Barramundi ( BRM )

[nextbigthing]

For the benefit of someone who is greener than spring growth but interested in learning;

BRM according to ASB stats;

EPS 16c versus share price of .70c seems great to someone green

Dividend 6.3cps giving seemingly healthy return of 9.14%. Seems good.

P.E ratio of 4.25 making it seem cheap to someone green.

And even with 9% dividend there's still 10 cents per share left to play with.

As stated earlier the management fees are hefty but if the return is there....

I haven't researched this company which is obviously something that would need to be done prior to any share purchase however provided these returns were reasonably consistent then seemingly with due diligence his would be a good buy.

Yet the sentiment here seems generally unfavourable (to word it nicely).

So is this because;

a) people are unhappy about the performance and share price given the stellar run of the market as of recent

b) the company is not favoured due to lack of growth potential and relative uncertainty of dividends as opposed to say a utility company therefore 'guaranteeing' neither growth or dividends.

c) Mr market does what he wants.

d) Some other reason

Cheers

NBT

[777]

Answer d) It is an "anti Carmel" thing.

[Lizard]

Answer d) It is an "anti Carmel" thing.

It is always possible that Balance is one of her cousins.

Either way, we are all sick of provoking him into his usual tirade by posting anything remotely positive.

[Balance]

For the benefit of someone who is greener than spring growth but interested in learning;

BRM according to ASB stats;

EPS 16c versus share price of .70c seems great to someone green

Dividend 6.3cps giving seemingly healthy return of 9.14%. Seems good.

P.E ratio of 4.25 making it seem cheap to someone green.

And even with 9% dividend there's still 10 cents per share left to play with.

As stated earlier the management fees are hefty but if the return is there....

I haven't researched this company which is obviously something that would need to be done prior to any share purchase however provided these returns were reasonably consistent then seemingly with due diligence his would be a good buy.

Yet the sentiment here seems generally unfavourable (to word it nicely).

So is this because;

a) people are unhappy about the performance and share price given the stellar run of the market as of recent

b) the company is not favoured due to lack of growth potential and relative uncertainty of dividends as opposed to say a utility company therefore 'guaranteeing' neither growth or dividends.

c) Mr market does what he wants.

d) Some other reason

Cheers

NBT

All of the above plus Fisher's track record of buying them high, and swelling them low - but cranking in the fees - the fees - the fees.

Unit price goes down (say 90 cents to 70 cents), she collects management fees and cries softly into her champagne from the balconey overlooking Takapuna Beach.

Unit price goes up from the bad performance price (say from 70 cents to 85 cents), she collects management fees and performance fees - and cries quietly into her champagne and caviar from the balcony overlooking the Eiffel Tower.

You like?

[Lizard]

Unit price goes down (say 90 cents to 70 cents), she collects management fees and cries softly into her champagne from the balconey overlooking Takapuna Beach.

Unit price goes up from the bad performance price (say from 70 cents to 85 cents), she collects management fees and performance fees ...

Correct me if I'm wrong, but from my reading, there is a "high watermark" applied to the NAV before performance fees can be paid, so she can actually only keep 15% of the return above previous high watermark and does not make any performance fee if overall value does not exceed previous highs. This watermark is adjusted for dividends, so it is possible for the NAV to fall (as it has, being currently below issue price) and still receive a performance fee, provided the dividends plus NAV still amount to an increase in value since last performance fee paid (and the benchmark rate is exceeded in that year).

[Lizard]

Tackling the question as to whether fees are excessive is unlikely to be as clear cut as it appears. However, from what I can see, BRM incurs a 1.25% management fee (reduced for poor performance) and 15% of gains above the benchmark index (subject to high watermark), of which 50% is effectively paid by the issue of new BRM shares.

The high watermark effectively means the last "high" NAV at which a performance fee was paid. The reason there is still a fee at current levels when the shares were originally issued at $1, is that the value is adjusted for dividends issued.

For comparison (and since MFG was mentioned), Magellan Flagship fund also appears to have base fees of 1.25%, but requires performance to exceed 10%pa before paying performance fees and will no longer pay performance fees after 2016. The Magellan Global Fund (unlisted) has base fees of 1.35% and pays 10% of excess return above benchmark subject to also high watermark and also exceeding fixed interest rates (in the form of the 10 yr govt bond rate).

The Milford Asset Management Trans-Tasman fund might be more comparable to BRM, if unlisted, and has a 1.05% base rate and performance fee of 15% above benchmark - the benchmark being NZX50 portfolio index at time of trust deed (net of fees and gross of tax). I could not find evidence of a high watermark, but it is possible there is one.

Pie Funds seems to have a 1.5% base management fee ($150,000 per fund minimum) and a performance fee of 15% of return above previous high watermark.

[nextbigthing]

You like?

I like the idea of starting my own managed fund and collecting $600,000 odd in fees

[Balance]

Answer d) It is an "anti Carmel" thing.

I have witnessed Fisher executives (principally Carmel) marketing the hell out of the 'buy high and keep buying to show performance' King Fisher Fund to entice investors into Barramundi and Marlin. The financial advisors get their upfront fees (very nice) and Fisher gets management and performance fees for life.

The investors get?

Don't believe me? Have a chat with the AFAs (eg. Craigs' advisors) and banks like ASB who marketed the hell out of the Fisher funds - they certainly are keeping very quiet about their involvement!

[bonne vie]

The fees may appear high but to give it some perspective re Kingfish and Barramundi - I am happy with my investment.

KFL - investment $5000, profit to date $5,136.44
I invested a modest $2,500 (my first shares bought) when KFL launched 31/3/2004 and then purchased a further 2500 shares $2,500 31/3/08. By 9/1/13 from dividend reinvesting I had accumulated 7801 shares and sold off 2801( the dividend shares) to realise $3191.25. The current value my original 5000 shares plus this years dividend shares 211 is $6,774.30 - so in total real/paper profit $4,965. 85 (plus sold warrants issued 2010 $170.89)

BRM - 29/4/08 purchased 2000 shares for $1,400 - current paper profit $615.29 or after tax 8.72% (nb return based on days held but not compounded)

So maybe the fees do appear high, but to me the returns are acceptable.

[Grimy]

I've certainly had a lot worse investments than KFL. Sold my last few last week at 1.31. Bought at low-mid 90s. As mentioned above, no one likes paying (high) fees, but the return has been better than a lot of my self-managed shares, so I'm not complaining.