Efficiency at Sprott -does anyone really care!!! Very few ..reads here at the Sprott bull board !!!
I made some general statements about fees and expenses at Sii. I wish to use Sii as a learning experience for myself and all investors to help us on this journey we are on to investment success.
My reference is page 30 of Sprott 2016 annual report.( No report out yet for 2017)
Revenue for 2016 $167,187,000
Expenses for 2016 $129,344,000. Yes, expenses are 77.36% of revenue !!!!!!
Therefore every dollar received leaves .2263 cents of income before taxes ( there was a loss of .13$ per share in 2016 ) !! Compensation and stock based compensation is $55,561,000 by itself. This is an equity that has no debt (no interest expense to speak of ) and had net cash on hand of $123,561,000 ( which was 27.95% of the shareholder equity). This is all for year-end 2016.
Yes, we paid out $55 million in compensation to help manage $123 million in cash- great deal!!!
Can this be interpreted as a 32.9% management fee ( $55 million divided by $167 million- total revenue)??
Is this a great allocation of resources to have expenses that are 77% of revenues while you wait for the gold /silver and natural resource sector to realize it's true value and still have a loss !!
It is a great deal for management to feast on fees ,salaries , bonuses and stock compensations!!
Sign me up with this holding company that disguises itself as an asset manager but as of 2016 could not allocate the $123 million in net cash but promptly collected inflated compensations.
See page 30 for "consolidated statements of operation"
Remember Sii is now generally an ETF asset operator in the resources sector.
Please let me know if I am wrong !! I wish to learn from this experience of investing alongside a prominent investor only to realize that it is all about fees , salaries and bonuses(?) to management and no performance except for a decent dividend paid from net cash --not earnings. 2016 resulted in a loss of $29,878,000.
Yes, $55million in compensation to produce a loss of $29,878,000. See page 31 , 2016 annual report.
As I write this I am becoming more agitated so therefore I will stop . Frustration. I am glad to rid this from my portfolio but I may look at it again when it approaches the two dollar range only as a trading equity!!
Again , I offer this as a learning experience to help us all in our journey toward investment success.
Tedz