Happy weekend everyone. @anthonym01 - Short Selling, TGR is at...

Happy weekend everyone.

@anthonym01 - Short Selling, TGR is at 8%. Check out the link here for source data: https://asic.gov.au/regulatory-resources/markets/short-selling/short-position-reports-table/
But it's easier to digest here: https://www.61financial.com.au/en-au/info/shorting

@TerritoryTrader - I think the reason of unfranked dividends is essentially the depreciation of assets has run out? I am not really sure on this, but over time, capital intensive industries or REITS/AMITs like Transurban/RFF typically reduce their level of franking. The ruling from ATO is that some profits are tax exempt (e.g. depreciation), but I don't know enough of how that actually works - if anyone can shed more light, that'd be appreciated. I find this was a useful resources:
https://www.chan-naylor.com.au/advantages-unfranked-dividends/

@desertredlion @bug1 - I personally have absolutely zero idea of what the price of Tassal's will be today, tomorrow, next week, or even next year. I think of myself as an investor not a trader (I failed miserably when I tried to do that a few times). Some of the few edges that us retail investors have is focusing on our circles of competence, and thinking longer than traditional fund managers can. And the investment in Tassal's for me is really a bet on future free cash flows (FCFs) at what seems ridiculously cheap prices. My long term thesis essentially is that with diversification in to higher margin/lower CAPEX prawns and growing salmon efficiency, we should see 2xRevenue, 3xEBITDA and 4xFCF's between now and 2030.

What ever happens come August 18th when the annual report comes out, as long as it is confirming the long term thesis I'll be happy. If everything falls exactly right for Tassal, it could be a phenomenal 2H21 - salmon margins improving, prawn volumes improving, prawn margins improving, capex reducing, and inventories reducing are all possible. But if anything gets missed, like prawn margins or inventories - it's really not that substantial in the big scheme of things. The risk to the long term is poor capital allocation (like buying De Costi again!), and right now I'm not seeing anything that points towards poor capital allocation - rather the management of the prawn land has been fantastic value creation.

For those on twitter, I posted recently under my other handle @DownunderValue a primer on aquaculture on the ASX. Here is some interesting and up-to-date analysis of companies. First, the total sector is worth around $1.7bn market cap.

There are some ridiculous asymmetries between market cap and revenue, my favourite being Murray Cod that had a $300m MC in May 2021 on $4m of revenue.

But when it comes to actual operating earnings, there's a clear winner in Tassal. My personal favourite is Seafarms that has Project Sea Dragon's prawns, which loses money for every prawn they make (note it is negative 6%). And this is *PEAK* EBITDA - because Covid impacted some companies more than others, I chose the best EBITDA a company had ever reported as the benchmark (for Tassal, despite everything it was FY21, while for NZ King Salmon it's FY18 way before Covid). If you just look at FY21, Tassal is 66%.

Enjoy the weekend.