Marlin & Warrants

[Basil]

Thought I would start a new thread on Marlin seeing as its got a good allocation towards US tech stocks that will benefit from A.I. in the years ahead.

Have been quietly adding MLN shares for more than 6 months and have enjoyed good gains and the new warrant issue which started trading yesterday which closed its first day or trading at 4 cents.

Latest NTA was just over $1.05.  The warrants confer a great leveraged exposure to the underlying assets of Marlin.  Ticker code is MLNWG.  The black and shoals option pricing model I use shows fair value of 6.51 cents using the last traded price of $1.01 and exercise price of 96 cents, dividend rate of 8%, volatility the usual 15%. (If you use the latest NAV of $1.05 as a proxy for the share price and the above parameters again the theoretical price rises to 8.8 cents).

A reminder that warrants confer the right but not the obligation to buy shares in MLN at a fixed future date, (mid May 2025) at a fixed price of $1.04 (less all dividends paid on the ordinary shares between now and then), probably net exercise price of about 96 cents.  With the NAV recently reported at $1.05 I reckon there is real value there and bought lots on market yesterday.

Risks.  Warrants are either hit or miss, you generally do really well or lose your money, all depending on the underlying direction of travel of the shares owned by Marlin over the next year.  I think there's a lot more growth in the US markets and economy than what we will get here in the near future.

[Basil]

Warrants, MLNWG, starting to move but still a long way to go in percentage terms to get to fair value, see above. Lots of stocks in the Marlin portfolio that will benefit from the strong growth in A.I.

[Gerald]

https://www.nzx.com/announcements/440386

Few acronyms jump to mind reading this new NVIDIA investment. Maybe YOLO or FOMO?

[Minimoke]

https://www.nzx.com/announcements/440386

Few acronyms jump to mind reading this new NVIDIA investment. Maybe YOLO or FOMO?

They seem very late joining the NVIDEA party to me. This company really started to take of when they were suppling  chips for cryptocurrency miners

[Sideshow Bob]

Maybe a desperate move to try and get the warrants in the money??

[Dolcile]

what a joke, 12-18 months too late. And 1% of the AUM. It is 6% of the SP500 index!

[777]

Well NVIDEA now up 50% since September 24 end.

[Mos]

High fees low returns...

"Marlin Global Limited (NZX: MLN) today announced a net profit after tax of $0.3m for the 12-month period ended 30 June 2025.
 
 Key elements of the FY25 result include net profits on investment of $4.6m, dividend, interest and other income of $1.2m, offset by expenses, fees and tax of $5.5m.
 
 Chair Andy Coupe noted "It has been another volatile year for international equity markets, with market sentiment being influenced by a myriad of factors, including US tariffs and geopolitical uncertainty. While international shares have performed well, Marlin's performance has been disappointing, with the portfolio's exposure to underperforming sectors like the US Health Sector dragging the performance down."
 
The adjusted net asset value (NAV) return** was +0.2% and the gross performance return**** was +2.7%, which were well below the company's benchmark index*****, which was up 14.9%. The total shareholder return* was +2.8%."

[Dolcile]

absolutely woeful performance.  I don't mind active management for small markets like NZ and AU, but for international I prefer straight up index funds.

[Basil]

Agreed.  Its very disappointing.  Even zooming out over 5 years, (which is what I do all the time when assessing companies), their performance NAV to NAV is 6.5% per annum, only half the benchmark of 13% per annum https://api.nzx.com/public/announcement/456839/attachment/449615/456839-449615.pd
Its not plausible to try and make any case that Sam Dickie and his team add any value for the fees charged.
I would however argue over the medium term the team at Barramundi have done okay and the team at Kingfish have done an outstanding job of beating the NZX50.  A case of Fisher funds knowing their local markets a lot better, I would suggest.
Disc: Kingfish and Barramundi share and warrant holder, no investment in Marlin.