LRF - LinQ Resources Fund

dubiousinfo · 2 August 2006

I have been looking at LRF Linq Resourses Fund. It's an investment trust that invests in small to medium resourse stocks. SP is currently at $0.84 with NTA of $1.19

Seems to have investments in some very good prospects. Most seem to be either producing or very close to producing.

In addition they still have $46m in cash & have just declared a dividend of 7c per share.

At face value it would seem a way to get exposure to a variety of resourse juniors at a significant discount with a good chance of SP increasing to reflect the current value of the investments plus any increase in the SP of the stocks held.

Any thoughts?
What am I missing here?

Announcements

http://www.asx.com.au/asx/statistic...ssuerCode=lrf&timeFrameSearchType=Y&year=2006

Website

http://www.linqresourses.com

Alien · 3 August 2006

Re: LRF - Linq Resourses

They have $25.7m of unrealised ganis on their books. So there NTA after tax is somewhere around $1.145. Still a reasonable discount to there share price but they also have a heavy weighting invested in CopperCo of $27.6m (16.4%).

Add some involvment in mezzanine finance activities and a heavy investment in resource stocks at a high cyclic peak then i can see the reason for the discount.

They may do well if the resources bull continues. Prefering a more conservative diversified approach for a LIC there are too many risks at this stage for me to buy in.

My opinion only. Please use your own research before making a decision to invest or not.

dubiousinfo · 5 August 2006

Re: LRF - Linq Resourses

Alien said:
They have $25.7m of unrealised ganis on their books. So there NTA after tax is somewhere around $1.145. Still a reasonable discount to there share price but they also have a heavy weighting invested in CopperCo of $27.6m (16.4%).

I think you misunderstand re tax. This is a trust, so under present legislation it is not liable to pay tax so long as it distributes all taxable income to the unitholders each year, which it has done & will continue to do. As for CopperCo, I personally dont see that as a negative and 40% of it is a covertable note.

Add some involvment in mezzanine finance activities and a heavy investment in resource stocks at a high cyclic peak then i can see the reason for the discount.

They are completly invested in resource stocks. That is the appeal for me. I am looking to invest in small resource stocks & see this as a way of diversifying a small investment over a large number of stocks. Plus the stocks come at a discount to the current price I would pay if I invested in them directly. As to the high cyclic peak, I personally think resources still have some way to go & am happy to put the speculative part of my portfolio into them.

They may do well if the resources bull continues. Prefering a more conservative diversified approach for a LIC there are too many risks at this stage for me to buy in.

This is not a low risk LIC investing in blue chips. This is for people who are already wanting to invest in resource stocks because they believe resources still have further to run. There are other LIC's for the conservative part of a portfolio. This is for the speculative part.

I still think this might be worth a spec buy, but would appreciate any other comments.

dubiousinfo · 11 August 2006

Re: LRF - Linq Resourses

The sellers seem to be disappearing. Sell side is very light ??

dubiousinfo · 28 August 2006

Re: LRF - Linq Resourses

This is finding some support today.
It has holdings in AGS, AVO & JML all of which have moved strongly over the last 2 weeks.

Portfolio · 6 September 2006

Re: LRF - Linq Resourses

The NTA is also further diluted by the fact that there is 1 option for every share.......provided the SP makes it to the strike price by Jan 07.

dubiousinfo · 13 September 2006

Re: LRF - Linq Resourses

NTA & SP have been increasing, NTA up 10% since June 30

NTA
30/6 $1.20
31/7 $1.29
31/8 $1.32

I now hold some of this. Jumped in & grabbed some 2 weeks ago.

Portfolio · 14 September 2006

Re: LRF - Linq Resourses

I have had a good look at this stock as well.

I think the options are the best way to play this stock as they are trading at a big discount to fair value as they are exchange traded options (LRFO).

I dont think the discount to NTA will close up unless there is a spike in commodities over the next few months but if this happens there might be a double effect of rising NTA and closing discount. Under this scenario $1.20-$1.30 isnt out of the question making a 1000% return on the options.

NettAssets · 14 September 2006

Re: LRF - Linq Resourses

Portfolio said:
I have had a good look at this stock as well.

I think the options are the best way to play this stock as they are trading at a big discount to fair value as they are exchange traded options (LRFO).

.

These are not exchange traded options.
They are traded on the exchange - but as equities not as ETO's.
As over the counter options they do not have some of the safeguards that ETO's have.
They also have an excise price payable prior to expirey to convert them to shares that call ETO's don't have.
I am neither promoting or deriding the worth of buying them. Just correcting an error in terminology.
John

Portfolio · 14 September 2006

Re: LRF - Linq Resourses

How would this impact the price? Would ETO's be worth more?

NettAssets · 14 September 2006

Re: LRF - Linq Resourses

Portfolio said:
How would this impact the price? Would ETO's be worth more?

I was talking to WayneL about this a while back. I think the consensus was you should be able to use the same pricing model for a call ETO or a OTCO. the main difference is that with the OTC some of the value is payed on expirey so you haven't got that cost of carry during the life of the option.
The execise price is basically the same in both options. They may react a little differently right at expirey and right at the money seeing as (as I understand it) there is usually no brokerage cost to exercise the OTC.
The liquidity will be rather different I would think as the ETO is basically a trading instrument and has the opposite put to form complex trades. while the OTCO is used more as a leverage into an investment position.

John
My opinion only with no references.
I will be interested in others take on this

yogi-in-oz · 10 October 2006

Re: LRF - Linq Resourses

Hi folks,

LRF ... has been very strong, but will be looking
for highs, around:

23102006 ..... minor intraday cycle

30102006 ..... 2 significant and negative cycles here ...
... finance-related ???

02-03112006 ..... significant and negative cycle.

22112006 ..... minor

29112006 ..... minor

12122006 ..... minor

15-18122006 ..... minor and positive

22-28122006 ..... 2 positive cycles here

02012007 ..... minor and positive news???

09012007 ..... significant and negative - finances???

Shooting for highs, around 1.49 ... ???

happy days

yogi

=====

dubiousinfo · 11 December 2006

Re: LRF - Linq Resourses

NTA for this was $1.51 as at 30/11/06 with a SP of $1.06 today.
Has 130m $1.00 options which expire on 19/1/07 (currently trading at 3.2c). Announced last month that it was buying back 13m of its shares, has bought 4m so far, 9m to go (that's one way to get the SP up so options are converted).
If all the options are converted NTA will be $1.26.
I currently hold shares for longer term but have traded in & out of the opies over the last few weeks for some good results and grabbed a few more today.

adobee · 17 January 2008

Re: LRF - Linq Resourses

I have become interested in Linq today following there change in substanial share holders notice on AGO Atlas as they seem to have sold $12million shares right on time on the 14th at $2 and can now get them back at $1.84 if they want to.. This change in share holding notice is where I have first seen them.. Looking at the web site they seem to be in alot of the companies which I too am interested in - exploring or near production ..
I am thinking it may not be a bad buy they are in the right stocks for me and have alot more time and information on hand to make good decisions..

Have people had positive or negative feelings in relation to managament.. ?

adobee · 23 January 2008

Re: LRF - Linq Resourses

Okay well I am in LRF now.. I am taking an uneducated punt. I like that it looks as though they sold out of alot of positions just before the crash and with the cash on hand I am hoping that they have been able to clean up.

adobee · 13 February 2008

Re: LRF - Linq Resourses

LinQ Resources Fund announces 142 per cent increase in unaudited net profit to $116.89 million for the half year ended 31 December 2007•

Unaudited Net Profit attributable to unit holders more than doubles to $116.89m from $48.2million

• Earnings per unit increased by 43 per cent, despite the exercise of 83%of the options in January 2007
• Outlook positive for the resources market
• Net asset value of $476.9m at 31 December 2007

adobee · 2 May 2008

Re: LRF - Linq Resourses

I am not holding this currently .. but thinking it could be looking cheap as they are down substanially however hold almost 10% stake of AGO which is up 30% in last three days or 80% + since in the last two months...

imajica · 2 May 2008

Re: LRF - Linq Resourses

I agree that now is a good time to get Into LRF!

Their stake in AGO is looking very healthy at the moment and their profits just keep on growing!

Also the outstanding dividend yield doesn't hurt either. The guys who run the fund are ex-rothschild resource fund managers - they know what they're doing.

adobee · 5 May 2008

Re: LRF - Linq Resourses

Well I have jumped on some LRF this morning as the AGO increases have to be having a positive affect on their share price and earnings.. (I would think)

imajica · 5 May 2008

Re: LRF - Linq Resourses

the current value of their stock in AGO is:

18,428,851 shares x $3.70

= $68,186,748

This will influence the NTA result considerably! The NTA is usually posted after hours on Monday! great news for LRF holders

LRF - LinQ Resources Fund

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