Glentel Inc GLNIF

Glentel Grossly Undervalued!!

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This stock price does not make sense at all. Australian operation lost 2 careers but gained one so in effect lost one. It did not affect operations at all since they took 23 million goodwill write-off to mitigate gain from tower sale. So in effect paid no tax on capital gains (Towers were depreciated to nothing since 1963).  Secondly they deputed their turn around expert GM  to look after Australian operation and I am told by staff member that it started showing results right away.  They have around 1700 locations and roughly 3 employees per location, in short very bare bone lean operation.  Most of the locations built organically. Yield is over 4.6%, which is much more if you consider bank interest at less than 1% after considering the taxes. (Dividend is not all taxable).  They decided to extend the term of their credit line but found interest rate offered on unsecured loan plus underwriters commissions much more than their existing secured loan rate till 2017. A really good decision till next 3 years. Will see after 2017.  Not let us look at other positive things.

1. Apple and Samsung have released new products those will be rolled out through these 1700 locations.
2. They have Apples Class B stores to role out all apple products (Mac stores) in B malls.  Apple sales through their stores in A malls but Glentel roles out Apple products in A malls via Wireless Wave, Telephone Booth etc stores.
3. They have signed contract with all careers BELL, ROGERS and other small careers except TELUS in Canada.
4. They sale Samsung, Apple or their other products and accessories.
5. Third (back to school) and 4^th quarters (Holiday Season) are historically the busiest quarters for Glentel. This year it will be busiest because of iPhone 6 and 6+
6. It is consistently profitable for last 23 quarters and paying dividends with 4.6% yield.
7. Since it is organically grown at secured interest rate and company refused to take on higher interest loan for further expansion, I think it is a win win situation for shareholders since Skidmore’s are looking after their interest.
8. Business Centres are no more a burden and are breaking even or showing profits. In next couple of years all major pipeline and other oil companies are going to update their wireless network. Being one of the major public wireless companies with veteran staff and 52 years on TSE it can bid and get major multimillion-dollar contracts.

 
In short it is a 5 decade old, consistently dividend paying company with 4.952% dividend yield   at today’s stock price and only  22.3 million shares outstanding. It should be priced at least 25 to $28 per share compared to other similar dividend paying wireless companies IMHO.