Author Topic: Multibagger speculative ideas  (Read 82045 times)

doc75

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Re: Multibagger speculative ideas
« Reply #210 on: May 15, 2018, 08:54:08 AM »
Bri-Chem needs to be sold.

There is value on the balance sheet: net-net working capital of $0.63/share, book value of $1.21/share with most current assets and no goodwill.

There is also value in a distributor of essential products (mud/chemicals) to drill.

If you remove current overhead, filing costs, etc. related to being a public company, which is stupid at this market cap, it would have been profitable this quarter even after being quite disastrous.

Caron had his chance for many years to make this work and he failed. And the CFO does not own, nor never buys any share. Kind of guy that I can't trust. Time to let them packing!

Cardboard

Agreed, but do you see a good chance of this happening?



Cardboard

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Re: Multibagger speculative ideas
« Reply #211 on: May 15, 2018, 11:10:33 AM »
I do, if people get together and push. Only takes 5% of shares outstanding in Alberta to call for a special meeting of shareholders. When people are ready to go that route with extra support, a company of that size has to take it seriously due to costs.

Listening to the call, it is obvious that the decision to enter oil based mud business in the Permian was a poor decision. Margins ended up being sub 5%. So they quickly decided to shut it down from warehouses that opened only a year ago. Even if they had invested more heavily to support it and rapid growth from customers, margins would have been 7-8% vs their traditional 15-20% business.

Who made the math on this before moving in? Obvious that margins would have remained low even in a best case scenario. They mentioned that it required a lot of cash flow/inventory to support while they just came out from a near death experience and cash remains tight...

The good news is that there is no lease break-up fee. Costs will be some tanks clean up cost, liquidating existing inventory and some already happened since customers bought at a lower price vs them moving it to another warehouse and paying freight.

Canada has been poor for all services companies due to AECO pricing, pipeline restrictions and weather: rapid start of spring break-up and now longer than normal spring break-up!

So it seems that the business will normalize this summer. Although, losing Q1 profitability is not good and if it had not been for the poor decision to go after a low margin business in Texas, Q1 would have been weak due to Canada but, that is it.

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Sunrider

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Re: Multibagger speculative ideas
« Reply #212 on: May 15, 2018, 11:15:01 AM »
I do, if people get together and push. Only takes 5% of shares outstanding in Alberta to call for a special meeting of shareholders. When people are ready to go that route with extra support, a company of that size has to take it seriously due to costs.

Listening to the call, it is obvious that the decision to enter oil based mud business in the Permian was a poor decision. Margins ended up being sub 5%. So they quickly decided to shut it down from warehouses that opened only a year ago. Even if they had invested more heavily to support it and rapid growth from customers, margins would have been 7-8% vs their traditional 15-20% business.

Who made the math on this before moving in? Obvious that margins would have remained low even in a best case scenario. They mentioned that it required a lot of cash flow/inventory to support while they just came out from a near death experience and cash remains tight...

The good news is that there is no lease break-up fee. Costs will be some tanks clean up cost, liquidating existing inventory and some already happened since customers bought at a lower price vs them moving it to another warehouse and paying freight.

Canada has been poor for all services companies due to AECO pricing, pipeline restrictions and weather: rapid start of spring break-up and now longer than normal spring break-up!

So it seems that the business will normalize this summer. Although, losing Q1 profitability is not good and if it had not been for the poor decision to go after a low margin business in Texas, Q1 would have been weak due to Canada but, that is it.

Cardboard

Well, for what it's worth, you'd have my vote if you get shareholders organised (not that I own many shares)!

rb

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Re: Multibagger speculative ideas
« Reply #213 on: May 15, 2018, 11:32:52 AM »
Yea, I'd go in to support as well. But it's pretty lightly traded. I'd need 10 days of average volume just to pick up 1% of this thing.

sculpin

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Re: Multibagger speculative ideas
« Reply #214 on: May 15, 2018, 11:52:00 AM »
Bri-Chem annual meeting in June as per below. Dissatisfied shareholders could withhold voting for directors which would send a strong message of discontent with the status quo. There is likely a very large % of shareholders who would support a sale of this business at a price closer to tangible book compared to where it trades currently.

Subject: BRI-CHEM CORP
Dear Sir/Madam:   
We advise of the following with respect to the upcoming Meeting of Security Holders for the subject Issuer:
 
Meeting Type : Annual General Meeting

Record Date for Notice of Meeting : May 10, 2018
Record Date for Voting (if applicable) : May 10, 2018
Beneficial Ownership Determination Date : May 10, 2018
Meeting Date : June 14, 2018

Cardboard

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Re: Multibagger speculative ideas
« Reply #215 on: May 15, 2018, 02:28:03 PM »
Exactly! Withhold for all nominees!

Explore strategic alternatives!

"A lot of people die fighting tyranny. The least I can do is vote against it."  Carl Icahn

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cameronfen

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Re: Multibagger speculative ideas
« Reply #216 on: May 15, 2018, 04:43:41 PM »
Relatively large company for this thread.  TSE:BDI - Black Diamond Group (different than the ski equipment company).  Note: I am lazy so I am writing this up off the top of my head so the numbers may be a little off.  I got this idea after seeing oil spike and looking at other oilfield accommodation companies (i.e. Civeo).  Basically, BDI provides (basically monopoly lodging) to oil E & P companies in remote areas in the oil sands.   They have another segment that does modular unit rentals (i.e. mobile first aid trucks, mobile schools, etc.), but the lodging business is the main driver of the thesis.   I've listened to Imperial Oils conference call, they are looking to go from 180k barrels a day to 240k barrels a day (a 33% increase).  Suncor is looking to increase FCF by 500 million a year (a 16%) increase.  The local economies in Northern Alberta's construction business seem to be booming based on Western One results (another equipment leasing company).  Western One attributes this to increased oil activity.  At it's peak, BDI had a market cap of 1.5 billion, currently the stock is trading at 150 million.  It has slightly more rooms than it did at its peak (roughly 15k rooms), and it bought another line of business, less correlated (but still correlated) with oil from Western One (another CoBF thread) when Western One had liquidity issues.  Currently, EBITDA is around 35 million and total EV is roughly 250 million.  In 2014 when everyone and their brother were extracting oil from the oil sands, this company had EBITDA of 150 million (and a market cap of 1.5 billion).   If you ignore Britco (the business BDI bought which has EBITDA 20-30 million a year), on a per room basis BDI is valued at 16k EV.  Civeo the market leader (and also way down from it's peak) is trading at an EV/room of 30k and applying Civeo's multiple to BDI would result in the equity going to 370 million (and getting Britco for free).  Civeo is the market leader, but its purchase of Noralta was at an even higher EV/room multiple (although Noralta seemed to be doing very well compared to both BDI and Civeo, but is also half BDI's accommodation division's size).  I think using the Noralta multiple, BDI should have an EV of something like 860 million.   Now BDI may have the most attractive relative valuation, but if the market returns to 2014 levels, all these companies should be 5-10 baggers.  Managment is decent to good in my opinion (see the Britco acquisition as well as a requirement to own a multiple of earnings as shares in the company), but I didn't investigate that thoroughly and would be interested to hear others thoughts.  Other companies to look for include Horizon North Logistics. 
« Last Edit: May 15, 2018, 05:12:20 PM by cameronfen »

cameronfen

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Re: Multibagger speculative ideas
« Reply #217 on: May 15, 2018, 04:45:48 PM »
I guess I should add, low correlation to the actual real estate because a lot of times in these remote areas this is the only lodging that oil workers can get.  Much, much more correlated with oil prices. 

bskptkl

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Re: Multibagger speculative ideas
« Reply #218 on: May 21, 2018, 09:44:36 AM »
Exactly! Withhold for all nominees!

Explore strategic alternatives!

"A lot of people die fighting tyranny. The least I can do is vote against it."  Carl Icahn

Cardboard
Count up holdings of this board - see if > 10%, then it may be actionable.
I have 17k shares.
Who are other big holders?
I led successful proxy fight back in old days (2009) - it can be done, not easy, but...I have a roadmap. We had more like 20%.
Of course Cardboard - you have to be willing to be CEO!

maunilpatel

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Re: Multibagger speculative ideas
« Reply #219 on: May 22, 2018, 03:26:37 PM »

Count up holdings of this board - see if > 10%, then it may be actionable.
I have 17k shares.
Who are other big holders?
I led successful proxy fight back in old days (2009) - it can be done, not easy, but...I have a roadmap. We had more like 20%.
Of course Cardboard - you have to be willing to be CEO!
[/quote]


I have 2.2k shares. Not significant but I would like to get behind this.