Author Topic: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?  (Read 137905 times)

gitawa

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #160 on: March 08, 2018, 07:21:50 AM »
Can anyone give me the links to the prospectuses? Thanks


doc75

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #161 on: March 08, 2018, 07:27:18 AM »
Can anyone give me the links to the prospectuses? Thanks

For the preferred?

I picked them up from here:

https://www.preferredstockchannel.com/symbol/dc.prb.ca/

(this is for the B/Ds and there's a link for the A page)

gitawa

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #162 on: March 09, 2018, 03:24:22 AM »
Got it. thanks.

doc75

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #163 on: March 28, 2018, 09:56:41 AM »
Wow.  I got filled at $1.99 today.  As usual, my elation at getting a bargain quickly turns to fear that I'm the patsy.

Results will be out after market close today. I expect a significant Blue Goose write-down, but haven't seen anything to suggest other calamities. 

Rod

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #164 on: March 28, 2018, 11:14:53 AM »
Wow.  I got filled at $1.99 today.  As usual, my elation at getting a bargain quickly turns to fear that I'm the patsy.

Results will be out after market close today. I expect a significant Blue Goose write-down, but haven't seen anything to suggest other calamities.

I beat you by 1 cent--bought a little at $1.98.

I don't think the sellers are engaged in any long term thinking here. In fact, I feel that about the market generally. I've seen a lot of stocks that just sit there at very cheap prices and nobody wants them because they don't see any immediate catalyst. In seems to me we are in one of those markets where investors refuse to look more than a few months ahead and want immediate returns. Reminds me of the late 1990s.

benhacker

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #165 on: March 28, 2018, 02:13:20 PM »
Don't the Series E preferred have a put feature with DC.a at $2?  Does that concern you regarding dilution as a common owner??  I own a tiny slice of the D series preferred, so not following closely.
Ben Hacker
Beaverton, Oregon - USA

doc75

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #166 on: March 29, 2018, 12:06:23 PM »
Wow.  I got filled at $1.99 today.  As usual, my elation at getting a bargain quickly turns to fear that I'm the patsy.

Probability that I'm the patsy is increasing every day! ;)

Ugly results.  I expected the Blue Goose writeoff. The Union Group impairment was a surprise and I think should be viewed as a permanent loss of capital, despite their commentary about future revaluations.  I must say that, aside from publicly traded securities, I value all of their holdings at a very substantial discount -- but it's still amazing to see them go to zero one by one. 

Interesting call today.  An analyst from Intrepid Capital (which has a legacy position in Dundee via its Endurance Fund) challenged Jon Goodman to give any examples where Dundee has actually added value over the past few years,  and openly pushed for liquidation. Not going to happen, although management is embarking on a strategic review of their holdings and was guiding to end of summer as a date by which we should expect to see some disposals. 

My other takeaway from the call was that we shouldn't expect too much out of Parq too soon.   They expect EBITDA to be $50-$75 million this year, ramping up to $100 in coming years. But they'll be putting another $20-25 million of capital into the project in the very near term, and will continue paying exorbitant interest during the ramp-up period. 


doc75

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #167 on: March 29, 2018, 12:12:40 PM »
Don't the Series E preferred have a put feature with DC.a at $2?  Does that concern you regarding dilution as a common owner??  I own a tiny slice of the D series preferred, so not following closely.

As I recall, the put allows Dundee to pay the prefs either in cash or the greater of (1) $2, or (2) 95% of recent trading price. 

They're quite aware of the redemption and will raise cash by selling some of their holdings. Or at least that's the plan.   They have a bit of work to do on that front because corporate burn + extra capital deployed to Parq and others will eat through all current cash resources.  So yes the redemption is on my mind but I see a very low chance of them going nuclear with dilution. 





Cardboard

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #168 on: March 29, 2018, 12:39:36 PM »
Yes, redemption of these preferreds is very much on their mind for 2019 based on the call today. However, please don't forget that they also have an $80 million unused credit line as to cash availability. It matures at the end of April so we will see the renewal amount but, I would be shocked if it turned out to be zero.

I think that there is a lot of optionality with this company if managed properly: selling assets or a large portfolio, buying back securities trading at severe discounts, more focus, cost reduction, all of this with a book value of $10.36 for a stock price of $1.87 right now or a 82% discount!

Even if assuming some write-offs, value is there and you have to jump in when everyone is rushing out. It feels very uncomfortable or not unlike Fairfax at $87 in 2003 or BAC at $5 in 2011. However, I cannot see how this implodes (at least for a few years) while I could have had with the other two.

The message from Intrepid and another analyst was very clear today or to deliver returns and to stick with what they know. It was very blunt and there was some acknowledgement that status quo is not working: expensive, complicated and unprofitable to manage 100 holdings.

Jonathan Goodman is correct that there is an opportunity with the development of junior miners. In this world of ETF's and algos, anything small is totally ignored especially after a multi-year bear market for most commodities. An example is Altius Minerals who does specialize in that with some success.

If he brings more urgency to liquidate the underperforming and/or unrelated and develops a smart, low capital investment banking operation to develop only the most promising juniors, this could turn out rather well or like dad did.

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Rod

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #169 on: March 29, 2018, 01:20:08 PM »
Wow.  I got filled at $1.99 today.  As usual, my elation at getting a bargain quickly turns to fear that I'm the patsy.

Probability that I'm the patsy is increasing every day! ;)

Ugly results.  I expected the Blue Goose writeoff. The Union Group impairment was a surprise and I think should be viewed as a permanent loss of capital, despite their commentary about future revaluations.  I must say that, aside from publicly traded securities, I value all of their holdings at a very substantial discount -- but it's still amazing to see them go to zero one by one. 

Interesting call today.  An analyst from Intrepid Capital (which has a legacy position in Dundee via its Endurance Fund) challenged Jon Goodman to give any examples where Dundee has actually added value over the past few years,  and openly pushed for liquidation. Not going to happen, although management is embarking on a strategic review of their holdings and was guiding to end of summer as a date by which we should expect to see some disposals. 

My other takeaway from the call was that we shouldn't expect too much out of Parq too soon.   They expect EBITDA to be $50-$75 million this year, ramping up to $100 in coming years. But they'll be putting another $20-25 million of capital into the project in the very near term, and will continue paying exorbitant interest during the ramp-up period.

Dundee was hit pretty hard by natural disasters in 2017: Blue Goose had TWO major fires, one in the Tender Choice plant and the other a major fire in the cattle ranch in BC. Also, Union Group had a dam under construction washed away by floods in Peru. I think that may have had a large impact on Union Group and led directly to the writedown. Throw in a CEO concussion for good measure...

If I remember correctly the refinancing of Parq doesn't need to wait until the project has fully ramped. I believe they are planning to do it this year.