SafetyinNumbers

I pushed him on buying back the pref over the common primarily because it reduces future cash outflows and is effectively a risk free after tax return (to them) of over 12%. The catalyst here could be whatever Delonex ends up reporting. That royalty could be a home run.

They were asked about buying back stock and they are reluctant while they are still trying to improve their liquidity position. If someone was hoping that was a near term catalyst perhaps that would prompt an exit.

So from what I can tell, the interest rate on the debs varies between 8.5-13.5%, depending on the (weekly) spot market price of uranium oxide. Management doesn't expect the price to exceed 54.99 by 2020, the price above which the interest rate increases (and price is currently at 22.75$, from Google). Any reason to be optimistic about a bull market in uranium? Yes, I think so. The current Uranium spot price is too low for anyone to make money. Most producers locked into long term contract pricing much higher than spot which are expiring over the next few years. In response, Cameco and other large producers have decided to cut production and use existing inventory and buy in the spot market to fulfill production in order to preserve their resource for higher prices. Utilities will have to negotiate contract pricing soon and it will likely come in well above current prices. It’s a classical deep cyclical play that is complicated by an opaque market, two tiered pricing and extremely long lead times. I bought more yesterday with the stock surging higher and a holder of the debentures being forced to sell for what I can only assume are liquidity reasons.

I bought some EFR.DB-TSX yesterday. It’s a pretty interesting piece of paper to have access to a potential Uranium bull market while getting paid to wait. Maturity is Dec 2020, strike is C$4.15. Implied vol of the outstanding warrants is over 60% while the debs trade at par. The debt issue is also a small part of the capital structure and I don’t think they will have a problem raising money but of course I think the debs could be a multibagger.

Added a little more PPR.TO. I think this article shows that we are getting closer to formalization of Quebec hydrocarbon rules and that the government is serious about the rule of law. QEC.TO indicated in quarterly result that they expect the formalized rules to be out by end of Q2. I also expect Q2 cash flow to show significant improvement over Q1 with higher realized prices and lower costs/boe (on higher production) leading to higher netbacks. https://www.ledevoir.com/societe/environnement/528583/quebec-veut-faire-taire-l-opposition-a-l-exploration-petroliere-en-gaspesie

Bought some PPR.TO. Probably the worst performing oil stock in the world. Has operational and financial leverage with two potential catalysts with its QC assets. Q1 was awful but Q2 cash flow should really step up and be an inflection point.

Nah he would have just put the politician in the region in jail.

It might but I would think the changes in lending rules and the higher interest rates have changed the behaviour not any change in the way Torontonians think about buying vs renting.

I bought some ATU.V as well. We must have been most of the volume from the buy side since not much traded.

I think it’s important to note that holders chose to redeem less than allowed at previous redemption dates of DC.PR.E and that will likely be the case on June 30, 2019. Its possible, they will trade like DRM.PR.A which trade at a premium to par and are puttable at any time.

It makes no sense the CRA makes Canadian residents do this for foreign securities held in Canadian brokerage accounts. Isn't the point to capture all income that wouldn't be captured by T-slips? I use Quicken so it lets me produce reports that makes it a lot easier. Also, all foreign dividend income should be captured by T5 slips.

Checking in on this combo pick for 2018, at the end of Q1, they are up an average of 20.51% since posting. I wish I had only owned these names personally for Q1 as I am about flat YTD. I still like them all but took some profits on ASND between $1.10-1.20 but have recently bought some back below $1. It still trades at less than 2x EBITDA. PPR is particularly interesting as it’s basically flat and is 3 months closer to resolution of its arbitration vs the Canadian government which could be worth US$1/share vs the current share price around US$0.33. Management indicated in its AIF, filed late last week, that they expect a ruling in 2018. It’s also 3 months closer to Quebec coming up with its regulations on hydrocarbon development in the province. PPR’s closest peer in terms of acreage in QC is Questerre which enjoys a market cap 8x as big while having similar exposure and less cash flow and reserves from producing assets.

Adding to JAG.TO. Update today about increasing production from Pilar mine and putting high cost Roca Grande mine on care and maintenance. Overall no change to guidance for 2018 but implication is lower costs. I see it trading around 2x EBITDA with gold potentially breaking out.

E-L Financial (ELF.TO) Market cap around C$3.2b but 70% owned by insiders and trades at over 35% discount to NAV. About a third of NAV is a life insurance company in Canada, called Empire Life, and the rest is a global value portfolio.

It's worth noting that the B shares will reset next year and given the 5-year bond is at 2.15%, that would produce a 13% yield on the B's at $12.00. And would anyone be that surprised if the 5-year was 3% by next year? If we reset at 3% then the yield on the B's will be very close to 15%! Also if you own the Ds at that point you can ask to convert to the Bs if you want to lock in for 5 years.

I am long as well. Didn’t want to give the impression I didn’t agree they were cheap but was trying to answer the question.

I'm surprised less than half of those that were allowed to redeem at par did so! They could have redeemed at par and bought their position back below par. The yield on the D's prospectively is closer to 11.3%. It lags the move in 3 month t-bills and changes every 3 months as I'm sure you are aware. The BIR.PR.C has a YTM close to 11% (as they are puttable) that are close to that yield. There are some listed bonds with similar YTMs as well.

ASND.TO just put out 2018 guidance this morning. The company has a market cap of US$45m and their guidance is EBITDA of US$32-40m and FCF of US$14-20m. I’m not sure what the right multiple is but it seems too low right now or even up 50% from here. https://web.tmxmoney.com/article.php?newsid=6899444052652449&qm_symbol=ASND

Any particular names? Based on 2018E and not all have analyst coverage but GCM.TO (gold), ASND.TO (zinc), JAG.TO (gold), and PPR.TO (oil). PPR also has a few other catalysts with respect to Quebec shale assets which currently have zero booked reserves. ASND.TO just put out 2018 guidance this morning. The company has a market cap of US$45m and their guidance is EBITDA of US$32-40m and FCF of US$14-20m. I’m not sure what the right multiple is but it seems too low right now or even up 50% from here. https://web.tmxmoney.com/article.php?newsid=6899444052652449&qm_symbol=ASND

Any particular names? Based on 2018E and not all have analyst coverage but GCM.TO (gold), ASND.TO (zinc), JAG.TO (gold), and PPR.TO (oil). PPR also has a few other catalysts with respect to Quebec shale assets which currently have zero booked reserves.

It seems like the price action in a lot of commodities has already been very good and a lot of equities associated with those commodities have lagged. I find this to be the case in microcaps in particular where many names trade at less than 3x cash flow.

Noranda Income Fund (NIF-U.TO) and Prairie Provident (PPR.TO) I still like both. I thought net assets would act as lower bound for NIF following the end of a long-term contract with Glencore but I was wrong when combined with the dividend elimination and labour strike. Still trading below net assets and well below book value. The strike is now over and zinc prices are hitting 10 year highs. We'll have a better idea of earnings power soon but Glencore controls the manager and might have an interest in keeping earnings suppressed. I have heard some rumblings of activist involvement which might come to fruition before the next AGM. As for PPR, it's a cheap oil and gas stock, trading at a third of reserve value while having two potentially giant catalysts relating to its Quebec shale gas assets (resolution of law suit + legalization of drilling). Both appear to have high margin of safety with decent upside.

How much has your life changed after a 12000% year? Congrats, that’s awesome.

How much has your life changed after a 12000% year?

The gas price (AECO) is obviously awful too which impacts some but not all companies. The differentials between WTI/WCS usually ebb back and forth so eventually they will come in again. I think the interest is well timed as 12/27 was the last day for tax loss selling for Canadians. I own PPR, ATU, IPO, CPG, and GXE. All oil weighted and trading well below peers on valuation. PPR is the most interesting if you like event driven optionality as they have some Quebec assets that may become suddenly very valuable (regulation changes) and a lawsuit with the Canadian government (arbitration hearings completed in Nov) that should be resolved in 2018. All of that upside is for free as the current producing assets and reserves exceed the value of the current EV. Goldman Sachs owns over 50% of it as well so I think once the Quebec catalysts play out, they will sell the company.