Marlin

[percy]

[QUOTE=Beagle;723514]I know you guys aren't keen on Marlin and understand why and agree there is no evidence that their analysts add value and I also agree the performance fees are expensive.


Ending up having to convert the options means adding to your exposure, to "there is no evidence that their analysts add value etc.".
Therefore, I would think you would need to sell them before conversion.
And that is the risk.

[Beagle]

Yes ideally it would be good to cash these out for a handsome profit before 12 April 2019, (the exercise date)

Current NTA ~ $102.5, exercise price of warrants ~ 75 cents. Risk is considerably ameliorated by the large potential discount to NTA in my opinion.

Horses for courses...all shares / warrants involve risk. As always its a case of investors weighing up the potential risks and rewards for themselves. Its not my first rodeo...I have seen what happened to Kingfish warrants before....that was a wild ride !

[tim23]

The discount is a bit harsh like I've previously stated unlike KFL or BRM, MLN are invested outside Australasia so if the portfolio was sold on Monday the stakes are so tiny that they won't move the market.

[winner69]

The discount is a bit harsh like I've previously stated unlike KFL or BRM, MLN are invested outside Australasia so if the portfolio was sold on Monday the stakes are so tiny that they won't move the market.

I note that at 31/7 the discount to NAV for BRM was about the same as MLN .....so your argument about liquidity being the reason doesn’t apply

High discounts to NAV are the norm ....always have been and will always be. Do you really think that this will ever change?

[winner69]

Believe it or not gurus who trade these sort of funds have a thing called a z-stat to see how valuations are going ....


.....and on that measure MLN is ever so slightly underpriced at the moment .....but not a SCREAMING BUY

[percy]

I very much doubt MLN has every been,or ever will be a SCREAMING BUY...........lol.

[Beagle]

MLN performance report says they returned 23% for the year to 30 June 2018, not too shabby. Yes their fees and the performance fee is very expensive and yes the warrants are still a cheap short term punt with interesting upside potential.

Warning, this is definitely not a grannies and orphans thing these warrants. They could be worth anything from 0 - 30 cents in April 2019 under a number of scenarios I have modelled. (Thing is and nobody ever talks about this much, all shares could get absolutely smashed in a GFC MK2) and at least with this one you're only risking 8 cents up front. Warrants confer the right to subscribe for shares but not the obligation. Invest in the shares, risk 90 cents per share. Invest in the warrants, risk 8 cents per warrant. Your maximum possible downside between now and 12 April 2019 is clearly a LOT higher per share with the shares than with the warrants but you have the same upside with the warrants. Its risk mitigation.

[winner69]

WINX.ASX good punt, divie due in two weeks

[tim23]

I note that at 31/7 the discount to NAV for BRM was about the same as MLN .....so your argument about liquidity being the reason doesn’t apply

High discounts to NAV are the norm ....always have been and will always be. Do you really think that this will ever change?

I'm saying because Marlin have such tiny holdings in global companies then if they sold the portfolio tomorrow they wouldn't be market moving whereas in NZ or Australia it could do so esp inNZ.
I hold shares in AFI and they trade at about NTA?

[winner69]

I hold shares in AFI and they trade at about NTA?

Punters love AFI eh ...always have.

I see from one of their charts they regularly trade higher that NTA

But that doesn’t automatically mean MLN should trade close to NAV does it ..hardly ever has and unlikely ever to do so.

Obviously completely irrational and makes no sense? Don’t think so, must be a lot of entrenched reasons why it does .....and what’s going change to reverse what’s reality.