RE:Dividend Raise
nedstar71 wrote: Am I the only one thinking they raised the dividend at this particular time to try to get the share price up because a new royalty may be in the final stages? Given the share price reaction it didn't work so far, but they'd have to be financing a portion of any new royalty with a private placement or something similar I would assume. Potentially diluting at $2.80 doesn't sound all that appetizing, so they may be doing everything they can to try to move the share price up.
I'm on the side of Babedinkleman here, Tommy has been peddling for almost 2 years that they were on the edge of a new acquisition, but I've seen nothing that gives me that indication, and as pointed out before, I don't think they make this raise solo if something was brewing.
I'm pretty positive we are a debt free position or close to it, I'm pretty sure in the late winter/early spring we reupped and increased our undrawn lending revolver which would have a rate around 3-5%, not the 10% mentioned recently (I believe it's like 2-300million capable), there is no need for an equity raise if a purchase happened and the fact that management is willing to have such a high payout ratio tells me they see no reason to hold cash. Some of the best royalties that are actively making deals run 65-25% payout ratios.
We are in good shape as an income play with some modest growth with our internal deals, but as I said before I believe share price upside is limited. You get great current value for your purchase price. The way the outlook is currently I don't know that I would be trying to get a deal done, if we are talking recession in the next year or so, theoretically there will be deals to be had at lower prices than currently, and very interesting ones when the cycle turns around and someone feels they need a boost to make the most of their upside.
When I get a break from constant work, I'll do a dive into a bunch of different royalty plays and see what looks interesting to me. I can tell you 3 I'm watiching closely are RE, NOVR and ELEC, I need to dig into them, but I've liked the surface scan and what they seem to be trying to do and I can see very large upsides if they are gonna achieve what I think they are capable of, but I need to look harder for possible red flags... (I'm considering starter positions in all 3 just to get circulars)