Post by
savyinvestor333 on Dec 21, 2021 4:48pm
So correct me if I am wrong
but shareholders equity just increased by close to $2.00 a share from the decrease in liabilities. The property that has a book value of $62 million has a current value of $110 million so another $1.00 a share hidden value. We need to pay the creditors $95 million which will be paid with a laon from BMO but we have roughly the same amount of cash so a wash there. We also had $133 million in inventory at the end of the quarter. Anyone want to take a stab at a guess of value per share now? Once we report 4th quarter our trailing P/E is going to be around 1.5 or 2 if all they do is break even.
Comment by
Zemoy190 on Dec 21, 2021 4:56pm
I believe this should be trading around 4-5 bones right now. The fear of creditors pushing Reitmans into bankruptcy was lifted today with the approved plan. Solid earnings in Q4 and year end financials which should be released near the end of April should bring this to around 7-8. Will be very interesting to see where they go after this.
Comment by
Shredder415 on Dec 21, 2021 5:05pm
This situation has continued to derisk itself with every new piece of information released. $4-5/share is reasonable, conservatively take $70M of EBITDA at a 4x multiple puts this in that range. This has been a dying business the past decade, I believe Covid allowed them to rip the band-aid off with permanent store closures and we will hopefully see stabilisation in the business longer-term.
Comment by
savyinvestor333 on Dec 21, 2021 5:24pm
Anyway you slice it we have a long ride up to get to ROOT's valuation and target prices that TD and Scotia have on them. We have 300% gains in the last 3 months I would be very happy with anothe 300% in the next 3 months. That would put us at only $3.00 which is easily doable.
Comment by
savyinvestor333 on Dec 21, 2021 5:30pm
Sorry I should clarify another 300% from my initial purchase price.