Ann: Ceasing to be a substantial holder from FOR, page-7

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07/06/22

16:17

Post #: 61872201
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Originally posted by madamswer: ↑

"Director selling at ostensibly low prices, and now FOR paring back their stake (possibly exiting completely too). Not a great look from informed investors."

@thunderhead,

Remember that all of MSL's directors were buying shares as recently as April, and Mr Eddings has sold only 11% of his shareholdings. So I think it's a bit of a nothing burger.
Besides, if he "knows" something and he's selling based on what he knows that the rest of us don't know, then he's tempting a few years of a prison food diet.

As for FOR's motives for reducing their position in the stock, given the fund's decidedly poor performance over the past year (1-Year ALPHA = negative 17.6%), I suspect quite strongly that the they have received end-of-financial year redemption notifications from their clients:

View attachment 4419052

I've gone back and reconciled some of their fund balances with performance figures and it appears by my rough calculations that there had already been net redemptions of a few million dollars in February, March and April (for context, the fund balance @ end of April was $177m)...the May report is not out yet.

Prior to reducing from substantial in MSL, they would have had around 23m MSL shares, which at average prices over the past few weeks, would have amounted to around 2.5% of their portfolio... possibly more depending on how the fund performed in May and the extent of the redemptions. And that's probably too large a position from a fund liquidity standpoint.

So my view is that the odds are that they have been selling for reasons to do with portfolio construction, rather than for any changed view of the fundamentals of the business.

After all, the company provided an update just the other day which pointed to a business that is performing very well.

So I don't get too stressed about this kind of stuff.

.

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FOR is a closed listed LIT, so there are no client redemptions. Interestingly, the market price for FOR is the closest it has been to NTA for a long time. I see the gap between price and NTA representing ‘trapped redemptions’.

MSL Price at posting: 15.5¢ Sentiment: None Disclosure: Not Held
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Ann: Ceasing to be a substantial holder from FOR, page-7

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