scroll

NGI Rights Issue

Advanced Search

Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.

Ask a question

The Latest Q&A

Question asked 16/12/2023

NGI Rights Issue

I guess we all have a bugbear share or two in our portfolios - mine is currently Navigator Global Investments Limited (NGI). We have held this share for some years in our income-orientated SMSF, and had good returns in the early years. Then in mid 2022 NGI announced a share placement to part fund an investment in Invictus Capital Partners, with a reduction in the dividend payout range to also help fund the acquisition. Should have seen that our investment thesis had fundamentally changed - the share price marched downwards and the dividend yield hasn't recovered. We now have a significant unrealised capital loss, and NGI have now come back to the well with a Rights Issue to fund another acquisition. It looks to me that if we don't partake our shares will be diluted circa 10%. Does MM have any general thoughts on the merits of the current Rights Issue or NGI's future prospects? I have come to view MM's publications as a very welcome BS-free source of information amid the tumult of market 'noise', most of which is self-serving - keep up the good work.

Answer

Hi Karl,

Your interpretation of MM put a smile on my face: I have come to view MM’s publications as a very welcome BS-free source of information amid the tumult of market ‘noise’, most of which is self-serving. That is exactly what we want it to be!

We did own Navigator a number of years ago (was called HFA Holdings at the time) in the Income Portfolio but sold out. We haven’t really kept across the stock that well since then. It’s a $277m market cap fund manager and their attempt to scale up the business has proved a challenge. On 6x it’s cheap, but like MFG and others, fund flows are very important, and we’re not across this for NGI. It actually looks interesting as it plumbs the lows for a few years, and if markets sustainably improve, then small caps will follow and small caps such as NGI heavily exposed to financial markets while particularly benefit.

To MM, it seems the horse has bolted on this one, and we’d be more on the positive side at such depressed levels.

chart

Navigator Global (NGI)

LAST UPDATED 16/12/2023 08:07

Latest Reports

Afternoon report 17/04/2025

The Match Out: ASX strong as energy bounces back, commodity stocks impress on quarterlies

A bullish session after a decent hit to U.S markets overnight, particularly the tech sector which was -3.9% weaker amid further U.S tariff and policy intervention. It was a slow and steady move up over the day, opening flat but climbing ~5-10 points hour after hour.

Morning report 17/04/2025

What Matters Today: Did MM turn neutral towards Gold too early?

The ASX 200 performed well on Wednesday, considering US NASDAQ Futures were down over 2% by 4pm AEST, courtesy of poor news from both sides of the Atlantic before the respective bourses even opened. Global Tech stocks sank on a one-two of bad news for tech goliaths Nvidia and ASML, the last thing the embattled semiconductor sector needed.