Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?

[bizaro86]

Management are no longer incinerating money. They’re actually doing a very good job of clearing up the mess the father left.

Whether they will be able to make money in future is another question.

If you think the management change will mean that shareholders realize anything close to NAV (ie things are different this time) then this is absolutely a great deal.

[petec]

Management are no longer incinerating money. They’re actually doing a very good job of clearing up the mess the father left.

Whether they will be able to make money in future is another question.

If you think the management change will mean that shareholders realize anything close to NAV (ie things are different this time) then this is absolutely a great deal.

I think it is fairly clear that NAV is hardening. I looked at this years ago and found it unfathomable. I came back to it 18 months ago and have followed in some detail since. My confidence that the core assets are fairly- or under-valued on the balance sheet is rising, which underpins the downside. If NAVPS stops shrinking there is a decent chance of a rerating. If it grows there is an excellent chance. And then there’s the blue-sky option on Chad working out. Risk/reward seems sound to me.

My hope is a few more assets get sold and the pref buyback is substantial.

[no_free_lunch]

Management are no longer incinerating money. They’re actually doing a very good job of clearing up the mess the father left.

Whether they will be able to make money in future is another question.

If you think the management change will mean that shareholders realize anything close to NAV (ie things are different this time) then this is absolutely a great deal.

Management change happened about 5 years ago.

I really haven't been keeping track of it so I don't intend to counter petec in the details. I have just seen this investment evaporate before my eyes.  I got in at $18 and it was trading at a big discount then too.  I continue to hold out of sheer stubborness but I don't have much confidence in management at this point.

[doc75]

Management change happened about 5 years ago.

I really haven't been keeping track of it so I don't intend to counter petec in the details. I have just seen this investment evaporate before my eyes.  I got in at $18 and it was trading at a big discount then too.  I continue to hold out of sheer stubborness but I don't have much confidence in management at this point.

Management change happened approx. 2 years ago.  As Petec says, the NAV has objectively been hardening.   The risk lies in their pivot back toward the resource sector and their ultimate reliance on commodity prices. 

[bizaro86]

Management change happened about 5 years ago.

I really haven't been keeping track of it so I don't intend to counter petec in the details. I have just seen this investment evaporate before my eyes.  I got in at $18 and it was trading at a big discount then too.  I continue to hold out of sheer stubborness but I don't have much confidence in management at this point.

Management change happened approx. 2 years ago.  As Petec says, the NAV has objectively been hardening.   The risk lies in their pivot back toward the resource sector and their ultimate reliance on commodity prices.

And management skill in making investments in a crappy industry. If the hardened NAV was likely to get paid out to shareholders thatd be one thing. But they're going to invest it in a portfolio of junior miners. Imo that deserves a discount to nav, as it's likely a value destructive strategy.

[petec]

It may well be value destructive. But, resources is where they made their money before father got ego and spread into a lot of other junk. (The 2014 annual letter is an epic ego trip that put me off investing then.)

If they’re right (see latest call) that they have an edge on deep due diligence in a sector (junior miners) that is totally bombed out, then it *might* not be value destructive.

But also, they’re not putting a lot of capital there. They’re recycling capital within that space. But they’re also buying back prefs. And from these levels they may also be able to write up assets like Parq and Android.

[petec]

I fact, I would go so far as to say that management hasn’t put a foot wrong since Jonathan took over. They’ve started clearing out the junk without panicking; they’ve reduced liabilities including taking tough decisions to dilute equity; they’ve shaped a future direction that makes sense (although it requires excellent execution); they’ve brought partners into assets that needed them (Parq); and they’ve cut costs.

[no_free_lunch]

Management change happened about 5 years ago.

I really haven't been keeping track of it so I don't intend to counter petec in the details. I have just seen this investment evaporate before my eyes.  I got in at $18 and it was trading at a big discount then too.  I continue to hold out of sheer stubborness but I don't have much confidence in management at this point.

Management change happened approx. 2 years ago.  As Petec says, the NAV has objectively been hardening.   The risk lies in their pivot back toward the resource sector and their ultimate reliance on commodity prices. 

Are you sure?  Maybe something changed but Ned Goodman stepped down 5 years ago.  This was from 2015.

This was the more serious, aspirational side of Mr. Goodman. At 51, he came back to head Dundee nearly a year ago, after a stint at Bank of Nova Scotia. He had been head of Scotiabank's global asset management, after the bank had bought Dundee Wealth where Mr. Goodman had been president and CEO.

He originally joined Dundee, the company created by his father, Ned, as a partner, vice-president and portfolio manager in 1994. He went on to become CEO and president of Dynamic Funds in 2001, before heading Dynamic's parent Dundee Wealth in 2007.

Under his new leadership, Dundee Corp. is trying to become more transparent to investors in terms of explaining its various holdings in numerous business sectors, from agriculture and real estate to oil and gas. The aim is also to organize the company in a way "that maximizes profitability in finding common objectives" between Dundee's various divisions.

[petec]

Management change happened about 5 years ago.

I really haven't been keeping track of it so I don't intend to counter petec in the details. I have just seen this investment evaporate before my eyes.  I got in at $18 and it was trading at a big discount then too.  I continue to hold out of sheer stubborness but I don't have much confidence in management at this point.

Management change happened approx. 2 years ago.  As Petec says, the NAV has objectively been hardening.   The risk lies in their pivot back toward the resource sector and their ultimate reliance on commodity prices. 

Are you sure?  Maybe something changed but Ned Goodman stepped down 5 years ago.  This was from 2015.

This was the more serious, aspirational side of Mr. Goodman. At 51, he came back to head Dundee nearly a year ago, after a stint at Bank of Nova Scotia. He had been head of Scotiabank's global asset management, after the bank had bought Dundee Wealth where Mr. Goodman had been president and CEO.

He originally joined Dundee, the company created by his father, Ned, as a partner, vice-president and portfolio manager in 1994. He went on to become CEO and president of Dynamic Funds in 2001, before heading Dynamic's parent Dundee Wealth in 2007.

Under his new leadership, Dundee Corp. is trying to become more transparent to investors in terms of explaining its various holdings in numerous business sectors, from agriculture and real estate to oil and gas. The aim is also to organize the company in a way "that maximizes profitability in finding common objectives" between Dundee's various divisions.

Which Mr Goodman does that refer to? Mark handed over to Jonathan c. 2 years ago.

[no_free_lunch]

That was Mark Goodman, who took it over after his father Ned Goodman retired.  Ned was brilliant from what I can tell, he built the business and gave shareholders something like 15-16% per year.  I didn't realize there was a second handoff, but you are still with a new management team.

It has been awhile but I was under the impression that Ned built the business up using financial services.  He ultimately sold that business to one of the big banks.  I am okay with the home building as it's a traditional business and you are competing against smaller operators but where is the evidence that they are exceptional resource investors?  Isn't that where they blew up the company?  Seriously, this company has been an incinerator of capital, I would not invest more without really understanding what they are buying and feeling like the odds are tipped towards me.  In the past you had Ned's reputation but what is there now?  $30 -> $1.  My perspective is, prove it and then maybe I think about it.