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Melcor Developments Ltd T.MRD

Alternate Symbol(s):  MODVF

Melcor Developments Ltd. is a diversified real estate development and asset management company The Company develops and manages mixed-use residential communities, business and industrial parks, office buildings, retail commercial centers, and golf courses. The Company operates in four segments: Land, Properties, REIT, and Golf. The Land segment is responsible for purchasing and developing land to be sold as residential, industrial and commercial lots. The Properties segment owns approximately 24 leasable commercial, retail and residential properties and other rental income producing assets, such as parking lots and land leases. The REIT segment owns approximately 38 leasable commercial and retail properties and other rental income producing assets, such as residential property, parking lots and land leases. The Golf segment owns and manages three 18-hole golf course operations (one of which is 60% owned) and has a 50% ownership interest in one 18-hole golf course.


TSX:MRD - Post by User

Comment by babybunnyon Aug 22, 2022 5:09pm
110 Views
Post# 34912501

RE:RE:RE:Management is complacent

RE:RE:RE:Management is complacentI think we are on the same page Thor16, we just differ a bit in our assessment of how well the company is doing with repurchases.

I will concede that Melcor has gotten the buyback religion just a bit ... but so far they are popping into church on Easter Sunday and that's it.  

The recently-expired NCIB was special, with a daily limit thrice normal.  The daily limit is back down to 1281 again, so even if they repurchase the limit every single day (which they are not doing), they will manage to cancel just 1% of the outstanding shares annually.  This is better than nothing of course, but far short of ideal.  In fact, it is barely enough to offset stock option grants.

Melcor should be aiming to repurchase 5% to 10% of outstanding shares annually, to take full advantage of the mispriced shares.  They will never get there through the NCIB, so a SIB (substantial issuer bid) will be needed.  With shares trading at $12 today, a Modified Dutch Auction with a price range of $13-$15 would have little problem attracting interest.  They might have to sell a couple commercial buildings to fund the SIB, but that is a small price to pay considering the immense benefit.
  
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