fsd7f98s.s3-websit...972/333485.pdf

    I attended the annual meeting today and was very impressed with their presentation and especially impressed with their performance for the year ended 30 June 2020 in which their fund outperformed the ASX index by an incredible 19% ! Had a good chat with their chief investment office Robbie Urquhart afterwards. Nice guy and I think he and his team are right on top of their game. Very happy investor and enjoyed a nice lunch they put on after the meeting too.
    I'm planning on accumulating more warrants from time to time and increasing my stake in Barramundi over the course of the next year or so.
    Fisher funds do a good job although Iím not so sure on ANZ! I used to own kingfish marlin and barramundi

    Whatís the advantage of warrants? Dead cost if you donít exercise them. I must be missing something??? Can you please explain the logic behind warrants rather than purchasing shares directly

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