Author Topic: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?  (Read 123742 times)

doc75

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 567
Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #150 on: February 14, 2018, 07:31:28 AM »
DREAM solves the liquidity crunch. They are now very net cash at the holdco and have virtually no recourse debt. There's no liquidity crunch - just a question mark over whether you really want these guys allocating that cash. Judging by the carrying value vs. cost of the investment and equity-accounted portfolios as of q3 they are very good at buying high.

I would value a stack of hundreds in my safe deposit box at face value.

I would value a stack of hundreds a crazy guy had lit on fire at zero, even if they theoretically belonged to me.

I'm not totally sure where Dundee fits on the scale, but their record is pretty bad on some of this stuff.

That being said, they do have $2 in retained earnings for every $1 in capital raised. If they would stick to building and selling financial services businesses instead of investing in speculative nonsense this would probably be a great investment.
[/quote]

I noticed that both Dundee and Pinetree Capital were principal investors in APIC / Longreach / Petromaroc.   I haven't looked into it but I wonder to what extent they were drinking the Sheldon Inwentash kool-aid.   A bunch of these guys were heroes in the pre-crisis commodities boom and I don't think they learned their lessons from the crisis.


petec

  • Hero Member
  • *****
  • Posts: 1724
Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #151 on: February 14, 2018, 07:37:03 AM »

I would value a stack of hundreds in my safe deposit box at face value.

I would value a stack of hundreds a crazy guy had lit on fire at zero, even if they theoretically belonged to me.

I'm not totally sure where Dundee fits on the scale, but their record is pretty bad on some of this stuff.


Agreed. I may have misunderstood the post I was replying to. I thought you were wondering what triggered the most recent share sales, and speculating that it might be a current liquidity issue, which it clearly isn't. That doesn't change the fact that they might create one in the future by being morons!

Rod

  • Full Member
  • ***
  • Posts: 156
Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #152 on: February 26, 2018, 01:59:22 PM »
I'm confused about how the dividend on the Series 3 (DC.PR.D) shares is being calculated. Today the dividends on the three series of preferred shares were declared by press release. The D shares will be getting $0.30637, which is $1.225 annualized. This is a yield of 4.90% on face value of $25. The dividend is supposed to be set at the rate of the 3-month Government of Canada T-bill plus 4.10%. So why is the dividend set as if the T-bill is 0.80%? I see today that it is trading at 1.15%. Does anyone understand this?

From the AIF:

"The holders of Series 3 Shares are entitled to receive a quarterly floating rate dividend, as and when declared by the board of directors of the Company, equal to the then current three-month Government of Canada Treasury Bill Yield plus 4.10%."

doc75

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 567
Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #153 on: February 26, 2018, 07:20:55 PM »
I'm confused about how the dividend on the Series 3 (DC.PR.D) shares is being calculated. Today the dividends on the three series of preferred shares were declared by press release. The D shares will be getting $0.30637, which is $1.225 annualized. This is a yield of 4.90% on face value of $25. The dividend is supposed to be set at the rate of the 3-month Government of Canada T-bill plus 4.10%. So why is the dividend set as if the T-bill is 0.80%? I see today that it is trading at 1.15%. Does anyone understand this?

From the AIF:

"The holders of Series 3 Shares are entitled to receive a quarterly floating rate dividend, as and when declared by the board of directors of the Company, equal to the then current three-month Government of Canada Treasury Bill Yield plus 4.10%."

The language in the AIF is not clear (or even accurate?).  Look at the Series 2 prospectus.  The rate is calculated as follows:

- The payment period for the dividend just declared runs from December 31 to March 30, which is 90 days.

- The "floating rate calculation date" (FRCD) is 30 days prior to December 31, so December 1

- The T-bill rate is the 3-month average yield from the auction immediately prior to the FRCD.  This auction was on Nov 28, with avg yield 0.87.  (see https://www.bankofcanada.ca/rates/interest-rates/t-bill-yields/selected-treasury-bill-yields-10-year-lookup/ )

- The dividend paid is then (4.10 + 0.87)/100 * 90/365 * 25 = 0.30637


Rod

  • Full Member
  • ***
  • Posts: 156
Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #154 on: February 26, 2018, 07:47:46 PM »
I'm confused about how the dividend on the Series 3 (DC.PR.D) shares is being calculated. Today the dividends on the three series of preferred shares were declared by press release. The D shares will be getting $0.30637, which is $1.225 annualized. This is a yield of 4.90% on face value of $25. The dividend is supposed to be set at the rate of the 3-month Government of Canada T-bill plus 4.10%. So why is the dividend set as if the T-bill is 0.80%? I see today that it is trading at 1.15%. Does anyone understand this?

From the AIF:

"The holders of Series 3 Shares are entitled to receive a quarterly floating rate dividend, as and when declared by the board of directors of the Company, equal to the then current three-month Government of Canada Treasury Bill Yield plus 4.10%."

The language in the AIF is not clear (or even accurate?).  Look at the Series 2 prospectus.  The rate is calculated as follows:

- The payment period for the dividend just declared runs from December 31 to March 30, which is 90 days.

- The "floating rate calculation date" (FRCD) is 30 days prior to December 31, so December 1

- The T-bill rate is the 3-month average yield from the auction immediately prior to the FRCD.  This auction was on Nov 28, with avg yield 0.87.  (see https://www.bankofcanada.ca/rates/interest-rates/t-bill-yields/selected-treasury-bill-yields-10-year-lookup/ )

- The dividend paid is then (4.10 + 0.87)/100 * 90/365 * 25 = 0.30637

Well, that explains it. Thank you. Note to future self: "check the prospectus".

sculpin

  • Hero Member
  • *****
  • Posts: 718
Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #155 on: February 28, 2018, 10:20:27 AM »
https://www.stockwatch.com/News/Item.aspx?bid=Z-C%3aPMA-2568009&symbol=PMA&region=C

$12,000 worth of securites sold which triggers the need for a press release or a cost of around $3,000. Smart!

Cardboard

They sold the remaining 13.2 million shares today for approx $800k (0.06 per share).

As usual with Dundee, I'm curious what triggered the sale, and even more curious what triggered the investment in the first place.

I'm certain Dumbee has sold most or all (18.5 million shares) of their position in Diagnos as well following the early warning report on the 8th of April. Good to see them disposing of the garbage spec share positions and realizing some cash. Cleaning up the holdco and reducing it down to a relatively easy to understand businesses should be good in the longer term for the share price vis a vis the NAV discount narrowing. Combined the aforementioned sale & the Diagnos one would have brought in about $2.5mm.

petec

  • Hero Member
  • *****
  • Posts: 1724
Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #156 on: March 02, 2018, 01:26:00 PM »

I'm certain Dumbee has sold most or all (18.5 million shares) of their position in Diagnos as well following the early warning report on the 8th of April.

I'm sure I am about to get schooled but why are you certain?

sculpin

  • Hero Member
  • *****
  • Posts: 718
Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #157 on: March 02, 2018, 01:31:47 PM »

I'm certain Dumbee has sold most or all (18.5 million shares) of their position in Diagnos as well following the early warning report on the 8th of April.

I'm sure I am about to get schooled but why are you certain?

Probably should have said I'm making an educated guess. Reasons why..

Previous EWR position (Petromaroc) was fully sold,
Trading in Diagnos showed substantial sale volume subsequently by the same broker at the same price level that handled the sale resulting in the EWR


petec

  • Hero Member
  • *****
  • Posts: 1724
Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #158 on: March 02, 2018, 01:56:08 PM »
Thanks! I'd make the same guess. Here's hoping.

doc75

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 567
Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #159 on: March 08, 2018, 07:01:33 AM »
I was just doing some digging on the current state of Tender Choice.  Found this brief article from Jan 28 that may be of interest to some:

It’s been almost two months since the massive fire at the Paletta International building in Burlington. The fire marshal’s office has wrapped up their part of the investigation, they don’t know what caused the fire and the building has now been handed over to owner.

“We were all in the office and we actually heard and felt a large rumbling coming from the ceiling. A couple of my office staff saw some steel beams come through the wall and the fire alarm went off and about 10 seconds after that we saw smoke coming into our office.” Angelo Paletta, owner.

They all got out and within minutes the entire east side of the building was engulfed causing about $10 million in damage. Their tenet, a meat processor called Tender Choice Foods, have since filed for bankruptcy leaving about 150 employees without jobs. Prior to the fire their operating license had been suspended by the Canadian Food Inspection agency for failing to meet requirements relating to building maintenance. There were contractors working there the day it caught fire.

We reached out to the parent company of Tender Choice Foods to ask about their employees, their plans going forward and if there was a working sprinkler system, they wouldn’t answer any of our questions instead directing us to with their court appointed receiver Deloitte who weren’t able to answer either.


I also stumbled on the Google Reviews for Tender Choice.  Horrible, and darkly funny:

- 1 star:  "Canada's worst job site. ever" . one star
- 1 star: "Do not work here ! The working conditions and the environment at this plant is terrible. The plant manager under pays and insults workers plus the work quite unreasonable, better off working some where else !"
-  5 star: "It's on fire."

Blue Goose bought this business in fall 2016.  These guys could make money generating power from the incinerator where they burn the money.  Virtuous cycle.