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Is the Blue Sky Alternative Investments Limited share price a buy?

The Blue Sky Alternative Investments Limited (ASX: BLA) share price is up by 0.71% today to $5.65 at the time of writing. It is down by more than 50% over the past month. However, that doesn’t seem to have put off the CEO from believing it’s worth buying some shares.

According to an Appendix 3Y released by the company this morning it was revealed that Robert Shand, the CEO, decided to acquire 20,000 Blue Sky shares for $98,600 today.

Although I’m sure this doesn’t represent a big portion of his wealth I think it is telling that he has put more of his money into the company’s shares at today’s price.

My colleague, Sean O’Neill, has done an excellent analysis piece on the latest goings on with the Blue Sky debacle. Perhaps the share price had gotten far ahead of itself, but if there isn’t a large flight of capital away from Blue Sky’s funds then today’s price could actually be very tempting.

Blue Sky had around $2.20 in net tangible assets per share in its half-year report a few months ago and its listed investment company (LIC) vehicle, Blue Sky Alternatives Access Fund Ltd (ASX: BAF), reported that it had $240.54 million of assets under value in its February 2018 monthly review. So even under a worst-case scenario, Blue Sky (the manager) has a value per share and it will have assets to manage thanks to the LIC.

Is it a buy?

You would have to be a brave investor to push the buy button on Blue Sky shares today, but it could also be a good value buy if it gets through this period. What if Glaucus is indeed wrong? Blue Sky could allay fears better than it has done, but it could indeed have the large funds under management it says it does.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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