RE:RE:RE:RE:RE:It’s go time!!!I'm not too focused on liquidation, it really doesn't matter to me at all. I'd argue that book value to Input is irrelevant (which I think I said if not in so many words), it's you that is using book value to value Input so I was explaining why book value has strayed from intrinsic value and why a discount to book value is warranted.
You clearly think Input is undervalued, I disagree. I'm willing to agree to disagree on that, that is what makes a market. But if you think Input is undervalued, you shouldn't use book value as evidence of it.
I'll also disagree that a liquidation would be clean. Most of Input's assets are canola, which hasn't even been grown yet. This canola is spread all across the pairies, and they don't even really know where it will be in 4 years. Headcount cannot be too low, as there are a lot of logistics involved with Input's business. Crop payments will need to be paid, as well as ~$2-5/MT of trucking costs.This hasn't been deducted from Input's book value.
Management has also shown no willingness to control costs. What makes you think that Brad and Doug will reduce their salaries if Input were selling itself off? I'm willing to bet they would continue paying themselves healthy salaries for the six years or so it would take to run off its book of streams.
If you were looking at the book value, I think you need to consider a few things which certainly warrant Input trading at a discount to IFRS book:
1) The growth or lack thereof in book value. There are much better companies in much better businesses that actually grow book value which warrant discounts to book value. Why should Input trade at book or a premium if they don't?
2) If Input isn't a "growing book value/share" stock, which it isn't, theen that is why you should consider liquidation. The costs to liquidate Input as a company are probably $3/MT of reserves for trucking, $10+/MT of salaries and wages, and maybe $5 million ($.04/share) of legal costs and miscellaneous. These costs are very real and should not be ignored.
But as I said, I don't think you should be valuing it on book, so I don't want to harp on book that much. Input is going to cotinue to be a going concern, so treat it as such. Use Input's cash flows to determine intrinsic value. More relevant metrics to use are P/FCF (which is very high or negative), P/E (high), P/CFO (which isn't useful because of the very high capex (acquiring streams)), EV/EBITDA, etc. If you used these metrics and found Input to be cheap, I wouldn't be replying. But I've seen book value touted multiple times and figured I would chime in why it isn't useful.
I realize I sound like a basher, or even like I'm talking down to you. If I come across that way, I apologize as it isn't my intent. I don't like Input but I've studied it a lot, so I trly am just trying to help. Since you like Input, and own so much of it, I want to guide you to make an informed decision even if it is one I disagree with. And you will be maing a better decision if you focused less on book value or the yield and more on the actual cash flows coming in and going out.