Author Topic: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?  (Read 176332 times)

Lakesider

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #320 on: August 09, 2018, 01:57:49 PM »
I think their only right is to receive dividends before the commons, management can delay div payments if they so wish.

Maybe some of the pressure is also worry that at maturity they wont be paid out with cash but with commons that are rapidly sinking?


SafetyinNumbers

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #321 on: August 09, 2018, 02:26:23 PM »
I think their only right is to receive dividends before the commons, management can delay div payments if they so wish.

Maybe some of the pressure is also worry that at maturity they wont be paid out with cash but with commons that are rapidly sinking?

If the market was really worried about that, you would think the DC.PR.E would be a lot lower since those are puttable in June and the conversion would be set at $2. That is, 12.5 shares at $1.37 is ~$17.13 vs the current quote of $23.12.

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Cardboard

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #322 on: August 10, 2018, 04:58:53 AM »
You are correct SafetyinNumbers (Method would be shorter but, anyway).

The drop in the preferreds B and D can only be explained by fear in the marketplace: fear that price will keep heading down or a panic. Logic has left town a while ago.

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doc75

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #323 on: August 10, 2018, 08:15:11 AM »
I think their only right is to receive dividends before the commons, management can delay div payments if they so wish.

Maybe some of the pressure is also worry that at maturity they wont be paid out with cash but with commons that are rapidly sinking?

As far as I know, the B/D's are perpetual -- there's no maturity, and there is no mechanism to redeem them with equity rather than cash.

If dividends are not paid for 8 quarters, then each B/D pref share gets one vote.  But this would make no difference to the Goodmans, since their multiple voting shares would still leave them with a large majority of votes.  For the B & D series, I think there is a very real possibility that they could suspend dividends to preserve cash.  I just don't know to what extent this is driving the price dive.







mrholty

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #324 on: August 10, 2018, 09:15:27 AM »
You are correct SafetyinNumbers (Method would be shorter but, anyway).

The drop in the preferreds B and D can only be explained by fear in the marketplace: fear that price will keep heading down or a panic. Logic has left town a while ago.



I wonder if how much of the drop in the past few days was that perhaps Saudi's SWF owned some shares.  That has been the explanation for the sell off in some of the resource stocks after the Saudi gov't told Saudi companies to liquidate their positions in Canadian companies. 

I like buying when others are having to liquidate so I bought some.  Still a small position however.

sculpin

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #325 on: August 13, 2018, 11:11:37 AM »
Roumell’s Q2 update…

http://roumellasset.com/pdf/update_2Q2018.pdf

Recent travels underscore our conviction that scuttlebutt (investigative journalism) provides real value
to our investors.

Dundee Corporation, a small (roughly $70 million capitalization) Canadian company discussed later
in this letter, is now one of RAM’s top holdings. Dundee has no active sell-side coverage, is deeply out
of favor, once boasted a $1 billion plus market cap, is difficult to understand and consequently uniquely
situated to be a source of investment value creation, in our opinion.

In early June, I traveled to Toronto to attend the company’s annual shareholder meeting. I was one of two investors from outside of Toronto who attended the meeting. Afterwards, I joined management and the company’s board for a wonderful
salmon dinner sourced from the company’s AgriMarine Holdings, Inc. subsidiary.

In addition to spending quality time with Jonathan Goodman, CEO, and Robert Sellars, CFO, I met
key management team members overseeing some of the company’s most important investments.
Richard McIntyre, COO, is heading up the company’s Vancouver Parq Casino investment. Richard seems
exceptionally well-suited, both professionally and temperamentally, to renegotiate Parq’s debt and also
to oversee the monetization of Dundee’s Blue Goose investment. He is joined by seasoned veteran L.
Geoffrey Morphy, Vice President, Corporate Development.

Dundee is described in greater detail below. What I can attest to is that there are some very competent management members, led by a new, albeit legacy controlling family member, CEO in Jonathan Goodman.

Spending three days in Vancouver this month visiting the Dundee’s Parq Casino and Hotel was one of the
nicer company visits in memory. Vancouver, rated by Mercer as being the number one North American
city to live in, and fifth in the world, is a wonderful city. The Parq property is a Class A asset with first rate
amenities. It strategically sits next to the Rogers Arena, home of the Vancouver Canucks as well as a venue
for some of the biggest concerts in the city. Parq is now the largest convention venue in Western Canada.
Joe Burnini, Parq’s President and on-site operator, provided me a detailed walk-through of the property.
I spoke with many of Parq’s line workers which gave me a good sense of their view of the property, what’s
working and what needs further attention.

Top Three Purchases

Dundee Corp., DCA-T/DDEJF. We wrote extensively about Dundee in our 1Q18 letter. After establishing
our initial position, the stock price continued to decline in the 2nd quarter. As is typical, we decided
to add to our position and average down. We believe Dundee is trading at a significant discount to a
conservative estimate of Net Asset Value.

Dundee is a public Canadian independent holding company, listed on the Toronto Stock Exchange
under the symbol DCA and also trades in the US under the symbol DDEJF. Through its operating
subsidiaries, Dundee is engaged in diverse business activities in the areas of investment advisory, corporate
finance, energy, resources/commodities, agriculture, and real estate. The Corporation also holds,
directly and indirectly, a portfolio of investments mostly in these key areas, as well as other select investments
in both publicly listed and private enterprises.

I had a face-to-face meeting with the company’s top management, including CEO Jonathan Goodman, last month and came away feeling confident in our investment. Further, as mentioned earlier, I visited one of Dundee’s significant assets, Parq Vancouver, a few weeks ago and believe that this property is extremely attractive and would garner significant interest
from other investors in the event Dundee decided it no longer wanted to own it and would rather exit. To
be clear, the company’s Parq asset is weighed down by costly debt that needs to be restructured. This debt
is non-recourse to Dundee and sits at the property level only.

Dundee is a prime example of an instance where RAM is acting contrary, in a major way, to the investment
community. The company is certainly “overlooked, misunderstood and out of favor.” Dundee is
a complex holding company that has destroyed massive amounts of capital in the past several years.
The company’s founder, Ned Goodman, who previously created a tremendous amount of value over
many decades, bet way too heavily on commodity-based investments during the latter period of the
financial crisis based on the belief that paper money would be destroyed by central bank actions. His son,
Jonathan, left the company in protest four years ago over deep disagreements with the company’s capital
allocation decisions.

To us, Dundee is a “reverse” prodigal son story— the son has returned to clean up the mess of the father.
We believe Jonathan has inherited a plethora of assets that sum to a significant premium to Dundee’s
share price. He has the vision, and team in place, to execute on a monetization plan resulting in a
streamlined business with core assets. Moreover, investors have time on their side. Dundee effectively
has permanent capital given a combination of perpetual preferred securities and one preferred series
that can be paid off in common stock. We like the investment odds on Dundee very much, particularly
at its recent price, which, from what appears to us, is the result of shareholder fatigue and capitulation.

colinwalt

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #326 on: August 13, 2018, 11:40:09 AM »
@sculpin... Thanks!

SafetyinNumbers

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #327 on: August 13, 2018, 12:18:33 PM »
"Moreover, investors have time on their side. Dundee effectively has permanent capital given a combination of perpetual preferred securities and one preferred series that can be paid off in common stock."

How much lower would the stock go if they decided to pay off the DC.PR.E with common? I would bet the other pref classes would trade off too despite their credit improving.

It's an interesting situation for the company. They could come back to preferred holders asking for another extension or threaten to pay in common which would be a big haircut from $25.

Top 5 positions: ATTO.N ELF.TO TII.V GCM.NT/GCM.WT.B PIF.TO

Cardboard

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #328 on: August 14, 2018, 07:11:42 AM »
Man, you guys are coming up with all kinds of scary theories. Sounds quite desperate to me. I see this kind of talk on Stockhouse when a stock has been beaten up like these but, I don't recall this on CoBF...

Sure, they can screw investors but, what happens after? They end up pretty much locked out of the equity/debt market.

I would like to remind everyone that their public holdings alone are about enough to redeem all preferreds at par!

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petec

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #329 on: August 14, 2018, 07:25:03 AM »
I read the comment about the ability to repay one pref with common was a comment about liquidity, not solvency. It's a risk reducer and therefore a good thing. I may be wrong but that's what I thought he meant.
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