RE:RE:RE:RE:RE:RE:RE:RE:Great DayI remember a few years ago i believe it was when this was moving up to the big boy exchange you offered me some guidance here, I could be wrong about the timeline as I fully recall doing DD on 3 stocks at the time and ended up buying all 3. This, PTG (pivotech) and PRV (pro real estate investment trust), all three were great cashflow stocks and as it turned out all 3 imo were winners. At any rate whatever the timeline was you have pretty much been by far the most knowledgeable poster on this board, I say this now because I think the comment you made in this post is potentially exactly what may be going on right now, Sean is awesome and I think he has saw enough thru the years to be thinking that same idea, put a monster deal together, no small addition but a large deal, a surprise that makes retail and institutions say "WOW this is the real deal!!" This is 100% speculation on my part and it should not be taken as a pump but more along the lines of wishful thinking. It's time for them to pull a tiger out of the hat imo. Cheers and good luck all. And babe thanks for many years of great insight here. As I've said before, if nothing else this stock has always been a reliable monthly cash machine!
babedinkleman wrote: Interesting and accurate analysis. I still don't see any point in raising the dividend higher before it's prudent to do so. If you've followed this stock as long as I have (my first post on stockhouse was actually on this very board 19 years ago) you've seen the way the stock trades and how the market treats it. They don't get rewarded for overpaying the dividend....they get punished. There is zero reason to push the envelope at this time. Especially if they are in any advanced stages of negotiations with another royalty partner (not that I'm saying they are).
On that note the ONE thing that 'might' give this stock some serious traction is if they do a BIG deal.....$150-200 million.....one that will blur and confuse....and be fairly bulletproof in any economy. Tough to imagine what that would be though.....but if anyone can figure it out it's Sean Morrison. That actually could see the share price pop a dollar or more if it was glitzy enough. Or another option would be a deal that size that diversifies the revenue stream away from this top line royalty model altogether. That in my opinion would be a great move but again what type of revenue stream would be available anymore is anyone's guess....there likely isn't anything outside the top line model that would be accretive enough while having to pay interest purchase. That's my input for what it's worth....but yeah.....not much point in overanalyzing a penny or two dividend difference in my opinion......they know the numbers and will proceed accordingly depending on what is going on behind the scenes.
JayBanks wrote: We have kinda opened a can of worms in my mind on this topic which is great for discussion and information for others.
In reviewing last quarterly financial statements I found 2 interesting details we are currently discussing.
The payout ratio in Q1 was actually 103% (modified to 90% when recalculating for the Dividend Re Investment). So they are already paying out more than is being brought in to us, so the slight bump up in that would not be that aggressive. The question I would have here is they have indicated a payout ratio of 90% for the upcoming quarter, where is that number coming from, the 103% legit payout ratio which would indicate 14.25% growth in receivable from Q1-Q2 (103-90=13+1.25=14.25) or is the 90% a maintainance of the adjusted ratio which would indicate a 1.25% growth as with the dividend increase (5% / 4 quarters = 1.25%/quarter) the adjusted ratio is maintained? Either way we would expect a growth number between 1.25-14.25% which is positive quarter to quarter.
Just to expand on above, they mention Q1 is standardly a lower quarter for income recieveables because AirMiles and Mr. Lube suffer from seasonality issues.
We have started to discuss a hint on possible acquisition and a couple are focusing in on the $46 million of cash indicated to help towards growing into the previous +100% payout ratio. As of Q1 we still had $10 Million cash on hand and in Q1 that number grew .78 mill in what they indicate as a lower quarter, I'd estimate we likely see that we have atleast $11 million cash avalible today. I keep stating that as a cash number because we also have $50 million more of an undrawn 'Acquisition Facility'. I've looked over the terms of this Facility and it was avalible for that time period I indicated before so they actually had $96 million available for growth and as of last quarter we had $60 million.
So the 'Acquisition Facility' interest rate is "subject to prevailing market to interest rates at the time of draw" which would suggest is pretty low at this time. I don't know for sure but that seems like it's Prime+ whatever the major bank is offering at the time and as a business it's likely lower than the Prime+3-7 we see as retail customers on our credit lines. (several years ago I had Prime+1 on my unsecured account which was crazy and I didn't understand how lending worked at the time so I never utilized it advantageously before the bank updated and adjusted my accounts) I notice on the LP specific lines of credit the interests are Prime+.25 or BA+2 and 2.25, I would expect the 'Acquisition Facility' to be similar. (BA seems to mean Bankers Acceptance, which seems like it means some form of Secured Rate, I know Scotiabank's prime rate is 2.45% I would assume other major banks very similar)