Time to buy?The stock has now sold off to a key support level of $1.69 and well back from being overbought when it was trading at $1.90, a week ago. It should hold here or improve ahead of Q4 earnings.
Analysts expect Q4 earnings of 9 cents vs 16 cents last year. I think the big question are if subscription cancellations have bottomed out and if national advertising revenue has stabilized.
It is interesting that Boynton does not own any shares outright, but he does have options on 1.4mm class B shares according to the latest INK filing.
If Boynton can show improved earnings, Fairfax may be inclined to move quickly to take Torstar private, before the share price takes off. If earnings do not improve over the next quarter or two, Fairfax may decide to wait to see if a large seller comes cap-in-hand to sell their shares because Fairfax IS the only large buyer in town. The more Fairfax makes the market think they are intent on just holding tight, not buy more shares or take Torstar private, the more nervous investors may be inclined to SELL. Why should Fairfax pay $5.00 a share, taking the company private, if they can be patient and accumulate another block or two at depressed prices. Just my thoughts..
I think the stock is incredibly cheap, but the with the stock so "thinly" traded, any large buyer or seller of 100,000+ shares can move the shares 15 cents or more in either direction on any day.
Does a book value of $4.00 a share really mean anything? Probably as much as Torstar paying $2.00+ a share for Vertical Scope.
I believe Postmedia and Torstar will ultimately merge to reduce costs and for other operatonal synergies. Hopefully in our lifetime...