RE:RE:Article 12 Signs of a Value TrapI think Extreme has folded the tent on Corus, fair enough you can change your opinion. The sentiment on traditional media is almost as bad as the energy space, and in the end sentiment negative or postive drives stock prices.
Did anyone listen to the last CC.. I did, and it did not leave me feeling confident that management has yet figured out a path for the future, some pieces are there and alot of trial balloons. Not all of it's mgmt's fault, they are being prudent with capital as the syndicate of banks holding the debt basically owns Corus. Canada with its over reaching regulatory framework is a huge headwind. Charging GST on foreign OTT services is not going to help LOL.
PaceMaker wrote: Griz, I couldn’t resist answering your call
After going through the symptoms of the “sick” and “dying” company, I found that with the exception of point #3, Corus’ fits perfectly all of the remaining 11, especially point # 4, 6, 11 and 12.
No. 4: The business keeps losing market share. Value traps often occur with companies that are ceding ground to new competition. Until market share trends higher, the stock seldom does.
No. 6: The capital allocation process isn’t changing fast enough or is unclear. The funny thing about many value traps is that they still have decent current free cash flow. The “trap” comes from not using that capital efficiently to reinvigorate the business. By definition, the old ways of allocating capital don’t work any more. So, what is management doing differently, and how is that change outlined to shareholders?
No. 11: The chief executive and chairperson of the board are the same person. Ask any CEO how much time managing their board takes, and the number will likely be 25 percent to 40 percent of their day. Deeply entrenched value traps are by their nature corporate turnarounds, whether the boss realizes it or not. They need 100 percent of senior management attention.
No. 12: Even activist investors stay away. In the end, any good value story with non-lethal problems should attract activist shareholders. If it doesn’t, you can scratch an important catalyst off the list.
I have to admit that I’ve failed to clear my submission with intellectual giants of this board, namely extremerisk and his most capable student chuckinlove, so it may be that their opinion would differ and I wouldn’t be surprised if extre-man would increase his call to $20 from $15 (as he has predicted to be at the end of 2019).