Author Topic: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?  (Read 123388 times)

sculpin

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #70 on: May 10, 2017, 01:44:08 PM »
2016 results tomorrow...

Will be interested on how the clean up of their stable of troubled investments is progressing. Perhaps the rise in the price of oil - hopefully to $60+ by this Summer - may save some of the investment in United Hydrocarbons Intl. Hard to believe that Dundee had invested a total of more than $400mm in this highly speculative exploration junior in the heart of sub Sahara Africa in the country of Chad - this amounts to over $7 per share. For perspective the DC.A current market cap is $234 million at $4/share current price.

As at September 30, 2016, the Corporation’s carrying value of its 85% interest in UHIC was $189.5 million, and was net of an
impairment of $215.2 million recognized in the third quarter of the prior year. Additional information regarding UHIC may be
accessed at www.unitedhydrocarbon.com.



Dundee Corp. senior management will host a conference call on Friday, March 31, 2017, at 10 a.m. ET, to discuss the company's fourth quarter and year-end 2016 results.

Fourth quarter and year-end 2016 results conference call and webcast

Date:  Friday, March 31, 2017

Time:  10 a.m. ET

Webcast:  at the company's website

Live call:  1-888-231-8191 or 1-647-427-7450

Replay:  1-855-859-2056 or 1-416-849-0833

Replay passcode:  87507054

Dundee plans to issue a news release containing the fourth quarter and year-end 2016 results after market close on Thursday, March 30, 2017, and will also post it to the company's website. The conference call will be archived for replay until Friday, April 7, 2017, at midnight. An archive of the audio webcast will also be available at Dundee's website.



It is incredible the amount of wealth destruction that has taken place here in their investment in UHIC. Already wrote off $215 million and now most likely another $100+ million writeoff coming when they release Q1 on Thursday. This on an current equity market cap of $164mm.

Will be interesting to see the proxy circular this year if the Board has awarded themselves with stock options & management with either pay increases or bonuses for such great shareholder value creation....


Cardboard

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #71 on: May 10, 2017, 01:57:04 PM »
If they discount at 2 or 3% a year the $50 M U.S. to be received over 2 to 6 years and put a lot of value on the eventual royalty, they may not write it down at all from the $230 million CAD or so (for which they own 85%).  :o

At least now someone is incentivized to develop the assets having spent $35 M U.S. upfront while Dundee was cash poor and saddled with a ton of crappy holdings.

They now need to keep on liquidating the firm. It would still trade at a big discount to NAV due to their horrible history but, I would think that it would shrink from here.

I would also hope that one or two of their many holdings will perform...

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Cardboard

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #72 on: May 11, 2017, 04:52:42 PM »
They reported a profit!!!! And higher net value per share than in December with $12.85 a share...

http://www.stockwatch.com/News/Item.aspx?bid=Z-C%3aDC-2470594&symbol=DC&region=C

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sculpin

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #73 on: May 11, 2017, 05:11:00 PM »
They reported a profit!!!! And higher net value per share than in December with $12.85 a share...

http://www.stockwatch.com/News/Item.aspx?bid=Z-C%3aDC-2470594&symbol=DC&region=C

Cardboard

Yeah about that $12.85 per share.... Aggressive accounting if you ask me but who knows it must fall under GAAP principles. So they carry UHIC for $193mm - well we know they just got about $40mm Cdn cash for this plus upside thru payments & future royalties. If you want to be conservative I would value it at $40mm plus some amount to take into account the option value of the potential payouts & royalties. So knock off a good $150 million from their $12.85 or minus about $2.70 per share. Also Dundee Energy is carried at $22mm while the market value is maybe $1.5mm. Just saying they have nothing to crow about yet. Shares are definitely undervalued but anything over $10/share NAV is really being aggressive.

And from the MD&A they are still making highly spec investments although on a much smaller scale. My guess is DC is once again late to the marijuana madness party. Thought these guys were supposed to be value investors....

Approximately $2.0 million
of proceeds generated were reinvested into the portfolio, including an investment of $1.5 million in Nuuvera Corp., a Canadian
incorporated private company focused on medicinal cannabis opportunities.
« Last Edit: May 11, 2017, 05:31:56 PM by sculpin »

sculpin

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #74 on: May 12, 2017, 09:01:19 AM »
Commentary from the Intrepid Endurance Fund Q1...

The top detractors from Q1 performance were Dundee Corp. (ticker: DC/A CN), Syntel (ticker: SYNT), and Primero
Mining’s 5.75% Convertible Notes (CUSIP: 74164WAB2). Dundee’s performance has been abysmal, and that comment
doesn’t just apply to the stock. The company is involved in many different ventures, but almost nothing has worked
out. We attribute at least half of the unfavorable outcomes to poor decisions by management and the rest to bad luck.
Hindsight is 20/20, and our involvement in Dundee came from trying too hard to find value in an over-picked market.
Our fair value for the stock is based on asset value, in contrast to our typical discounted free cash flow valuation.
We felt comfortable with this approach because the assets were originally anchored by publicly-traded equities that
seemed reasonably valued to us on inspection. Dundee’s cash flow has been negative as the team attempted to nurture
a basket of various nascent businesses into self-sustaining enterprises. It hasn’t worked. We had chances to revisit the
investment as the situation changed and decent investments were exchanged for speculative ones. The mistake is on
me, your Portfolio Manager. We have not added to the holding in over a year and reduced our position last summer at
better prices—a small victory in an otherwise dreadful investment.

So where do we go from here? Dundee is a $3.50 stock with $12.25 of book value. That book value continues to
decline as the company’s portfolio is not generating cash flow but Dundee is incurring corporate overhead and financing
costs. Right now the market is implying that every single private company Dundee manages is worth nothing, plus
that the business burns cash at the current rate for another three years. We have urged management to sell Dundee’s
public investments to pay off bank debt and preferred stock, which would reduce cash burn by half.
If the company
then catches a break on one of its major private investments, it could mark a turning point for the company’s fortunes.
We’re not holding our breath but aren’t yet inclined to sell Dundee at today’s prices. The Fund’s weight in Dundee is
approximately 1%, so its impact on performance going forward should be more limited.

http://www.intrepidcapitalfunds.com/media/pdfs/1q17-intrepid-endurance-commentary-final-approved.PDF


bskptkl

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #75 on: May 12, 2017, 09:05:37 AM »
Commentary from the Intrepid Endurance Fund Q1...

The top detractors from Q1 performance were Dundee Corp. (ticker: DC/A CN), Syntel (ticker: SYNT), and Primero
Mining’s 5.75% Convertible Notes (CUSIP: 74164WAB2). Dundee’s performance has been abysmal, and that comment
doesn’t just apply to the stock. The company is involved in many different ventures, but almost nothing has worked
out. We attribute at least half of the unfavorable outcomes to poor decisions by management and the rest to bad luck.
Hindsight is 20/20, and our involvement in Dundee came from trying too hard to find value in an over-picked market.
Our fair value for the stock is based on asset value, in contrast to our typical discounted free cash flow valuation.
We felt comfortable with this approach because the assets were originally anchored by publicly-traded equities that
seemed reasonably valued to us on inspection. Dundee’s cash flow has been negative as the team attempted to nurture
a basket of various nascent businesses into self-sustaining enterprises. It hasn’t worked. We had chances to revisit the
investment as the situation changed and decent investments were exchanged for speculative ones. The mistake is on
me, your Portfolio Manager. We have not added to the holding in over a year and reduced our position last summer at
better prices—a small victory in an otherwise dreadful investment.

So where do we go from here? Dundee is a $3.50 stock with $12.25 of book value. That book value continues to
decline as the company’s portfolio is not generating cash flow but Dundee is incurring corporate overhead and financing
costs. Right now the market is implying that every single private company Dundee manages is worth nothing, plus
that the business burns cash at the current rate for another three years. We have urged management to sell Dundee’s
public investments to pay off bank debt and preferred stock, which would reduce cash burn by half.
If the company
then catches a break on one of its major private investments, it could mark a turning point for the company’s fortunes.
We’re not holding our breath but aren’t yet inclined to sell Dundee at today’s prices. The Fund’s weight in Dundee is
approximately 1%, so its impact on performance going forward should be more limited.

http://www.intrepidcapitalfunds.com/media/pdfs/1q17-intrepid-endurance-commentary-final-approved.PDF
Surprised these knuckleheads don't own preferred like I assume rest of us do. much better risk/reward than common imo.

sculpin

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #76 on: May 12, 2017, 09:14:12 AM »
Commentary from the Intrepid Endurance Fund Q1...

The top detractors from Q1 performance were Dundee Corp. (ticker: DC/A CN), Syntel (ticker: SYNT), and Primero
Mining’s 5.75% Convertible Notes (CUSIP: 74164WAB2). Dundee’s performance has been abysmal, and that comment
doesn’t just apply to the stock. The company is involved in many different ventures, but almost nothing has worked
out. We attribute at least half of the unfavorable outcomes to poor decisions by management and the rest to bad luck.
Hindsight is 20/20, and our involvement in Dundee came from trying too hard to find value in an over-picked market.
Our fair value for the stock is based on asset value, in contrast to our typical discounted free cash flow valuation.
We felt comfortable with this approach because the assets were originally anchored by publicly-traded equities that
seemed reasonably valued to us on inspection. Dundee’s cash flow has been negative as the team attempted to nurture
a basket of various nascent businesses into self-sustaining enterprises. It hasn’t worked. We had chances to revisit the
investment as the situation changed and decent investments were exchanged for speculative ones. The mistake is on
me, your Portfolio Manager. We have not added to the holding in over a year and reduced our position last summer at
better prices—a small victory in an otherwise dreadful investment.

So where do we go from here? Dundee is a $3.50 stock with $12.25 of book value. That book value continues to
decline as the company’s portfolio is not generating cash flow but Dundee is incurring corporate overhead and financing
costs. Right now the market is implying that every single private company Dundee manages is worth nothing, plus
that the business burns cash at the current rate for another three years. We have urged management to sell Dundee’s
public investments to pay off bank debt and preferred stock, which would reduce cash burn by half.
If the company
then catches a break on one of its major private investments, it could mark a turning point for the company’s fortunes.
We’re not holding our breath but aren’t yet inclined to sell Dundee at today’s prices. The Fund’s weight in Dundee is
approximately 1%, so its impact on performance going forward should be more limited.

http://www.intrepidcapitalfunds.com/media/pdfs/1q17-intrepid-endurance-commentary-final-approved.PDF
Surprised these knuckleheads don't own preferred like I assume rest of us do. much better risk/reward than common imo.

Actually have bought large amount of the common between $2.85 and $4. Believe valuation here is now very compelling  with caveats of a gradual upturn in resource markets & successful completion of real estate projects over the next year.

sculpin

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #77 on: May 15, 2017, 08:12:26 AM »
GMP on.....

Dundee Corporation1 BUY
DC.A-TSX

 Last:

C$3.83
May 15, 2017 ▼ Target: C$8.00

UHIC sale provides cash, royalty potential

Dundee Corp. (DC.A-TSX) reported Q1/17 results on May 11
th after the
market close.

Prior to the quarter, DC.A also announced the sale of UHIC
assets to Delonex Energy Ltd. in exchange for US$35 million cash on closing,
US$50 million cash on first oil, and a royalty stream. DC.A owns 85% of UHIC’s
equity. Delonex is a Sub-Saharan oil and gas company focused on exploration,
development and production and is currently active in Ethiopia, Kenya and
Mozambique. The deal is subject to a number of conditions including
approval from the government of Chad. DC.A management believes the
timeline for this approval is uncertain.

In our view, this announcement is positive for DC.A. Although our NAV is
reduced, we believe the market may have been assigning near nil value to the
UHIC investment. We believe the cash payable on closing would help ease
any liquidity concerns for DC.A. Our UHIC NAV contribution (previously based
on management’s carrying value) is reduced by ~$2.60. We assume the deal
will close, but conservatively include only the initial US$35 million payment in
our NAV. Payment on achievement of first oil (US$50 million) would add
~$1.00 to our NAV, plus an ongoing royalty.

Liquidity remains tight

We believe DC.A continues to manage a tight liquidity situation. The existing
$80 million credit facility has been replaced by a 365-day revolving term
credit facility with a Canadian Schedule I Chartered Bank for up to $80 million,
which offers some near term certainty on the corporate debt. Corporate debt
ended Q1/17 at $61 million and currently stands at $49 million after certain
asset sales post quarter. We believe further asset sales of the liquid public
investments remain possible for annual corporate level cash needs (interest,
dividends, op. expenses) of ~$36 million.

Maintain BUY – Parq casino remains on track

Exiting the quarter, our NAV is now $9.77 (previously $12.49). There were no
material changes in our NAV other than UHIC. The Parq Casino Resort project
in Vancouver (Paragon Holdings) remains on track to be completed and
operational by the fall of 2017. Despite the decline, the discount to NAV
remains wide at ~61%. We apply a 20% discount to yield our price target of
$8.00 (previously $10.00). We maintain our BUY rating. Please see Figure 1
for our NAV sensitivity analysis.

sculpin

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #78 on: May 19, 2017, 11:21:58 AM »
Liquidity....

DUNDEE CORPORATION SELLS SHARES IN DREAM UNLIMITED CORP.

Dundee Corp. has sold 15,536,288 Class A subordinate voting shares of Dream Unlimited Corp. at a price of $6.85 per share for aggregate proceeds, net of associated costs, of approximately $106.1-million.


SafetyinNumbers

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #79 on: July 18, 2017, 10:16:26 AM »
Anyone still own DC.PR.B or DC.PR.D?

I've been adding to the floater, DC.PR.D, lately. With the recent change in BOC policy to a bias towards tightening, the 2 year bond yield is around 1.2% so this is is perhaps the best estimate of the 90-day t-bill rate over the next 2.5 years until the option to convert to DC.PR.B is available.

On that basis, the best estimate of average coupon on DC.PR.D is 5.3% which implies a current yield of 11% which is more than the DC.PR.B. Further, all else being equal, the $1.30 spread between the DC.PR.B and DC.PR.D should close into interconversion which would add another almost 5%/yr to the return on a relative basis.

I'm curious on people's thoughts? Compelling or too much of a bother to pick up 5%/yr?
Top 5 positions: ELF IAM GCM.NT/GCM PIF EFR.DB