Post by
Robsopinion on Sep 15, 2023 1:51pm
two things to note
Negative: SRS went from double digit up to single digit down this qaurter vs last.
Positive: the fund has under paid so far this year based on its model royalty payout, so the risk of a distribution cut is currently low.
Also important to note, about a third of the market cap is a loan gaurenteed by Fairfax, and thats like cash in the bank (paying 7.5% interest.
I'm loaded up here, but if it drops below $14, I will take what people want to give up. :)
Comment by
nedstar71 on Sep 16, 2023 1:09am
Sorry I missed this. Can you explain the finer details of this loan? I can't seem to find much background other than interest earned of $4+ million a year.
Comment by
Robsopinion on Sep 18, 2023 12:30pm
The fund has an outstanding loan to keg restaurants for 57 million dollars paying 7.5% interest. Effectivley the fund loans the money to build out the new restaurants in return for the royalty stream. this is also the case with SRV. The distributable cash to unit holders comes from both the royalty stream and the loan repayment/interest. $18 would be too low for me, I would fight for more.
Comment by
nedstar71 on Sep 19, 2023 10:44am
Ah ok thanks that clears it up. Yeah I'm not saying the $18 would pass, but save this small snapshot in time, anything less would be laughed at heartily.