Zamano – Time For A Dividend & Your Support…

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dividend coverage, dividend payout ratio, dividend yield, Irish value investing, John Rockett, Pageant Holdings, Ross Conlon, shareholder activism, shareholder value, Zamano, ZMNO

Here’s a recent letter I sent the board of Zamano plc (ZMNO:ID, ZMNO:LN) – it proposes the company now commence paying an annual dividend. I’m also now actively seeking the support of my fellow shareholders:

‘27-Feb-2016

FAO:   John Rockett, Chairman
            Ross Conlon, CEO

Cc:      Pat Landy, NED
____- Colin Tucker, NED
______Fergal Scully, NED

zamano plc
3rd Floor
Hospitality House
16-20 South Cumberland St
Dublin 2

Gentlemen,

Pursuant to my last Zamano post, I want to thank Ross for responding to the shareholders who contacted the company regarding my annual dividend proposal. A number of shareholders have also contacted me directly to confirm their support – I now speak for 13.1% of Zamano’s outstanding shares. Noting this support & the upcoming Mar-10th release of Zamano’s final results, this is a good opportunity to write to you more formally & reiterate my dividend proposal:

– Zamano’s been profitable for the past four years now. Since 2011, the company’s revenue has increased by 55% to a €23.3 million annual run-rate, annual EBITDA has averaged €2.6 million, while annual free cash flow has averaged €2.5 million (for FYs 2012-14). This has now resulted in net cash of €5.4 million on the balance sheet, versus €4.4 million of net debt in 2011, a near-€10 million swing in the company’s financial position.

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2012 – Aaah, How Was It For You..?

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alternative assets, Argentina, Argo Group, Avangardco, Baker's Dozen, diversification, dividend yield, EIIB, frontier markets, hedge funds, home bias investing, Irish shares, JPMorgan Russian Securities, NAV discount, Petroneft Resources, portfolio allocation, portfolio performance, Renaissance Russia Infrastructure Equities, Richland Resources, Russia, Sirius Real Estate

[Here’s my last performance report, for reference].

OK, just in time, my performance analysis got a bit more sophisticated. It now includes dividends, and is calculated on a weighted average gain basis, so now the impact of larger & smaller portfolio stakes is recognized. I think I’ve tracked any increase/decrease in portfolio holdings pretty well during the year, via Twitter (so plse sign up as a follower!) & blog comments. [No point in having interested readers if I don’t post such relevant info on a timely basis]. This allowed me to calculate an average portfolio stake for each holding, which I think is the best metric to use.

I did, however, stick with my original yr-end 2011 or 2012 write-up prices as a cost base – I didn’t want to drive myself crazy calculating average net purchase prices! However, I know I’ve subsequently added to portfolio holdings at higher & lower prices, so I think that pretty much cancels itself out. It also means I’ve omitted partial profits harvested on certain holdings, so my total return may be marginally understated.

Overall, eyeballing my respective analyses, dividends & portfolio weightings have in total (on a pretty even split) added about 2-3% to my annual return. The pretty low contribution from dividends may surprise you, but don’t forget I’m none too enamoured with them… See here, here & here. As far as I’m concerned, if you’re impressed enough with a stock’s valuation & prospects to actually buy it, surely you’d prefer to see it compound its earnings?! Only a third of my holdings pay a dividend.

German Residential Property (Part III)

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absolute return, Austria, dividend yield, financial crisis, financial derivatives, German bunds, German property, Germany, home ownership, income/dividend bubble, intrinsic value, land grab, Leverage, Margin of Safety, Mr. Market, NAV discount, Net LTV, Price/Book, REIT/MLP sector, relative value, rental yield, residential property, safe-havens, special situations

Continued from here.

OK, now we’ve looked at German residential property fundamentals. The current supply/demand & home ownership rate, rental yields, safe-haven status, and particularly the low valuations, certainly appear to offer a persuasive investment case. So, how do we exploit it?!

As I’ve said, I’m perplexed by the general investor obsession over direct property investment. What a hassle! And let’s correct a key misconception: People say they prefer direct investment as they can leverage it up – something you can’t, or shouldn’t, do with an equity investment! Yeah, sounds logical…but it’s complete rubbish! That coveted (?!) leverage is already embedded in listed companies (and far more efficiently/cheaply than you could obtain).

Let’s say you’ve a spare 300 K knockin’ around. You could buy a 1 mio property, with the help of a 70% mortgage (and years/decades of property/tenant headaches to come!). Or you could invest in the equity of a listed property company that owns 1 mio of property (with the same 70% leverage). All at the click of a button & an occasional read of their financial reports. What an easy choice… OK, but who knows where the hell the share price might trade?!

Chasing Some Dividend Tail (III)..?

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Autozone, Bernie Madoff, Big Ang, Character Group, dividend coverage, dividend yield, enhanced EPS/NAV, gold, income/dividend bubble, investment companies, JAKKS Pacific, Liquidations, Livermore Investments, M&A, share buyback, tender offer, trading sardines, wind-down

Continued from here. OK, so dividends kinda suck…but what’s the alternative? Well, let’s tackle that from the corporate perspective first:

– Obviously, share buybacks (and/or tenders & capital returns) are generally a far more tax-efficient means of distribution to shareholders. They enhance earnings, or significantly increase NAV/book value. [Just look at the amazing run on Autozone (AZO:US) – yes, they’ve had great execution, but much of its performance is down to aggressive/sustained stock buybacks]. It also permits management to be far smarter & more opportunistic in their distributions, and their response to share price volatility.

– Just as important, it frees management of the potentially absurd strait-jacket of maintaining an inappropriate dividend – which, in extremis, leads to management idiotically borrowing just to fund a (tax-inefficient) dividend. On occasion, this is exactly the point where management tips over from ‘gently deceiving‘ shareholders into downright criminal/accounting fraud…

Chasing Some Dividend Tail (II)..?

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Avon Products, dividend coverage, dividend snorting, dividend yield, income/dividend bubble, Ponzi, REIT/MLP sector, Supervalu Inc., tax-free compounding

Continued from here.

OK, so what’s wrong with a focus on income/dividends?

– Erm, everything..? I wrote about this recently – a focus on a single investment attribute’s always dangerous, but dividend yield certainly seems the v worst of the bunch to me. Sure, it all starts out innocently enough… You have a little toke on a 4% yield occasionally – feels good! But all too soon, it’s not enough – you end up calling your broker every single day, snorting up 6% yields left and right. But it’s OK, it’s low risk, you still know what you’re doing – not like those other losers… So how come I came across you the other day, twitching on a park bench, scanning the dividend column in the FT, muttering ‘All I need is just one more 9 per-center…‘?

– A ‘good‘ dividend yield can’t save a bad share. I wonder how much money’s been lost by people saying ‘…but hey, it’s got a great dividend…‘? All higher yields mostly seem to offer in a portfolio is a gradual migration into mature and/or declining businesses. And what does that offer in terms of upside?! Even worse, it leaves nowhere to hide when the dividend’s compromised – your income drops, and the share price crashes…

Chasing Some Dividend Tail (I)..?

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AIM stocks, dividend coverage, dividend yield, Expecting Value, income/dividend bubble, pitch books, REIT/MLP sector, Richard Beddard, Stockopedia, survivorship bias, tax, tax-free compounding, The Reformed Broker, UK Value Investor

There’s been a lot of good dividend commentary & debate in the UK blogosphere recently. Stockopedia seems to have ignited the debate:

http://www.stockopedia.co.uk/content/the-dividend-puzzle-or-why-the-dividend-emperor-may-have-no-clothes-66275/

Expecting Value & UK Value Investor chimed in with these:

http://expectingvalue.com/aroundtheweb/friday-reading-29#more-2326

http://www.ukvalueinvestor.com/2012/06/how-to-find-the-best-high-yield-shares.html

TGISVP – What’s Interesting, What’s Not..?

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Bank of Ireland, bubbles, dividend yield, DYOR, intrinsic value, ISEQ, natural resource stocks, Ovoca Gold, Permanent TSB, Petroneft Resources, Ponzi, portfolio allocation, portfolio performance, Prime Active Capital, REIT/MLP sector, stock screener, TGISVP, Total Produce

In my last post, I was pleased to see TGISVP continue to deliver significant out-performance vs. the ISEQ benchmark. Early days yet: This could be blind luck, but hopefully it’s derived from a robust analytical process that clearly identifies over/under-valued shares. Which naturally demands a bit of a refresh…

I haven’t actually felt compelled to perform any Irish share revaluations since my TGISVP X post, even for stocks I hold. Personally, I’m pleased with this – I’m v comfortable with my Irish holdings, I believe my valuations are robust, and there’s been no unexpected news-flow. In light of my current Irish portfolio allocation (16%), and actual stocks I hold, I’d be reluctant to add another Irish share. This doesn’t mean forgetting the rest, of course! It does mean I can just watch out for interesting price drops, rather than agonize over constantly refreshing valuations.

Hitting The Century (III)

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Argo Group, Avangardco, dividend coverage, dividend yield, EIIB, Ex-Cash Ratios, FBD Holdings, Net LTV, P/E ratio, Petroneft Resources, portfolio allocation, portfolio performance, Price/Book, Price/Sales, TGISVP, Total Produce, Trinity Biotech, Wordpress

Damn WordPress! If you viewed/received a similar Century (Part III) post (since deleted), please ignore it – it was just a draft & I’ve updated/revised figures across the board since. Not quite sure how WordPress managed to publish it for me..!

Right, continued from here. In my last post I promised: ‘OK, next I’ll take you through each of my investment allocations – and try to give a flavour of my thinking, and some underlying stocks/funds, in each instance‘. However, I’ve just completed a detailed quarter-end portfolio update/review, so let’s flip things ’round – perhaps you’d be interested in a timely look at some portfolio metrics¹, and we’ll return to investment allocations in my next post?

Yes, really? So you like the pretty panties, but you still want to know the damn cost..?! Sigh, value investors..! OK:

Seduction…and Neglect?! How About a Catalyst? (Part II)

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dividend coverage, dividend yield, Event Driven, Expected Value, Interior Services Group, IRR, Joe Lewis, Leo Fund Managers, Magnier & McManus, Margin of Safety, Risk Arbitrage, Timeweave

Continued from here:     OK, so we’ve defined what a stock catalyst is, and also recommended you evaluate catalysts from an IRR perspective.  This is the best way to highlight how they can deliver a dramatically improved return, due to the (potential) acceleration of value realization.

If you really want to complicate your life, you could also layer in an EV approach…the analysis that is, not the blog! Let’s not dig into the math/mechanics here, but it spotlights another attractive feature: A catalyst may prompt you to attach higher probabilities to positive/specific/increased return scenario(s), thereby increasing the Expected Value of your investment return. For example, Risk Arb (and many Event Driven) opportunities offer a specific price ‘target’ and timeline, with a high probability attached to this outcome, so EVs (and, of course, IRRs) can be pretty tasty!