AAC – I bought this stock earlier in the year for about $1.30 and had expected to grind up slowly to a more realistic NTA of about 1.60, being the top of a trading range in which I may sell.
They released their results last week and on extremely large volume they consolidated above this trading range that had historically been tough to crack. As I write they are at $1.75 and I am conscious of the fact some in the investment community love to jump on the “invest in food” bandwagon. I remember about 10 years ago it traded comfortably above NTA for a long time so I am prepared to let this winner ride for the time being. I will look at it again if I am fortunate enough to see it crack $2 as a potential sell.
KBC – Last I wrote I was quite pleased to see the Wilson Asset Management proposed restructure. Since then some movements on the register, with Bentley Capital acquiring the Wiley stake of about 17% of the company has really complicated things. I could write pages on this and the potential outcomes but it probably doesn’t help with all the uncertainties and the stock trades too light to trade anyway. Here are some thoughts regardless!
I thought a long time ago Wilson was a significant shareholder of BEL and was trying to maybe wind it up or get control somehow. However, his plans failed and he got rid of his stake to someone. It is quite hard to assign probabilities to this now as we are dealing with a lot of egos I suggest. From here I doubt BEL want to support the restructure without making any noise that is for sure. They may just want to sell for a quick profit to Wilson or Bolton. Otherwise they may wish Wilson gives up and they try to get his stake, or some board control and bleed other shareholders, that is the risk here.
As a KBC shareholder the best you can hope for is Wilson perhaps swallows some pride and actually gives BEL a quick profit by buying their stake out. If Wilson has to pay a high price to buy out Bentley and the Nicholas Bolton stake to go ahead with his plans maybe it all gets too hard? Could he even turn around himself, ditch this restructure, and sell his stake to them and walk away?
After talking about a negative scenario I think it is important not to lose sight on how CSE and PTB are trading so strongly. Both large positions for KBC. They haven’t updated their NTA for a while but I am thinking 20 cents should be more of a conservative estimate, rather than be fooled by the restructure announcement that mentioned a 15-20 cents range.
Ok by coincidence they seem to have released an NTA not long after my last message for the first time in a while. The number is 20.7 cents but that is for April 30. During May CSE looks to be up about 30% and PTB up nearly 20%.
PTB – So it appears that the formal announcement of the dividend that was so clearly telegraphed to occur in various previous company announcements has resulted in some strength in the share price. Sometimes the markets do not seem so efficient. Buyers recently content to pay about 30% more for the stock compared to a month or two ago when we already were aware this dividend was coming. In fact, it was fairly clear even well before that. As I write this has now gone ex the 5 cents dividend, trading at 48 cents, having bought around 6 months or so ago at 38 cents. During this period, I didn’t think any new information about the business was made apparent.