NCIB - Who is Selling?I was looking at the SEDI profile regarding the NCIB. It's like clockwork that 1,617 shares will be repurchased every day. I was then wondering, who is selling at these prices!?
The answer seems to be disenfranchised shareholders who are willing to take their losses and move on. If you used a dividend discount model to value Melcor, you would arrive at a similar price as the current share price.
Management appears to be playing the long game; however, Naomi's appointment in March 2023 needs to be more than just a sober hand on the wheel. The company is overcapitalized and has amassed a treasure trove of assets that are/have generating sub-standard returns. I am not talking about a fire sale of assets at distressed prices; however, shareholders need to see a more serious approach from Management to prove that the carrying value is real! Naomi is key to closing the valuation gap.
It seems pretty simple to me: (1) have a clear capital allocation framework that is well communicated; (2) address the overcapitalization and underperforming assets; and (3) re-structure the REIT and investment properties so that it is tax efficient for shareholders.
I am expecting to see some changes over the coming year and it will be good for shareholders.
LR