BRM - New Warrant Issue for Barramundi

[Basil]

Fair enough...I hear what you are saying.  With Barramundi long term performance, you can skew the results any way you like depending on the timeframe.  The problem is they listed the fund right towards the start of the GFC so the fund initially got hammered.  If you look at long term performance post GFC, I think they have done very well.  They had a different fund manager back in 2010 and I think it took the market a long time to get over the initial period of underperformance of the fund during the GFC...probably a lack of confidence in the early 2010's is why the discount was that high back then.

I think Robbie Urquart has done very well since he was appointed, about 5-6 years ago from memory.  I'm happy to stick with my standard 5 year timeframe because that encapsulates a lot of the very difficult trading since the pandemic hit nearly 5 years ago.  11.8% average annual return after all fees and tax since then is a very credible performance given the significant headwinds over that period and is 3% higher than the benchmark.

Agree 100%, Simplicity is very simple and cost effective.  Also, no charges on transfers between the funds and you can set up regular withdrawals, (like for example the FF group 2% per quarter). 

[Dolcile]

Totally agree, thanks for the background on BRM.   I'll have a bit more of a look tonight. 

[snapiti]

Totally agree, thanks for the background on BRM.  I'll have a bit more of a look tonight. 

save yourself sometime. have a look at page 9 of the 2024 annual report, shows Barramundi's performance versus the 5 year benchmark and shows the history of total returns.
Beagle is right when he says the SP got hammered due to the 2009 GFC.
I am a very happy holder, since buying I have received 6cps tax paid divi and the NAV has gone from 68 to 80cps on top of that

https://barramundi.co.nz/assets/Investor-Centre/Barramundi-Annual-Report-2024.pdf

[Basil]

Well said Snapper.  Going forward as I get tired of number crunching I need to focus on what's going to give me a good feed in my retirement years.

Buying BRM at a 16% discount to NTA, I calculate the effective yield to me, (and I think 2% tax free per quarter is sustainable, certainly has been post GFC)  as follows.  8% / 0.84 = 9.5238% tax free.  I take shares in lieu of dividend at a 3% discount so that return becomes 9.5238 / 0.97 = 9.818% tax free.  The net value of free warrants issued from time to time are on top of that which sometimes are valuable so let's just round that 9.818% return up to 10% tax free for the sake of...you guessed it, simplicity.  10% tax free is worth ~ 15% gross to me on 33% tax rate.
The last time I bought shares on a 15% gross return was HLG in 2016 at $2.75.  Ask me how that's worked out over the years 
What follows is a full list of other companies on the NZX that are capable of paying me what's proven over time to be a sustainable 15% gross return.



That's right, there isn't a single other one.  Beagle is a simple dividend hound dog that likes to be very well fed.

[Dolcile]

I like it Basil. 

Maybe another way to look at it, is by gazing at the accumulated reserves in the latest accounts.   This shows profit each year minus gross dividends (accumulated since establishment).  The balance at June 2024 is -$135,000 (I.e. trivial), which suggests to me that since inception the 8% of NAV dividend has been sustainable. 

Any disagreement with that thought process?

[THESTG]

Does anyone know if you can exercises the warrants via Sharesies?

You can exercise the warrants via Sharesies from today.

[Sideshow Bob]

You can exercise the warrants via Sharesies from today.

Very easy to exercise....took less than 20 seconds.

[thedabsman]

This might be a rookie comment but if I was BRM I'd take all the warrant money flooding in at the moment and buying everything on the sell side till they run out of money. I'm assuming they can do that? I know they can't run buybacks in times like DRP price calc periods etc so just curious..

[Basil]

They usually invest the proceeds into their existing portfolio.  I'd like to see them broaden the scope of their portfolio with some fresh ideas and value buys.
NTA as at close of trade yesterday, (fair bit of green on the screen today already which is on top of that), was 80.56 cps.
You can exercise your warrants here https://www.warrants.co.nz/Barramundi/Application

[snapiti]

exercised my truck load of warrents today, website link could not have made it easier, well done Barramundi

[Basil]

I need to wait until Wednesday next week, (their online warrant exercise system updates your holding eligibility number each Tuesday night), because I have bought even more.  It's like eating at an all you can eat gourmet buffet restaurant at McDonald's pricing...I just can't help myself being a glutinous Beagle.  Hope I don't throw up from overeating lol

[Dolcile]

Basil what have you got the NAV at end of week?

[snapiti]

They usually invest the proceeds into their existing portfolio.  I'd like to see them broaden the scope of their portfolio with some fresh ideas and value buys.
NTA as at close of trade yesterday, (fair bit of green on the screen today already which is on top of that), was 80.56 cps.
You can exercise your warrants here https://www.warrants.co.nz/Barramundi/Application

exercising all those warrent you have is going to dilute my holdings.......lol

[Basil]

LOL sorry Snapper.
Closing NTA estimate is 80.24 cps Dolcile.

[snapiti]

emptied the bank account today for my stack of warrants, can not let the hound dilute my position to much, goona be interesting to see the uptake % given SP is not that much above warrant exercise price but well below NAV, I still think 80% uptake is on the card