Author Topic: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?  (Read 176085 times)

Rod

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #80 on: July 18, 2017, 01:32:11 PM »
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?

I still own the D shares. I think they are quite compelling at this price, both in absolute terms and relative to the B shares. Another advantage to the D's is that they are redeemable by the company at any time, while the B's can only be redeemed on the conversion date in fall 2019. I think Dundee will be focussed on redeeming the E shares first since they mature in 2019. And second to that probably buying back common shares and/or preferred shares in the market, and third redeeming the D's. So it may not make any effective difference.


Cardboard

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #81 on: July 19, 2017, 12:43:48 PM »
The "D"'s are more attractive than the "B"'s for the reasons you guys mentioned.

However, both are among the very few remaining attractive preferreds with a value bend.

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Rod

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #82 on: July 22, 2017, 10:44:30 AM »
The B's have consistently traded at a much higher premium to the D's than some simple math would suggest is rational. Perhaps the explanation for this is simply that the B's have greater liquidity.

SafetyinNumbers

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #83 on: July 22, 2017, 11:30:28 AM »
I think it's just because the current yield is higher but that is starting to change with the 90-day t-bill rate creeping up. Retail investors focus on current yield because they usually don't know about the interconvertible option or how yields reset.

Look at BBD.PR.B / BBD.PR.D, investors didn't notice BBD.PR.D's yield was going up 25% last week until they announced the new coupon even though they had announced the formula a month before.

We have seen the less liquid insurance company floaters begins trading in line with their more liquid strong pairs recently as investors are looking for more floating product.
Top 5 positions: ATTO.N ELF.TO TII.V GCM.NT/GCM.WT.B PIF.TO

Rod

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #84 on: July 22, 2017, 12:41:03 PM »
I think it's just because the current yield is higher but that is starting to change with the 90-day t-bill rate creeping up. Retail investors focus on current yield because they usually don't know about the interconvertible option or how yields reset.

Look at BBD.PR.B / BBD.PR.D, investors didn't notice BBD.PR.D's yield was going up 25% last week until they announced the new coupon even though they had announced the formula a month before.

We have seen the less liquid insurance company floaters begins trading in line with their more liquid strong pairs recently as investors are looking for more floating product.

I agree with the comment about retail investors. But there appears to be more institutional interest in the B's than the D's. I notice that EdgePoint (the old Trimark guys) own the B but not D. I thought perhaps liquidity had something to do with it.

I've been surprised that the floaters have not reacted very quickly to the rising interest rate environment. I thought D's would move up fast. They haven't. The gap with the B's has shrunk somewhat, but that is all. I guess these are ignored securities and it is left to the retail investor who only looks at current yield like you say.

sculpin

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #85 on: July 26, 2017, 05:30:42 AM »
Significant selling pressure over the last year has seen DC.A recently hit a new low of $2.58 in the last week. Looks like much of the selling has come out of the outspoken Murray Stahl from Horizon Kinetics who had sold a whopping 2mm shares up until the end of January 2017. I am sure it is their continued sales from the remaining 3 million that is in part responsible to have pounded the share price down to below $3.

Net Increase or decrease in the number or principal amount of securities, and in the eligible institutional investor’s securityholding percentage in the class of securities, since the last report filed by the eligible institutional investor under Part 4 of the early warning requirements:

There has been a net decrease of 2,078,845shares or -3.75% in the security holding percentage of Horizon Kinetics LLC (“Horizon Kinetics”) with respect to the Class A shares of Dundee Corporation (“Dundee Class A Shares”) since the last report filed under Part 4 of National Instrument 62-103.

5. Designation and number or principal amount of securities and the eligible institutional investor’s securityholding percentage in the class of securities at the end of the month for which the report is made:

Horizon Kinetics, through mutual funds, pooled funds and private client managed accounts for which its subsidiary asset managers, Kinetics Asset Management LLC and Horizon Asset Management LLC (together, the “Firms”), provide portfolio management services, exercises control or direction over 3,132,703 Dundee Class A Shares (or approximately 5.64% of the outstanding Dundee Class A Shares), as of January 31, 2017.


Cardboard

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #86 on: July 31, 2017, 10:49:52 AM »
If you guys want to take advantage of the current selling, there are a few imbeciles selling DC.PR.D and also DC.PR.B pretty hard today or into a vacuum of buyers right into the middle of the Summer.

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Rod

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #87 on: July 31, 2017, 01:09:40 PM »
If you guys want to take advantage of the current selling, there are a few imbeciles selling DC.PR.D and also DC.PR.B pretty hard today or into a vacuum of buyers right into the middle of the Summer.

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Thanks for the heads up. I picked up 200 D's. Unfortunately I'm already fully loaded so can't do more. I suspect someone has been doing a computerized arb trade between the B's and D's for some time, so the original selling pressure may have come from one class only.

gokou3

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #88 on: July 31, 2017, 01:19:11 PM »
If you guys want to take advantage of the current selling, there are a few imbeciles selling DC.PR.D and also DC.PR.B pretty hard today or into a vacuum of buyers right into the middle of the Summer.

Cardboard

Thanks, I have added to the D's.

Artha158

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #89 on: July 31, 2017, 01:26:23 PM »
Thanks, added some.