Hudson's Bay Co. HBAYF

RE:Was in the Bay the other day..

[skyplt]

I recall when Eaton's was Canada's darling and the Eaton family considered retail royalty.

I lived on a lake just north of Toronto and occasionally I would see the Eaton family floatplane land and I could only assume members of the royal family would be spending the weekend at the lodge.  
Then the wheels fell off and now the only time I see Eaton's mentioned is on the occasional episode of Murdoch Mysteries.

I was at an HBC in Richmond, BC just before Christmas and saw something similar in the watch department.  Two clerks were busy checking their iPhones, and not paying much attention to the few customers lurking about.

As much as I am tempted to jump to conclusions about the demise in retail, I remain focused on the numbers.  Is HBC a 20 dollar stock?  I don't think so.  Just as I had to come to the same conclusion with NT and COS (among others).  I definitely feel badly for those who bought at 17. I have been down that road before.  Not fun.

What I am focused on is the break up value of this company.  We've debated HBC's real estate holdings and what they are worth.  In my view there are three possibilities moving forward:  1.  HBC management attempts to revamp retail and e-tail to better fit the consumer.  I have my doubts this is possible.  2.  They spin off their real estate into a REIT and inject some value into their stock and buy themselves a few years to further attempt 1.  3.  They become the target of a friendly (or hostile) take over attempt.

My conclusions about the value of HBC are based on this.  Unfortunately for those who bought the dream the CEO was selling in Nov 2016, I think you are in for a loss.  My target (and again, with respects to telladaga, it is "my" target I am using for my long term planning and decision making) is $14.  

Whether we see much movement the rest of the week is debatable.  As was said this morning by the fearless leader of our Bank of Canada, it is those things that go "Trump in the night" that are having the most impact on the economy these days.

I am trying to look over the valley to the other side.  I don' think HBC is going to slide off into oblivion...nor do I see it ever trading at $30 again.  Mid teens is my ambition.