BRM - New Warrant Issue for Barramundi

[Toddy]

I just had a read of the August newsletter. If you look at the company results since the newsletter was published then you would be thinking, 'has it come to that time when a new fund manager should be appointed'.
The portfolio needs a complete refresh. And why are they so far off the pulse. There are just too many unwanted surprises  with their investments.

Will they continue to underperform the index.

Disc. Hold

[Basil]

Please come along to the annual meeting and vent your frustration.  I will support you.  I agree that their performance this year has been poor.  I'm hoping because they have underperformed so far in 2025, that the rest of the year and 2026 they will outperform going forward. 

[Toddy]

I still don't understand that when it is your day job to analyse and monitor these companies, that you can get it so wrong. Collecting the fees along the way for their expert advice.

The reason that I outperform the index with my own investment strategy isn't because I continue to pick winners. It's purely because I dont invest in dogs, or if a stock becomes a dog then send it on its way.

The news letter stated that the Board fully supports the fund manager and his strategy. Maybe they need to have another board meeting after this week and aim for a more professional outcome.

The current manager is putting investors off investing.

[Dolcile]

Just vote with your feet.  PIE funds seems to have a much better handle on the AU market. 

[Basil]

Warrants will likely have an exercise price of only 64 cents.  Not tying up much money in the hope of a portfolio recovery over the next year. Agree it's been a tough 2025 for Barramundi which is frustrating when you see other funds going well. 

[Basil]

I still don't understand that when it is your day job to analyse and monitor these companies, that you can get it so wrong. Collecting the fees along the way for their expert advice. The reason that I outperform the index with my own investment strategy isn't because I continue to pick winners. It's purely because I dont invest in dogs, or if a stock becomes a dog then send it on its way.
The news letter stated that the Board fully supports the fund manager and his strategy. Maybe they need to have another board meeting after this week and aim for a more professional outcome.
The current manager is putting investors off investing.

Its been a very tough 2025 for Barramundi shareholders with significant underperformance mainly in the first quarter that was a real shocker.  At the forthcoming annual meeting I'm certainly going to ask the fund manager Robbie Urquart what lessons he took from that quarter where they underperformed the market by a shocking 10% !

At times like this I try and do my best to focus on my standard 5 year evaluation criteria which I use for all companies and funds without exception when reviewing their performance.  As we can see in their most recently monthly newsletter at the bottom of page 3 their 5 years average compound return has been 11.7% per annum on a NAV to NAV basis after all fees and tax.  That's just below the benchmark of 12.8% and I believe the main issue was the shocker first quarter this year when some of their holdings took quite a beating.  https://api.nzx.com/public/announcement/456838/attachment/449604/456838-449604.pdf
Their gross return before expenses fees and tax, (don't forget there is tax in there as well) was 14.2% so 11.7% after fees expenses and tax, while lower than the benchmark by a little, is still a satisfactory average annual compounding return over 5 years.

If its any consolation the market really liked Next DC's result yesterday and the updated NAV in my model is slightly up on their most recent announcement and by my calculations end of month NAV is 73.4 cps.  As noted above, my view is the warrants confer great optionality over a recovery in their portfolio and I am keener on them than the shares themselves at this point.  64 cents probable exercise price, (you don't have to exercise them if the market turns badly against us), plus 3.8 cents now = 67.8 cents plus free possible upside to NAV, (which is already quite a bit higher than 67.8 cps at 73.4 cps), over the next 11 months.  Warrants a good risk management tool in my view because you gain all the possible upside to the value of the BRM portfolio but you have a maximum downside of whatever you pay up front for them.

[Dolcile]

Gosh another woeful month and they've doubled down on CSL and Wisetech.   

Adjusted NAV underperformed the benchmark by 370bp.

https://api.nzx.com/public/announcement/458553/attachment/451878/458553-451878.pdf

[Otago K]

Gosh another woeful month and they've doubled down on CSL and Wisetech. 
......

Anecdotally Bell Potter analyst view on the two companies value proposition on 12 09 2025.
CSL the issues of each segment of the business are known to be negative but the market reaction is overly proportionate to the downsides. Will not be a quick bounce back on any fundamentals that will need active management and likely some further shut down than even that determined by the board at the moment. Projection is that at least will be 12 months until any fundamental improvements are in place. HOLD certainly I took from it, perhaps akin to SPK the future success of board strategies will determine the upside potential but they seemed happy to put a BUY to it???

Wisetech was rated the Australian market technical stock to BUY at current prices, potentially only bettered in the established businesses by ProMedicus,that company would be analysed in the Medical category. Think in AUS small tech equities they felt Adveritas ?? ASX.AV1 ticker had a very positive SP trend likelihood by calendar year end.

source: Bell Direct you tube 12 09 2025 hour long webinar, bit of a broker marketing presentation but quite specific into some content should anyone desire to indulge.

[snapiti]

My concern with BRM is they hold little cash for opportunistic buying,they regularly cap raise via warrants but seldom buy into investments outside of current portfolio. Whilst I am happy with my 2 year return it is really only come about from a timely buy in. I think the investment team is somewhat lazy in their approach when actively managing the portfolio. Good exposure to the ASX but will always struggle to outperform the index due to the high number of bank stocks they hold. Do like the PIE tax and discounted DRIP.

[Basil]

They did hold 9.1% cash at the latest full disclosure of portfolio position at the end of June but some of their positions need a deep review.  One of their investment pillars in the STEPP process is not paying to much for growth

Price/Valuation
How much of the future earnings growth is already reflected in the share price? Where does the current share price sit in relation to Fisher Funds' worst to best case valuation range? A company will generate a higher score where the market price currently reflects little of that company's upside potential.

I called the investment manager out on this at last years annual meeting buying stocks like Wisetech and holding XRO on PE's of circa 100.  It was water off a duck's back.  I might try again at this years annual meeting but my sense is that's its a waste of time.  I like the warrants and the optionality they confer and they are an effective risk management tool.  Heavily weighted to warrants at this point as compared to shares.

There is something to be said for investing alongside a professional fund manager who has serious skin in the game as they're simply more motivated to get it right, that's human nature for you.  PIE funds and Discovery come to mind.

[snapiti]

yep had noted the cash pile was close to 10% at the moment, however it is, 90% of the time, only 2 to 5%, giving them few opportunity windows.

[Toddy]

We are getting smashed today.
Wisetech and CSL tanking.
There goes the Xmas bonus for these guys.

It's going to be a long grind from here.

[winner (n)]

We are getting smashed today.
Wisetech and CSL tanking.
There goes the Xmas bonus for these guys.

It's going to be a long grind from here.

Wisetech in news again

Staff insider trading apparently ..the scandle continues

[Basil]

Disappointing.  I think they pay too much for growth stocks and hang on too long after the narrative has changed.  Just holding some warrants now.  Annual meeting this Friday.  Might go along and make some noise if I have the time.  Didn't do any good last year though so probably a waste of my time.

[Minimoke]

6 months ago SP was $0.66. todays its around $0.69. With a dividend in there. I'm not stressed