Like Firth is ACTUALLY independent of the founding family? Laughable.
Why didn't they disclose the "best offer" received, on the table, and let their broader shareholder base decide.
They are going to run this thing into the ground, because the management team is horrendously insular, and is a relic to a time period that DOESN'T EXIST anymore for this company.
Unless they replace most or all of the top executives, this thing will be bankrupt in probably 2 years.
Sentiment: Strong Sell
You're just #$%$ because you sold out, and kicking yourself because I "tricked" you into selling. Admit it. You secretly LOVE the company, and wish you would have kept those last shares, just so you could have a chance at a 20 bagger.
No one said the company itself is a fraud. The fraud is the misplaced enthusiasm, and PRETENDING that "all is well" here, in order to keep the shell game going, that they actually are "in control" of turning around the merchandising here, and they "only need more time" to capture more of the "low hanging fruit" (after 2 effing years in charge!) THAT is the fraud.
No one said it was "going under."
These are "loyalty purchases," which Rouleau "expects" from his top executives, at a time like this. Because it is CRITICAL to buying them more time on the Street. So it's "chump change" in that context.....as it allows the game of musical chairs to keep going on. Rouleau hasn't "failed," as long as the stock stays strong.
That having been said, I expect a further rally on these announcements. Fortunately, I only shorted 1000 shares....and look forward on making that 10,000 or more, if it goes back up to the low $20's.
5 years is a long time. There is better risk/reward elsewhere. By far. Besides, YOU ARE WRONG. The market cap will not double. It will drop. Rouleau's credibility is in a shambles. He, again, has been "all over" this company, and is an excellent "nuts and bolts" manager, obviously.....BUT he has barely been able to move the needle on merchandise margins, and THAT is where the rubber meets the road here. Pretending there are "all kinds of opportunities" creates such a MASSIVE disconnect from the underlying reality, which is that he has had TWO YEARS here to fix the merchandising, such that it is SELF EVIDENT that HE KNOWS he is up a creek without the proper means of propulsion. Right now, he is engaging in a DISINGENUOUS SHELL GAME with the TUES shareholder base. The only saving grace is that it's possible he has HIMSELF convinced, messiah-style, that he can "still do it." But do WHAT at this point? "Upgrade" the cash registers AGAIN??
It's even WORSE. Yamana got $40 million Canadian worth of Aura stock in June 2009, and another $70 million in 2011, for a total of $110 million worth of stock. Then, in December 2014, they sold the block of stock to Sercor, for only $3.3 million!
Why would Yamana dump something for $3.3 million, taking a 95%+ loss, when Aura is selling for 1/10 of book value, has a market cap of like $18 million Canadian, and produced 180,000 ounces of Gold in 2014, may produce another 180,000 in 2015, is operating not too terribly far from break even, and only has about $20 million in debt, against $200 million in equity??
Could these guys be THAT dumb?
Aura is selling for 1/10 of book value, and Yamana dumps its investment for like $3 million, losing more than 90% of its investment. And then files no disclosure about it, except for a "hush hush" filing on Sedar on December 26th of last year. Does anyone have the skinny on this?
....for the last SEVEN years in a row! Is Rouleau likely to turn that around? No. More likely, the company will lose something on the order of 5 cents a share, in the back half, giving it an EPS for the year around 35 cents. Does such a number, which represents roughly a 6% return on equity, even if the trajectory is for further improvement, going forward, justify a PE multiple of 50 times? Even if the company goes from 35 cents in fiscal 2015, to 75 cents in fiscal 2016, a rather dubious proposition, and probably the best case scenario, would that justify a multiple of more than 20-25x, which puts the stock ALREADY TODAY where it should be trading, 18 months from now? Absolutely not.
The right price for the stock is in the $12-14 range, TOPS. Rouleau snake oil notwithstanding. You simply CAN'T price virtually the ENTIRE ANTICIPATED TURNAROUND into the stock right now. And it is pretty much priced in, because you won't see this company earning more than $1.00-1.25 at its peak, and that is probably, at that point, a company worth 15x earnings, or no more than the current stock price. And that is probably 2-3 years out....IF they can even accomplish that.
It is time for the institutions that loaded up here to GET OUT of this pig. But I will be ESPECIALLY interested in seeing if insiders are buying, or selling, over the coming days.
Sentiment: Strong Sell
I did sell shares. And you can see my most recent filing on EDGAR. Even after selling, Claude represents 30% of my investible net worth in the stock market. I have partially diversified by shifting some of my Claude investment to another gold miner that, while riskier, I like even more for turnaround potential. Which shall remain nameless....for now....since I am buying more of it, as we speak. Although you might be able to figure it out, if you check my other posts of the last few months.
I have suffered significant losses elsewhere, as my Claude investment has gone up, which pretty much mandated the reduction in my position. As it stands now, I think the turnaround is only beginning here, and with the company flying analysts up to the mine early this month, and the company more than tripling its investor days on the road this year, I think they are pretty convinced that their story is going to remain "on track," and that getting it out there is going to attract more buyers for the stock. Getting analyst coverage would also be a very important "return to favor" for Claude, and help restore the institutional shareholder base that I believe this company DESERVES. (Up until recently, I, and maybe a few others, were the only material "quasi-institutional" holders left in this stock. I am ESPECIALLY gratified that the things I saw in this company, one, and even two, years ago, are finally being borne out....in terms of the fundamental "game changing" nature of Santoy Gap....and the ability of this company to be MATERIALLY cash flow and profit positive, even at current gold prices....especially with the trend of an ever weaker Canadian dollar.
You can talk about what they "should" be delivering. But pretending like someone else can readily deliver that with a snap of the fingers is highly questionable. And no one is going to "take it private," with the stock at $18.
The stock is significantly overpriced, based upon the return on equity, and TRAJECTORY of only modest improvement Rouleau has achieved, in total merchandise gross margin dollars, after being admittedly "all over this company," for the last 2 years. It gets MUCH harder from here for him, to move the needle. And that is why he is PRETENDING in the press releases like there is all of this "low hanging fruit." Because he needs to STALL FOR TIME. In this sense, despite otherwise being a competent manager, he is a MANIPULATIVE FRAUD. Because he figures, what else does he have to lose, if he can FIGURE OUT a way to improve overall profitability, in the meaning....even if he is largely CLUELESS, at this point. Since if he pretends otherwise, the SHEEP institutions that bought this stock are likely to believe him, possibly, for a good while longer. And yet, what truly competent manager would have "boatloads" of "low hanging fruit," two years after he took the helm. This is why I say Rouleau is disingenuous, fatuous, manipulative, and a flim flam artist. He KNOWS he's got a business model problem. But he also knows that he has generated enough (modest) improvement, that he can buy more time with the shareholder base, and "go for broke," over the next year....or "figure something out."
The truth is there may be NOTHING to figure out....if the business model is permanently unfixable. It's not Radio Shack. But it's kind of like the old Alco Stores....SQUEEZED between an ever increasing retinue of competitors....while the old strength of the "treasure hunt," and "sales events," that used to turn on a core customer base, but now just largely yawns and could care less at "the TUES differentiation."
Sentiment: Strong Sell
Virtually Irrelevant to the company. Stock talking about this nonsense. They are in their own niche and sector.
I could care less about selling too soon. That was eons ago. That is your figment. I am a student of valuation, and that is what i care about. And it has been quite clear that the most important thing, BY FAR, for Rouleau to do, he has FAILED in.....and thAt is boosting overall gross margin dollars from merchandise sales. The merchandise repositioning has only MARGINALLY registered on the needle. You can tout the same store sales gains all you want, but do you really see this company going from maybe 40 cents in EPS this year, to 75 next, to $1.00+ next? I hope you do....but even if you do, the CURRENT stock price is already discounting such a happenstance.
Sentiment: Strong Sell
Originally, discount to book, and "game changer" nature of santoy gap, that was being IGNORED by the Street, because gold prices plunged in 2013, and this thing went from like 60% institutional ownership, to 10%. That selling is now long OVER, and the company has been undergoing ACCUMULATION for the better part of a year now.
I believe the train is just leaving the station, and the company is on track to earn anywhere from 10-15 cents, Canadian, in EPS, this year. And if the gold price momentum, and Canadian dollar weakness continue, the upside could be even greater.
The stock is trading at roughly HALF the value of its truest peers, currently, and If this year is as solid as expected, i think the stock could triple in as little as 12 months. Or get bought out sooner.
Sentiment: Strong Buy
Will he keep trying? Or will he give up and retire? Isn't the guy like 77 years old now?
I don't think he is one to give up, but this "low hanging fruit" bs is just that. And if his comtinued actions are lime pushing on a string, i would think they are more likely to sell the company than continue on with this nonsense. But the stock would have to drop to $5, before they could find a buyer, and that would be at a price of lime $8, probably. So it's all downhill from here....ESPECIALLY when all that massive institutional buying in the 2nd half of last year starts coming undone.
It is certainly NOT about comparing him to Kathleen Mason anymore, and how much "worse" things would be if she were still on. That is asinine. Who CARES. That would be like Obama still blaming Bush. It is a matter of what has Rouleau really done for this company LATELY....what has he DONE in the last two years. And how UTTERLY SUGGESTIVE his comments of "low hanging fruit" and "loads of opportunities" are to a SLEIGHT OF HAND, that strings an investor base along, while Rouleau continues to stick coal in their stockings.
The misplaced enthusiasm and exhuberance and "we have a million things to still do here to make gonzo profits" , in these conf calls, have became an UTTER EMBARRASSMENT. They are also clearly suggestive that he is DESPERATE, and doesn't know how to move the needle on the most important thing...getting people to BUY MORE when they are in the store. The lower initial markups strategy, in order to boost overall gross margin dollars has FAILED.....as evidenced by the mere $4 million increase in adjusted operating income, in the quarter just reported. NO ONE can deny that. This quarter was supposed to be THE quarter for this coming, with September 1st being the "launch pad" date for a bang up Christmas. Well, it didn't happen, and what is worse is that they can PRETEND in a conference call that this is all "part of the plan," and shift investors' focus to all the "exciting things that are yet to come."
They are skilled manipulators of public perception....but their comes a point where your self respect is in tatters. They are AT that point....and the fact that they are still in make-believe land shows the level of their hubris.
The Street is saying 40 cents this fiscal year, tops. That is a mid to high single digit ROE. The stock is worth no more than 2 to 2 1/2 x book, or $10-12.
Sentiment: Strong Sell