Author Topic: RHDGF - Retail Holdings  (Read 35009 times)

writser

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Re: RHDGF - Retail Holdings
« Reply #10 on: October 30, 2014, 12:27:28 PM »
This stock has been going nowhere for a while even though the local subs have been doing well.

Singer Sri Lanka ~ +20% YTD
Singer Bangladesh ~ +20% YTD
Singer India ~ +80% YTD

These numbers are all in local currency. However, also in USD terms I have a rough sum of the parts valuation of around $34 as opposed to $29 or something when this thread was last updated. Cash at the holding level is a bit difficult to estimate; a $1 dividend has been paid but the subs should have brought some cash in as well. With RHGDF trading around $18 today you own a bunch of growing emerging market businesses with an almost  50% discount to fair value. Granted, I haven't looked at the valuations of the subsidiaries themselves.

Unfortunately there is still no news on the alleged IPO but at least they pay out a juicy dividend in the meantime. I'm thinking about buying a bit more. What am I missing?
« Last Edit: October 30, 2014, 12:29:17 PM by writser »
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cobafdek

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Re: RHDGF - Retail Holdings
« Reply #11 on: October 31, 2014, 08:30:11 AM »
Writser, thanks for periodically resuscitating this one, since I missed the earlier incarnations.

Some investors might see this as a Dutch company, since it's one of those naamloze vennootschaps.  Perhaps most would classify it as an emerging Asian company, since that's where all the business is.  But the management is American, and the stock itself is listed and traded only in the US.

If you give any consideration to country/regional weightings in your portfolio, how do you categorize this stock?

The U.S. market Shiller PE is among the highest in the world at 27, and the emerging Asians are at about 16.  If the U.S. were at nosebleed bubble PE levels (say >40), would this make you hesitate somewhat from buying Retail Holdings?  Or does the company-level valuation outweigh all?

« Last Edit: October 31, 2014, 08:37:52 AM by cobafdek »

writser

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Re: RHDGF - Retail Holdings
« Reply #12 on: October 31, 2014, 10:16:48 AM »
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Writser, thanks for periodically resuscitating this one, since I missed the earlier incarnations.
Thanks. I randomly checked my Retail Holdings spreadsheet yesterday and the estimated NAV turned out so high that I figured something was wrong with my calculations. That's why I put some work in this name, posted my thesis here again and nagged a few people. The writer of OTCAdventures, a much better investor than I am, picked up on this (it could just be a coincidence) and wrote an update for his blog today: http://otcadventures.com/?p=1480 . A great read to get up-to-date. Fortunately he arrived at roughly the same NAV.

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If you give any consideration to country/regional weightings in your portfolio, how do you categorize this stock?
I do give a little consideration to that, ideally I'd like to have some attractive stocks all around the world. For all intents and purposes I would qualify this as a true emerging markets stock since that's where their operating subsidiaries actually do business.

This is an interesting question however and something that has been bothering me for a while. For example if you invest in MSCI Spain you have huge positions in Santander and Telefonica and you could argue the results of these companies depend mostly on their large foreign (emerging) subsidiaries. And if you invest in MSCI Taiwan you have a huge position in Taiwan Semiconductor. You could argue the results of that company depend mostly on developed markets instead. Lots of these thematic funds don't really have the exposure you would expect them to have. Anyway, I'm getting off-topic.

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The U.S. market Shiller PE is among the highest in the world at 27, and the emerging Asians are at about 16.  If the U.S. were at nosebleed bubble PE levels (say >40), would this make you hesitate somewhat from buying Retail Holdings?  Or does the company-level valuation outweigh all?
I would pay very little attention to that. So far, the US market has been skyrocketing and RHDGF is going nowhere. I expect (hope :))) that will be true the other way as well.
« Last Edit: October 31, 2014, 10:28:17 AM by writser »
When you are dead, you do not know you are dead. It's only painful and difficult for others. The same applies when you are stupid.

lathinker

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Re: RHDGF - Retail Holdings
« Reply #13 on: November 18, 2014, 03:54:30 AM »
Retail Holdings is entering Cambodia as per this press release: http://www.retailholdings.com/pressReleases/pressReleasesFile_132.pdf

Kind of surprising to me given that people were expecting for them to wind down/liquidate the business. Singer Asia to my knowledge is not active in Cambodia, but it is really surprising that the entry is done by Retails Holdings rather than Singer. They have just opened store #1 in Battabang, expect to follow up with #3 an #3 in early 2015 and expand the network to 50 stores.

I don't really know what to think about this, it appears like a complete reversal of former stragegy. Does RHDGF which I looked at as a shell company have the resources/knowledge/manpower to start up in Cambodia? Are they offering the products that Singer is offering in other countries? Would be interesting to understand more about this move...
Does anybody know more /can make more sense of this?
Alternatively, any Corner member based in Battabang who might go and check out the store  ;) ?

shhughes1116

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Re: RHDGF - Retail Holdings
« Reply #14 on: November 18, 2014, 04:35:13 AM »
Did you try calling the company and asking why their plan appears to have changed?

shhughes1116

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Re: RHDGF - Retail Holdings
« Reply #15 on: November 18, 2014, 06:07:55 AM »
Sorry, just to clarify, my comment was not intended to be a smart-**s comment.  I have avoided a number of dud stocks based on how the management treated me when I called.  If you are a shareholder and they view their shareholders as partners, most management folks are more than happy to talk to you and answer reasonable questions. 

lathinker

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Re: RHDGF - Retail Holdings
« Reply #16 on: November 18, 2014, 06:54:00 AM »
No harm taken.
I sent them an email, will share any reply.

LongTerm

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Re: RHDGF - Retail Holdings
« Reply #17 on: November 18, 2014, 07:02:25 AM »
lathinker,

At first I read the press release the same way that you did, i.e. Retail Holdings was opening stores in Cambodia. However, if you read the second paragraph you will note that they write "Retail Holdings holds three principal assets: 1) a 54.10% equity interest in Sewko/Singer Asia, a distributor of consumer durable products in Bangladesh, India, Pakistan, Sri Lanka, Thailand and now Cambodia ...". So it is Sewko/SingerAsia that is opeing the stores not Retail Holdings, which obviously makes more sense.

I'm interested to hear whether they confirm this, however.

lathinker

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Re: RHDGF - Retail Holdings
« Reply #18 on: November 18, 2014, 09:13:03 AM »
LongTerm,

thanks for reading this more accurately than I did.

You are precisely right: ReHo confirmed by Email that Cambodia will be opened under Sewko and the opening is part  of the overall strategy to maximize the value of the business pending its ultimate disposition.
 
Company came back very quickly on this question btw.




shhughes1116

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Re: RHDGF - Retail Holdings
« Reply #19 on: November 18, 2014, 09:32:48 AM »
Awesome.  Thanks for following up with them and sharing the information on the board.