RE:RE:RE:RE:Donville Kent Newsletter A good read on Reitman'sagreed. as long as they push digital sales and run a tight ship on the CAPEX side of things, the cash build-up is only going to continue which will eventually attract investor eyeballs and force management to return some of the capital via dividends or buybacks.
Per my estimates, assuming the cash flows remain steady, the company can easily commence with a 20c annualized divvy (~$12mm per year cash out) at present itself, however, prudence would dictate that they wait it out for a bit.
Further, the business is generating an ex-cash ROIC of 20%+ which is super attractive. Can only see the way up from here. At worst liquidation value assuming 40% write-down of inventory and land holdings post depreciation would amount to $1.6 - $1.8 - which provides for a very steady and robust downside (which is unlikely owing to the strength of the franchise).
Would urge people to read about Allan Jacobs' investment in Reitmans from 2002 - 2005 or so where he more than tripled his investment. I believe that both on a valuation and business level we are in a similar place as of today.
GLTA & Cheers