RE:RE:RE:Indigo and other book stores on lockdown starting Monday
The stock price was at these levels during the peak of the spring lockdown (mid march-mid May). The lower 1 CAD level was triggered by (the assumed) Foyston-mega-fire-sale of 13% of the shares late May-June. That was a huge share of the float. Thus I think one should anchor lockdown price expectations around current levels (2-2.50 CAD). Only if once again a major fund (e.g. Franklin T) decides to sell without mercy we will see 1 CAD again (if I am right). Let's see what happens. This time around the vaccine is a light in the tunnel which is much closer than it appeared during spring lockdown. Canada has secured the most vaccine doses per capita in the world so an immunization of the population is hopefully done by eastern, i.e if you sell now you may not get back in before the stock may rally further. Unfortunately, covid restrictions and -fear will weigh on the Oct-Dec quarter but IDG has shown that they protect cash and will survive until we get covid behind us. I think that also after covid the capex needs will continue to be at a low level for IDG. Some investors probably fear a return to a capex level of +80 MCAD as in 2018 but those big renovations wont be needed for many years. I think there is huge potential to increase Shareholders' Equity by app. 200 MCAD in the years to come if IDG would like to. In my view, by making a new more bullish business plan their leasing assets can be written up by 100 MCAD and tax assets can be reclaimed (also app 100 MCAD). With a huge cash pile and a PSR of 0.07 this continues to be an exciting option like share with further upside and limited downside. As time goes by I believe leasing obligations will be more and more excluded from the net debt calculations (i.e. like pre IFRS16). In the US it seems to be standard bot to include leasing when calculating EV.