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Sir Royalty Income Fund T.SRV.UN

Alternate Symbol(s):  SIRZF

SIR Royalty Income Fund (the Fund) holds investment in SIR Corp (SIR). The Funds' investment, SIR is engaged in the business of owning and operating full-service restaurants in Canada. SIR has concept restaurant brands, including Jack Astor’s Bar and Grill, Scaddabush Italian Kitchen & Bar, and Canyon Creek Chop House, signature restaurant brands, such as Reds Wine Tavern, Reds Midtown Tavern, Reds Square One, and The Loose Moose, which are used by SIR under a license agreement with SIR Royalty Limited Partnership (the Partnership. The Fund receives distribution income from its investment in the Partnership and interest income from the SIR Loan. The Fund indirectly participates in the revenues generated under the License and Royalty Agreement through its Investment in the Partnership.


TSX:SRV.UN - Post by User

Comment by BlueJay2020on Jun 01, 2021 11:28am
46 Views
Post# 33303115

RE:RE:RE:RE:In what world…

RE:RE:RE:RE:In what world…It's very understandable that you are annoyed at yourself for missing out in a big way.  I did the same as you, but I had the good sense and humility to admit I made a mistake and bought back in - I am so glad I did.  I can well understand your comments in that context, although I completely disagree.

Let's deal with the "pre-Covid levels" first.  Of course, if you want to ignore the previous 5 years where SRV was consistently trading at around double what was yesterday, then you are right, but I'd prefer to look at the overall and long-term health of the brans rather than a couple of weak quarters.  As far as I can see the brand was very much intact and the restaurants served good food in good locations and with nice facilities.  

If you look at the Keg, it was trading at $15.77 pre-COVID after slumping from $22 in mid-2017.  Today it is trading at $15.06. The current yield is a paltry 2.8%,

Boston Pizza was $13.60 pre-COVID after slumping from a high of $23 in mid-2017.  It is trading today at $13,89.with a yield of 5.6%

Pizza Pizza was about $9,60 pre-COVID after slumping from a high of about $17,50 in mid-2017,  Today, it trades at $10.68 with a yield of just over 6%.

Recipe Unlimited was at about $18,40 pre-COVID after slumping from $29 in the fall of 2018.  Today, it trades at $23,13 with no dividend.

I am not sure who else you have in mind (MTY/QSR?) but as far as I can see SRV has been the most stable restaurant stock pre-COVID and from here has a lot more run-way than the other stocks noted above. Assuming a starting point of 60 cents for annual distribution, a $10 SP would give you a 6% yield, which is comparable with Boston Pizza and Pizza Pizza, with potential to get to a buck a year.  

Add to that, we have 50% owned by insiders, less competition incredible pent-up demand to eat and drink in familiar places, and the very clear support now of the senior lender (shown by extending the facilities for a full year).  

I see now that the stock is up over 7% today as I type this - glad I bought more at the open! 





babedinkleman wrote: It very well may do well due to pent up demand.  But just to be clear not one other publicly traded restaurant chain is pricing that in the way this one supposedly is....they are all trading at or below their pre covid levels.  IE take out the dissident factor here and you get that.  The dissident factor may still be at play here mind you.....the what appear to be buying at market buys have all the makings of a couple of crazy old coots still trying to get their way...LOL.  But if it were me (and I hadn't sold too early).....and I was all about that pent up demand argument....I'd be taking at least half my money and moving it into a better restaurant chain that doesn't have the baggage of SIR at a cheaper price.


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