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Reitmans Ord Shs V.RET

Alternate Symbol(s):  RTMNF | RTMAF | V.RET.A

Reitmans (Canada) Limited is a Canada-based specialty apparel retailer for women and men, with retail outlets throughout the country. The principal business activity of the Company is the sale of women’s wear. The Company operates three different brands: Reitmans, Penningtons and RW&CO. The Reitmans banner is a specialty fashion destination. The Reitmans has an online presence and store locations across the country. Penningtons is a destination for plus-size fashion, ranging from sizes 14 to 32. Penningtons operates stores across Canada, as well as an ecommerce site at penningtons.com. RW&CO. operates stores averaging 4,500 square feet in premium locations in shopping malls, as well as on their e-commerce site. Specializing in menswear and womenswear, the brand delivers versatile, well-crafted collections and brand experiences. It operates approximately 391 stores under three distinct banners consisting of 226 Reitmans, 85 Pennington, and 80 RW&CO.


TSXV:RET - Post by User

Comment by Torontojayon Dec 16, 2023 10:11pm
197 Views
Post# 35788563

RE:RE:RE:RE:RE:Remains Dirt Cheap

RE:RE:RE:RE:RE:Remains Dirt Cheap

Here is another way to think about it. 

Ask yourself, how much money from their cash pile is not required to operate the business? Suppose you conclude that $50m is not required to operate the business and the rest is required for working capital purposes.  Remove this excess cash from the market cap and compute a reasonable fcf multiple on the business. For instance, suppose you conclude that 7 is a reasonable fcf multiple and that $50m can be extracted from the balance sheet. Then the company would be valued at, 

$20m*7 + $50m= $190m

At about 49 m shares, we could say the company
may be worth around $3.87 a share. Again, all of this is purely hypothetical and arbitrary in the numbers chosen above. 


I personally prefer to use free cash flow yield without subtracting the cash from the business. This gives me a more conservative view of what I can expect to earn in the future from these cash flows. If the company invests its cash wisely then I can expect an increase in my fcf which should correlate with higher returns in the future. 



 

 

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