KGIC Inc LGLTF

RE:RE:Schulich's shares and LOY market share

[graffiti99]

Hello again,

I agree,  the US acquisition I always thought is the obvious end game for the business. But I'd like to own Loyalist for a while. It's hard to find a well run, small company with good prospects for the future in an industry that is understandable with shares selling at attractive prices. It's like a Warren Buffett company only high growth.

The other aspect I like about this business is that it's somewhat recession proof. This bull market is getting old and when the next recession hits, it might be pretty bad. But I like the idea of not having an oil company or a bank that gets clobbered if the economic landscape changes. Loyalist will capture increased revenues through people re-training if a recession occurs, so I like how this fits in my portfolio at the moment.

In order for Ryu to be successful, he just has to watch that he doesn't overpay for the schools he is acquiring. He's essentially mopping up little pieces of ESL's everywhere, so I hope he's shrewd enough and his due diligence skills are good. I'm pretty confident he knows how to do this. I hope he doesn't get overly-tempted and/or lazy with no competitors challenging him for the properties. If a US outfit starts competiting, then he'll end up having to pay more for properties and he will have to evaluate selling LOY altogether. Much more complicated.

But for now, it's a pretty cool business, especially because he's off to a first-mover advantage and Loyalist in my opinion has a chance to achieve a critical mass of ESL market share in Canada. If Ryu can pull it off, then a US firm will pay top dollar to buy Loyalist because it will be Canada's dominant ESL provider.