East & Sub-Saharan Africa Investing Blog [View instapost]
Hi folks,
I've seen Ethiopia mentioned here a few times recently. Pittards (PTD:LN) can be considered a play on Ethiopia. Its market cap is admittedly small, but somewhat deceptive - as the company's annual turnover is nearly $60 mio.
I Love Dividend-Paying Stocks, But I Hate Dividends [View article]
Thks, I was feeling lonely out here all by myself..!
Yes, everything in moderation, but of course the most egregious serial/Ponzi issuers are exactly the stocks which suck in the most idiots - I watch in dread...
ps I also watch some of the Pimco CEFs with a similar dread - it's one thing for an 'investor' not to be able to read a cashflow statement, but there's no hope if they can't even understand paying a 40-50% premium is totally ludicrous.
Yeah, I was feeling pretty confident of my valuation scenario for Fortress. And v happy to wait around for it to unfold - meanwhile, I had the reassurance of FIG's dividend & financial strength.
But little did I imagine that FIG would actually end up being revalued so dramatically & so quickly..!
Other US-listed stocks I own include $ASFI & $TRIB. And I recently bought Tetragon Financial (TFG:NA) - foreign-listed, but offers v interesting US credit exposure.
East & Sub-Saharan Africa Investing Blog [View instapost]
Hi folks,
Yes, I can personally recommend Advance Frontier Markets Fund (AFMF:LN). ;-)
It's probably the cheapest frontier markets fund out there - it's on a 9.5% discount to NAV (rallied sharply YTD - but I haven't seen anything more than a 15% discount in the past yr or two), and many of its underlying fund investments trade on significant discounts also. Not to forget frontier market valuations are also pretty cheap in relation to developed markets & to their estimated growth potential. AFMF is also the most diversified fund you can buy, both in terms of its own country allocations, and of the underlying fund allocations.
It's on my list of possible write-up stocks. It actually has a (dormant?) US ticker, but right now I just don't feel up to the aggravation of submitting a foreign stock article to SA editors... Sign up for email alerts at http://bit.ly/MVFfyk and you might see more abt AFMF & other similar opps. in due course.
Blackrock Frontiers IT (BRFI:LN) is the obvious competitor. It's not as cheap (5.8% discount, in line with its recent history) & somewhat less diversified (invests in stocks, not funds), but you get an active stock-picking approach & Blackrock's muscle behind it, so it's pretty attractive also.
Africa Opportunity Fund (AOF:LN) well worth a look also, on a 20.1% discount & looking set to rally for the new year. Which reminds me, the only US frontier markets fund that's impressed me is Market Vectors Africa ETF (AFK:US). The rest are pretty much rubbish - look at their portfolio allocations - not so diversified at best, downright misleading at worst!
There's one other v promising frontier markets fund I'm keeping an eye on - but it's a bit of unusual story, and clearly flying under the radar at the moment. I'll save it for a closer look first, and then possibly an interesting write-up.
Well, historically the main cause was a necessary accounting entry from their IPO to end-2011 - Principals Agreement Compensation, a $1 billion annual expense which had no cash/economic impact.
Then there's equity compensation: Of course, that's ultimately a real expense - it just shows up as dilution of intrinsic value for other shareholders (i.e. an expanding share count). But it's not a cash expense up-front - and it usually vests over a number of years, is dependent on performance, may be dependent on the share price, and it lapses if an employee leaves. From my perspective, I generally expect that a firm's future AUM/intrinsic value potential will more than adequately absorb this future dilution potential. [Of course, that won't be the case if AUM/intrinsic value started to go into serious decline...but you're probably not going to be worrying abt the potential then anyway!] Therefore, I'm usually happy to exclude equity compensation as a current expense.
Take a look at FIG's cashflow statement instead, this confirms their underlying cash/earnings generating power - for the last three FYs, free cashflow (net cash from operations, less capex) has averaged $188.9 mio per year.
Thks. Always difficult to explain under-valuation: One (slightly silly) reason I'd hazard - FIG's flies under the radar, the likes of KKR, Blackstone, etc. hv always attracted more media attention & publicity, which I think has diverted quite a lot of investors away from Fortress & into its peers.
Quite honestly, I'd invert - I avoided FIG for years because it was ridiculously over-valued - stocks like that eventually fall back to earth, and usually then endure a punishing period of under-valuation. I think that's mostly what happened to FIG.
I think they're in fund-raising mode now, so good news/progress on that front (as we've already seen in 2012) will be positive. Ultimately, continued execution, a final & increasing dividend, and (perhaps most of all) a rising share price will get more & more investors involved. I often joke most investors aren't brave enough to buy a stock until after it rises at least 50-100%... ;-)
Thanks, Don Ricardo! Yes, I'm probably being conservative on dividends - with $1.25 billion of net cash on hand, there's no reason Fortress couldn't pay out 100% of its annual net cash generation each year.
I wouldn't worry too much about Nomura, their current stake is 12% - perhaps it was 27% pre-IPO? An eventual divestment of this stake should be minimally disruptive if handled in a sensible fashion. In fact, a buyback (like with Kauffman) would be the obvious & best solution - Fortress could easily fund this size of a buyback also!
East & Sub-Saharan Africa Investing Blog [View instapost]
I've seen Ethiopia mentioned here a few times recently. Pittards (PTD:LN) can be considered a play on Ethiopia. Its market cap is admittedly small, but somewhat deceptive - as the company's annual turnover is nearly $60 mio.
I Love Dividend-Paying Stocks, But I Hate Dividends [View article]
Occasionally I even try to save a few junior resource stock investors...an even more thankless job!
I Love Dividend-Paying Stocks, But I Hate Dividends [View article]
Every day I think: I could have saved more....
I Love Dividend-Paying Stocks, But I Hate Dividends [View article]
Thks, I was feeling lonely out here all by myself..!
Yes, everything in moderation, but of course the most egregious serial/Ponzi issuers are exactly the stocks which suck in the most idiots - I watch in dread...
ps I also watch some of the Pimco CEFs with a similar dread - it's one thing for an 'investor' not to be able to read a cashflow statement, but there's no hope if they can't even understand paying a 40-50% premium is totally ludicrous.
Another Assault On Fortress [View article]
Another Assault On Fortress [View article]
Yeah, I was feeling pretty confident of my valuation scenario for Fortress. And v happy to wait around for it to unfold - meanwhile, I had the reassurance of FIG's dividend & financial strength.
But little did I imagine that FIG would actually end up being revalued so dramatically & so quickly..!
Another Assault On Fortress [View article]
Other US-listed stocks I own include $ASFI & $TRIB. And I recently bought Tetragon Financial (TFG:NA) - foreign-listed, but offers v interesting US credit exposure.
East & Sub-Saharan Africa Investing Blog [View instapost]
Believe this is an excellent book - if you search, I think 1/2 bloggers have commented on it/reviewed it.
Sure you can find it on Amazon (UK?) too.
East & Sub-Saharan Africa Investing Blog [View instapost]
Yes, I can personally recommend Advance Frontier Markets Fund (AFMF:LN). ;-)
It's probably the cheapest frontier markets fund out there - it's on a 9.5% discount to NAV (rallied sharply YTD - but I haven't seen anything more than a 15% discount in the past yr or two), and many of its underlying fund investments trade on significant discounts also. Not to forget frontier market valuations are also pretty cheap in relation to developed markets & to their estimated growth potential. AFMF is also the most diversified fund you can buy, both in terms of its own country allocations, and of the underlying fund allocations.
It's on my list of possible write-up stocks. It actually has a (dormant?) US ticker, but right now I just don't feel up to the aggravation of submitting a foreign stock article to SA editors... Sign up for email alerts at http://bit.ly/MVFfyk and you might see more abt AFMF & other similar opps. in due course.
Blackrock Frontiers IT (BRFI:LN) is the obvious competitor. It's not as cheap (5.8% discount, in line with its recent history) & somewhat less diversified (invests in stocks, not funds), but you get an active stock-picking approach & Blackrock's muscle behind it, so it's pretty attractive also.
Africa Opportunity Fund (AOF:LN) well worth a look also, on a 20.1% discount & looking set to rally for the new year. Which reminds me, the only US frontier markets fund that's impressed me is Market Vectors Africa ETF (AFK:US). The rest are pretty much rubbish - look at their portfolio allocations - not so diversified at best, downright misleading at worst!
There's one other v promising frontier markets fund I'm keeping an eye on - but it's a bit of unusual story, and clearly flying under the radar at the moment. I'll save it for a closer look first, and then possibly an interesting write-up.
Cheers,
Wexboy
Another Assault On Fortress [View article]
Another Assault On Fortress [View article]
Then there's equity compensation: Of course, that's ultimately a real expense - it just shows up as dilution of intrinsic value for other shareholders (i.e. an expanding share count). But it's not a cash expense up-front - and it usually vests over a number of years, is dependent on performance, may be dependent on the share price, and it lapses if an employee leaves. From my perspective, I generally expect that a firm's future AUM/intrinsic value potential will more than adequately absorb this future dilution potential. [Of course, that won't be the case if AUM/intrinsic value started to go into serious decline...but you're probably not going to be worrying abt the potential then anyway!] Therefore, I'm usually happy to exclude equity compensation as a current expense.
Take a look at FIG's cashflow statement instead, this confirms their underlying cash/earnings generating power - for the last three FYs, free cashflow (net cash from operations, less capex) has averaged $188.9 mio per year.
Another Assault On Fortress [View article]
Quite honestly, I'd invert - I avoided FIG for years because it was ridiculously over-valued - stocks like that eventually fall back to earth, and usually then endure a punishing period of under-valuation. I think that's mostly what happened to FIG.
I think they're in fund-raising mode now, so good news/progress on that front (as we've already seen in 2012) will be positive. Ultimately, continued execution, a final & increasing dividend, and (perhaps most of all) a rising share price will get more & more investors involved. I often joke most investors aren't brave enough to buy a stock until after it rises at least 50-100%... ;-)
Another Assault On Fortress [View article]
FBD Holdings Offers The Perfect Irish Exposure [View article]
Another Assault On Fortress [View article]
I wouldn't worry too much about Nomura, their current stake is 12% - perhaps it was 27% pre-IPO? An eventual divestment of this stake should be minimally disruptive if handled in a sensible fashion. In fact, a buyback (like with Kauffman) would be the obvious & best solution - Fortress could easily fund this size of a buyback also!