Author Topic: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?  (Read 151058 times)

petec

  • Hero Member
  • *****
  • Posts: 1820
Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #600 on: July 17, 2019, 08:57:37 AM »
Straw poll, where does the common bottom as convert holders panic sell? At 84 today I am tempted to think that process has started, but not ended.


sculpin

  • Hero Member
  • *****
  • Posts: 776
Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #601 on: July 17, 2019, 10:21:15 AM »
Straw poll, where does the common bottom as convert holders panic sell? At 84 today I am tempted to think that process has started, but not ended.

No idea but if Goodman would actually get rid of Blue Goose and a few other non cores and stop throwing money down the spec junior mining hole, Dumbdee could likely buy back the 40 million shares they issued to redeem the prefs below a $1. If nano cap dogs Reitman's & Input can make it happen, why not DC?

Reitmans (Canada) Ltd. intends to make a substantial issuer bid pursuant to which the company will offer to repurchase for cancellation up to 15 million of its outstanding Class A non-voting shares at a purchase price of $3 per share from holders of such shares in Canada. If the offer is fully subscribed, the shares purchased would represent approximately 30.1 per cent of the total shares issued and outstanding at June 17, 2019, with 49,890,266 shares currently issued and outstanding.



Input Capital Corp. has released the final results of its modified Dutch auction substantial issuer bid to purchase for cancellation up to $15-million of its outstanding common shares from shareholders for cash. Based on the final count by TSX Trust Company, as depositary for the offer, the company has taken up and paid for 16,088,083 shares at a price of 82 cents per share, for an aggregate purchase price of approximately $13,192,228 excluding fees and expenses relating to the offer. The shares purchased for cancellation under the offer represent approximately 20 per cent of the shares issued and outstanding before giving effect to the offer. After giving effect to the offer, approximately 65,933,877 shares are issued and outstanding.
« Last Edit: July 17, 2019, 10:26:09 AM by sculpin »

Edward

  • Full Member
  • ***
  • Posts: 156
  • Investment Manager - vmchcorp.com
    • VMCH Corporation
Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #602 on: July 17, 2019, 10:34:23 AM »
A bit late to this party (maybe a good thing?)

After digging in a little bit I believe the only "real" assets this company has is 40M in cash and 160M in Dundee Precious Metals stock. This 200M minus 120M in remaining preferreds is 80M, about the same as the current Market Cap. How is this undervalued?

Yes, I know there is some royalty from some oil in Chad and a pile of money losing subsidiaries. To me, all of this is Zero.

Prove me wrong, please.

sculpin

  • Hero Member
  • *****
  • Posts: 776
Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #603 on: July 17, 2019, 10:52:00 AM »
A bit late to this party (maybe a good thing?)

After digging in a little bit I believe the only "real" assets this company has is 40M in cash and 160M in Dundee Precious Metals stock. This 200M minus 120M in remaining preferreds is 80M, about the same as the current Market Cap. How is this undervalued?

Yes, I know there is some royalty from some oil in Chad and a pile of money losing subsidiaries. To me, all of this is Zero.

Prove me wrong, please.

Great to be late! Buy at $0.80 and get all the worthless stuff for free. And maybe they will buy back the preferred at a big discount to the $120mm some day. Optionality...

Couple of decent value investors...

Roumell....

Factoring in the additional common shares and the elimination of the preferred stock
liability, we estimate that the reported NAV will approximate $4.58. The shares currently
trade at only $1.15 giving us an attractive 75% discount to reported NAV. Even under
our most conservative scenario assumption, where we take certain significant haircuts
to Management’s valuations and factor in future cash expenses, we believe the shares
trade at about a 50% discount to NAV.


Ravensource....

Free of emotional baggage carried by existing investors, we worked to determine whether there
was opportunity within the chaos. With Dundee’s portfolio of ~100 names, we first performed
triage to cull the smaller and speculative investments and focused our analytical rigour on the
remaining few with tangible and obvious value. Our analysis concluded Dundee’s assets were
worth in excess of the face value and 3x the market value of its preferred shares. We were also
attracted to the preferred shares’ 12% dividend yield, equivalent to 15.7% interest on a bond
factoring in the tax advantages of dividends. In the third quarter of 2018 we began buying the Series
2 & 3 preferred shares, based on a large margin of safety, healthy yield and potential catalysts for
meaningful capital appreciation.

Edward

  • Full Member
  • ***
  • Posts: 156
  • Investment Manager - vmchcorp.com
    • VMCH Corporation
Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #604 on: July 17, 2019, 11:04:31 AM »
I would think more than 12% dividend on the preferred would be required fr this kind of mess. 15-20% perhaps, just to get me off my chair.

bizaro86

  • Hero Member
  • *****
  • Posts: 1051
Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #605 on: July 17, 2019, 10:31:39 PM »
A bit late to this party (maybe a good thing?)

After digging in a little bit I believe the only "real" assets this company has is 40M in cash and 160M in Dundee Precious Metals stock. This 200M minus 120M in remaining preferreds is 80M, about the same as the current Market Cap. How is this undervalued?

Yes, I know there is some royalty from some oil in Chad and a pile of money losing subsidiaries. To me, all of this is Zero.

Prove me wrong, please.

Great to be late! Buy at $0.80 and get all the worthless stuff for free. And maybe they will buy back the preferred at a big discount to the $120mm some day. Optionality...

Couple of decent value investors...

Roumell....

Factoring in the additional common shares and the elimination of the preferred stock
liability, we estimate that the reported NAV will approximate $4.58. The shares currently
trade at only $1.15 giving us an attractive 75% discount to reported NAV. Even under
our most conservative scenario assumption, where we take certain significant haircuts
to Management’s valuations and factor in future cash expenses, we believe the shares
trade at about a 50% discount to NAV.


Ravensource....

Free of emotional baggage carried by existing investors, we worked to determine whether there
was opportunity within the chaos. With Dundee’s portfolio of ~100 names, we first performed
triage to cull the smaller and speculative investments and focused our analytical rigour on the
remaining few with tangible and obvious value. Our analysis concluded Dundee’s assets were
worth in excess of the face value and 3x the market value of its preferred shares. We were also
attracted to the preferred shares’ 12% dividend yield, equivalent to 15.7% interest on a bond
factoring in the tax advantages of dividends. In the third quarter of 2018 we began buying the Series
2 & 3 preferred shares, based on a large margin of safety, healthy yield and potential catalysts for
meaningful capital appreciation.


Regarding optionality - there is certainly optionality here, and I agree that cash + DPM - liabilities/prefs is a pretty hard value.

However, that optionality is absolutely not free, even if it has no upfront cost. Dundee is burning cash pretty quickly with spending on G&A, prefs, and making new goofy investments. So there is a true "option premium" being paid for the potential that Chad or something else comes in, in the form of cash burn until that happens.

Realistically, I can't imagine anyone thinks this is a quality business/compounder, and I think most would agree that absent a big hit (Chad is a go!) that whatever your number for NAV is it will probably be lower in a year from now. Definite melting ice cube.

I'm not saying it can't go up, and I chickened out and closed my short to take a very nice short term profit, so I have no position here.

sculpin

  • Hero Member
  • *****
  • Posts: 776
Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #606 on: August 12, 2019, 09:10:19 AM »
Dundee holding in Dundee Precious Metals now worth $191 million or $1.91 per share with DPM at $5.25 today. As well they have reported this position in Cantex back in March...

Mr. John Vincic of Dundee reports

ACQUISITION OF SHARES OF CANTEX MINE DEVELOPMENT CORP.


Immediately following the acquisition of securities described in this report, Dundee owned or controlled 4,214,545 common shares and two million warrants of the company, representing an approximate 10-per-cent interest on an undiluted basis and a 14.1-per-cent interest on a partially diluted basis.

If they still own this & own it wholly then....DC owns 4.2 million shares of Cantex (CD - TSXV) trading at $6.49 up from $0.80 in March. This is worth $27 million. They also own 2 million warrants - could be worth another $10mm.


They have other spec gold mining positions as well but only know the ones that are above 10% reporting levels...

« Last Edit: August 12, 2019, 09:15:29 AM by sculpin »

sculpin

  • Hero Member
  • *****
  • Posts: 776
Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #607 on: August 12, 2019, 01:01:33 PM »
Polar Capital continues to buy DC.A

As at July 31, 2019, Polar, on behalf of client accounts over which it has discretionary trading authority, exercised control or direction over 12,623,208 Shares of the Issuer, representing approximately 12.63% of the issued and outstanding Shares.

The requirement to file this report was triggered on July 22, 2019, when Polar, on behalf of client accounts over which it has discretionary trading authority, acquired 777,778 Shares of the Issuer.

Rod

  • Full Member
  • ***
  • Posts: 182
Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #608 on: August 14, 2019, 03:35:30 PM »
Looks like a buyback of B and D preferred shares is coming:

(from news release)

“During the second quarter, we improved our capital structure and lowered our future interest expenses with the successful conversion of our Preference Shares, series 5 to Class A subordinate voting shares of the Corporation” said Mr. Goodman. “Going forward, we will continue to look at ways to optimize our capital structure, lower interest payment obligations and reduce our overall expenses.”

“As part of this, we are taking steps to consider the implementation of a normal course issuer bid and possibly a substantial issuer bid for our Preference Shares, series 2 and series 3. After careful consideration, we believe this provides the Corporation and its stakeholders with more benefits than taking similar action for the Class A subordinate voting shares, which was previously considered by our board of directors,” added Mr. Goodman.

doc75

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 585
Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #609 on: August 15, 2019, 06:51:08 AM »
Looks like a buyback of B and D preferred shares is coming:

(from news release)

“During the second quarter, we improved our capital structure and lowered our future interest expenses with the successful conversion of our Preference Shares, series 5 to Class A subordinate voting shares of the Corporation” said Mr. Goodman. “Going forward, we will continue to look at ways to optimize our capital structure, lower interest payment obligations and reduce our overall expenses.”

“As part of this, we are taking steps to consider the implementation of a normal course issuer bid and possibly a substantial issuer bid for our Preference Shares, series 2 and series 3. After careful consideration, we believe this provides the Corporation and its stakeholders with more benefits than taking similar action for the Class A subordinate voting shares, which was previously considered by our board of directors,” added Mr. Goodman.

I'm contemplating taking some steps toward considering the option of potentially purchasing some more shares based on this news.

What's with the over-hedged language?  It's seriously taken them an entire quarter to get  to this point?
« Last Edit: August 16, 2019, 06:48:58 AM by doc75 »