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MFC Industrial Ltd. Message Board

xds58 28 posts  |  Last Activity: Aug 2, 2015 9:24 PM Member since: Mar 26, 2002
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  • xds58 xds58 Aug 2, 2015 9:24 PM Flag

    They did guide to 0.26 to 0.27 and given where we are in the quarter they should hit that. 0.06 to 0.07 will be gains, so figure base CAD of 0.20 per quarter. Now figure 0.02 is loan losses, which I agree with another poster probably should be excluded - so they are at about 0.18. Of that 0.18, about 0.10 is pretty steady recurring rents, interest, and fee income, while 0.08 is more transactional originations income.

    Beginning 3Q they pick up an extra $1 mil per quarter, or about $0.01/share, fee income on IRT merger with Tradestreet, plus it looks like their ROIs on reinvestment have widened a bit from prior quarters. In addition they pick up about $0.02/share incremental from the roll-off of interest rate swaps associated with Taberna - that's already in the 3Q number but should boost 4Q a bit. So figure between higher spreads, IRT growth, and interest rate swap roll-off you have a $0.02 - $0.03 lift to offset any weakness in origination revenue past 3Q.

    I think these guys can probably maintain CAD of $0.20 for at least the next few quarters, but longer term it could trend somewhat lower. But assuming it stays north of $0.15, which I think is likely, this should be a $6+ stock, given where other hybrid REITs trade.

    Just my opinion. GLTA.

  • xds58 xds58 Jul 31, 2015 8:01 AM Flag

    As someone pointed out, they do have the 21 mil gov pmt. And the backlog has increased since quarter end. There is a bright side, which is spreads have widened, so they are replacing maturing loans at better returns.

    All that said, I don't think issuing shares here is the prudent move, as I believe it may have a long term impact on their cost of capital - lower stock price, less accretive future issuance.

  • Reply to

    The company with no shame.

    by mugblum Jul 30, 2015 4:52 PM
    xds58 xds58 Jul 30, 2015 5:19 PM Flag

    Not really following - rate hike may change some investors discount rate, but that's true for all stocks. Don't see a real impact on portfolio quality, unless you're saying it boosts rates for borrowers and hence puts pressure on marginal credits - hard for me to see 50bp putting most borrowers over the edge though.

    Anyway, I do agree that issuing equity here is a head scratcher. Even if they earn an accretive return, they effectively brand themselves as serial, undisciplined issuers.

  • Reply to

    The company with no shame.

    by mugblum Jul 30, 2015 4:52 PM
    xds58 xds58 Jul 30, 2015 4:58 PM Flag

    How do they have negative exposure? Isn't most of the portfolio floating?

  • just moving with the equity? Trading weaker than other REIT and MREIT prefs...

  • Reply to

    2nd qtr earnings

    by mstrouse54 Jul 22, 2015 4:32 PM
    xds58 xds58 Jul 24, 2015 5:34 PM Flag

    You are assuming price indexed to iron ore, but unlike most Cliff contracts the Northshore contract is indexed to hot rolled steel, I think on a trailing 12 basis. So you have to start w HRS price to get your benchmark.

  • xds58 xds58 Jul 24, 2015 10:04 AM Flag

    This has been in the works for months. Very few companies go to trial on Qui Tam when the government intervenes, ie, take the lead on negotiating settlement. All nine defendents will look to settle. If you want to learn more about Qui Tam law, google search 'National Law Review Recent Qui Tam', and you will see these cases almost never go beyond the settlement phase. It is too expensive and time consuming for all parties to litigate beyond that.

    There will be a settlement, and life will go on. End of story.

  • Reply to

    LBMH currently negotiating a settlement....

    by masstortclaims Jul 21, 2015 3:01 PM
    xds58 xds58 Jul 24, 2015 7:05 AM Flag

    I'm long here too, but you should understand the issue. They, and the other eight defendants, have been in settlement talks for 2 months. This isn't just Liberator, it's the whole industry, so forget about finger pointing. That said a settlement will likely be worked out over the next month. Size is the important issue - I think stock already discounts a larger settlement than is likely, but we'll see. Company has no debt and a lot of cash so payment should not require major operating shift.

  • Reply to

    LBMH currently negotiating a settlement....

    by masstortclaims Jul 21, 2015 3:01 PM
    xds58 xds58 Jul 23, 2015 6:41 PM Flag

    Qui Tam suits where gov. intervenes almost always settled. What matters is the $ amount. When you know that, let us know.

  • Reply to

    MIL - So what's next??

    by mmxliv652 Jul 20, 2015 1:30 PM
    xds58 xds58 Jul 22, 2015 8:17 AM Flag

    PS - sorry, wanted to touch base more on MERC - this business (Northern Bleached Softwood Kraft) I thought was in the crapper too - but he must see something

  • Reply to

    MIL - So what's next??

    by mmxliv652 Jul 20, 2015 1:30 PM
    xds58 xds58 Jul 22, 2015 8:15 AM Flag

    I noticed this too -
    A lot of good comments last couple days. Dickey, he still would have to tender to take private and get board approval - he could have recused himself from board if he wanted to make offer - I'm not sure that's likely. I tend to think the flexibility to sell at higher prices is more likely.
    I think it's possible the 2Q could be horrendous, although I certainly hope not. Nat gas will be terrible, probably another operating loss, at some pt. CLF stops paying the small minimum pmt, the wood chip business is off season, the rest of European trade activity is terrible and competitive - I don't know how much people care though about qtr to qtr earnings -
    There is a lot of optionality on nat gas and longer term iron ore here - and the trade finance initiative has potential - but nothing near term to get excited about
    I believe Kellogg has some low basis stuff from his stakes in earlier Smith vehicles, and may have added at higher prices -
    The idea that Smith wants the price lower is far fetched - I think all these guys would love to see the price higher.

  • Reply to

    MIL - So what's next??

    by mmxliv652 Jul 20, 2015 1:30 PM
    xds58 xds58 Jul 21, 2015 10:03 AM Flag

    light volume - I could move this down to $3.50 if I wanted. Kellogg has to file for sales - in US its within 60 days I believe, not sure in Canada - prob. similar.

  • Reply to

    MIL - So what's next??

    by mmxliv652 Jul 20, 2015 1:30 PM
    xds58 xds58 Jul 21, 2015 8:49 AM Flag

    respectfully, this kind of input is a waste of everyone's time. If you have some tangible evidence Kellogg is selling, that would be hugely helpful. there is nothing in recent volume to suggest that's the case. Wait until you have something real to post to contribute. Thanks.

  • Reply to

    MIL - So what's next??

    by mmxliv652 Jul 20, 2015 1:30 PM
    xds58 xds58 Jul 20, 2015 4:25 PM Flag

    A few thoughts in response -
    1) No way to know what Kellogg is planning - I don't really think his leaving the board at the 52 week low can be read as good news.
    2) Don't know on the bank but presumably we'll know soon enough. It may be a private bank, there may be regulatory or other issues.
    3) Book of $10 is not, in my opinion, close to accurate - for one thing they haven't written down the iron ore assets (Wabush, Pea Ridge), which really represent more of an option than an asset at this point.

    That said, I think the stock looks awfully cheap at this point. Take a conservative estimate of full year EBITDA (careful to exclude gains, as reported in filings), and then assume a fairly high EBITDA to FCF conversion, at least 50% I'd say on average, and you can see even w depressed nat gas this should be cheap on free cash flow. If gas recovers eventually its very cheap. Similarly if they can take their procurement business EBITDA margin from 1-2% to say 4% on the expansion into trade finance, it's very cheap. So definitely ways to win here, but they do have to execute. Right now they are sitting on more or less money losing gas, iron ore, and a near break even procurement business.

  • Reply to

    Cargill pork sold

    by snogreen Jul 2, 2015 2:21 PM
    xds58 xds58 Jul 6, 2015 1:27 PM Flag

    why is this important?

  • xds58 xds58 Jul 1, 2015 2:03 PM Flag

    Here's a few companies who have been named in Qui Tam cases - Johnson and Johnson, Par Pharma, Amgen, Glaxo Smith Klein, Eli Lilly, Pfizer, Astra Zeneca, and the list goes on and on. Good luck finding a health care company that's been around that hasn't been named.

  • xds58 xds58 Jul 1, 2015 1:56 PM Flag

    yup, the unbuyable shares that crossed at 3.59.59 at 2.27 were a good quote, but the normal quote on volume this morning is unreliable.

    I have to get to work, so keep posting. But hopefully people reading figure out what's going on.

  • xds58 xds58 Jul 1, 2015 1:51 PM Flag

    isn't it patently obvoius that the content is ridiculous? If you applied that standard to the industry, you wouldn't be able to find a health care stock to own. Every health care company gets named in a whistleblower suit eventually.

  • xds58 xds58 Jul 1, 2015 1:27 PM Flag

    PS - that response was to your first post, which I guess you or yahoo deleted. Failing that I guess you've gone to innuendo?

  • xds58 xds58 Jul 1, 2015 1:26 PM Flag

    I haven't seen any evidence of 'bullying'. If anything, this board is cluttered with silly posts from shorts.

    The outcomes you speculate on are unsupported by Qui Tam decisions over the last several years. Reading the complaint is a good idea, but those who don't shouldn't rely on your interpretation.

MIL
3.65+0.22(+6.41%)Aug 3 4:02 PMEDT