RE:RE:RE:RE:Case study #1 - MTY Food Group Inc.I do agree with the buying back of stock when it can be purchased below intrinsic value. A lot of value creation in that.
In my view, buying back your stock when it is well under intrinsic value is a much better way to return capital to shareholders than by paying a dividend.
This has long been my view with GH. The stock is very undervalued. Based on its current $8.32 price it is between 28% and 37% below my intrinsic value estimate of $11.50 to $13.25 per share.
While it is true that a substantial amount of stock would be very hard to acquire because of the small public float and thin trading, it is also true that from time to time, when we see market volatility, a fair number of shares do trade as some sellers materialize.
GH management has been made aware of this feeling and a suggestion of a Substantial Issuer Bid (SIB) using a type of Dutch Auction, has been suggested to them.
I would be very happy to see GH go on an acquisition spree, by buying itself repeatedly at a big discount to intrinsic value, if it decides against the proposed growth initiatives.
I feel the growth initiatives would create more value over time but would be thrilled with a SIB.
Less shares outstanding = increase in free cash flow per share and higher stock price over time.
Let's see if these suggestions have any effect on mangagement and the board (not impressed with most of the board) and where it may lead in time.
I am very patient and tenacious and enjoy the challenge :)