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ALF – you quoted on 24 March (in Tony Featherstone’s report), that ALF “trades at a 10% premium to its latest pre-tax net tangible assets, meaning investors are paying more for its assets than they’re worth on the market”. Where does one pick up this information when considering buying into this Fund? Also, Tony stated that “waiting to buy the well-run ALF on any narrowing of the gap between the share price and NTA makes sense”.
Going on the fact that the share price has slipped recently (5/4/2016), is there a reason, or is that gap narrowing and it is worth investing?
Thank you.
A: The manager of the Australian Leaders Fund (ASX Code: ALF) is a bit tardy in publishing their NTA (net tangible asset value) .
The NTA as at 31 March will probably be announced to the market on or around 15 April.
The last data we have to go by is the NTA as at 29 February of $1.33 per unit. On that day, investors were buying units on the ASX at a price of $1.48 – effectively an 11.2% premium to what they are actually worth ($1.33).
A month and a half later, we can “guesstimate” what ALF units are worth (since it is a fund with broad market exposure). Since 29 Feb, the S&P/ASX 200 has added 1.33%, probably closer to 2% with dividends. ALF has also gone ex a 5c dividend. So, my guess would be that as at the close last night, ALF was worth around $1.305 cents compared to an ASX closing price of $1.445 – still a premium around 10.7%.
Too expensive for me.
