KBC (sale), AIK, OGC.

KBC – It hurt a little selling the remainder half parcel at the 14 cent level of KBC at such a large discount to NTA but a lot has happened this year with this stock.

I should be careful what I write but sometimes it feels another episode of underbelly is being in the making with the goings on behind the scenes that you are not aware of. My concern now is down the track this is eventually seen like a stock like BEL which has often traded at discounts to NTA of 35-40% and has very high costs to run versus a small market cap. The WAM stake now doesn’t seem to offer much leverage, also wouldn’t rule out a related party to Bolton or Bentley may pay a premium to get that stake yet that would not help other shareholders at all. Here is just another snippet of news I read in the last week that later on in the story touches on Keybridge. Most of it regards the Responsible Entity at Aurora, also thought the article is of interest about the nature of the RE in general sometimes. With this episode, and looking at the RE for AGF & APW recently, perhaps we will start referring to their role as the IE soon?

nhttp://www.afr.com/business/banking-and-finance/financial-services/providence-urges-asic-to-probe-aurora–absolute-return-funds-bizarre-owner-20160906-gr9or7

As always when things don’t go well I feel a bit unlucky. When going into this I got comfort from Wilson Asset Management and a John Wiley associated group owning around a third of the company, even though “controversial investor” and “corporate personality” Nicholas Bolton was a major player on the register. Please inform me if I ever get described with such words as they always have a certain meaning, these are not my descriptions just taken from other articles! What I didn’t count on is John Wiley selling his stake to Bentley (he may not be on Geoff Wilson’s Christmas card list now). To make matters worse, the Bolton group voted the same way as Bentley in support of their push for board positions, even though supposedly according to the article though there is no real other connection between these two. That is somewhat amusing to read.

But before I had bought the shares I admit many had pointed at the Bolton stake as a reason to stay clear and I didn’t listen. To them I now say good call, and I got this wrong. What looked like a good call from me when WAM proposed a restructure and to manage a new LIC via KBC certainly went sour and I regret not selling them all at 18 cents or so at the time of that announcement. The only positive I can say was selling half my stake at 17.5 when Bentley was increasing their position so overall the damage was a 7.5% loss here.

Part of the blog’s purpose to learn from the dud calls rather than brag about winners. Note to self – careful of some of the names in this story in future, maybe I need to get tattoos of some of them to remind me better.

Now back to bragging about winners. 🙂

AIK – I recently mentioned I sold some AIK. I just wanted to make sure it is clear I am still quite bullish on this stock, probably even just as much as near the start of the year when I first mentioned them here at 10.5 cents. Now they are trading ex an entitlement to buy shares one for 5 held at 11 cents. The small partial sell was because this is the third raising I’ll be participating in so I don’t like raisings dictating my position size like this. Also I have recently a tad more indirect exposure via their significant shareholders in SNC & NCC as LICs. A strange thing with AIK is they get “independent” research to cover the stock and release it in the news announcements to help understand the unusual structure and potential of the company. Now I don’t quite see this as 100% “independent” but I thought I would show the latest link here as I still think it is worth a read for anyone who isn’t that familiar with this stock. So here it is.

http://www.armidaleinvestmentco.com.au/docs/Armidale%20Investment%20Corp%20FY%2016%20research%20update%20Sept%202016.pdf

OGC – Gold is looking a bit better as soon as I started pondering the possibility of my gold holdings getting stopped out. So the buying of GOLD ETF the other day for me might have been timely, although because of the USD weakening that ETF doesn’t do quite as well.

Today OGC made a positive announcement that an underground mine at Haile is viable together with the open pit mine plan there. Whilst everything is green for gold stocks today I think this announcement is giving comfort with the longer term production profile as their operations in the Philippines eventually past their peak contribution to earnings in the immediate few years. Also recently OGC has probably suffered from the Philippines exposure, with some concerns in regards to the new president having a bit of an anti-mining agenda, so more diversification away might assist. The strong market in gold shares over the last year or two seems to like any signs of increasing production so hopefully the strength in OGC can continue.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s