Reitmans Ord Shs V.RET

Q4 Book Value estimate

[TheCount11]

Q4 EPS 44 cents estimate
PPE appraisal 116M
Bankruptcy settlement 95M
Total Equity 250M
Shares outstanding 50M

There is roughly $5 per share in tangible book value.

Giant warehouse.  134M inventory.  Q3 gross profit margins 57%.  

FY 22 EPS $1.69 estimate.  Company will have earned more in the last year that current stock price of A.

[tomperns]

When the market digests the clean balance sheet that the upcoming audited statements will show, in addition to a P/E less than 2, surely we should see a double feom here within the next few weeks.

[TheCount11]

I have a longer time horizon and don't mind the low stock price if there is NCIB put in place.  This is a once in a lifetime opportunity to buy back stock at insanely cheap prices while real interest rates are deeply negative.  Cash is losing value, BoC just upped rates so using excess cash over the next few quarters to buy back stock is a no brainer.  Imagine over the course of

[Zemoy190]

I don't think they will be buying stock back for a few years,,,  My opinion ,, they will still be paying back the 95 mill from the CCAA. As of Dec 18, 2021 they had 108 mill in cash which is enough to cover the 95 mill but I'm assuming they used a mix of their line of credit and cash to pay their creditors. Year or so will go to repaying the rest of the loan. will probably use the

[tomperns]

I agree. I don't see why they would draw down on their bank line when they have the cash to settle the $95M. The bank line is secured with their real estate and committed (so always available). Including the debt being wiped off the balance sheet they will make something like $200M before taxes. If they stay profitable over the next quarters, $5 should be a fair valuation. Looking forward to

[Shredder415]

Why would they use the bank line? Lets see...the market doesnt care about my owned real estate worth north of $140M and doesnt believe my operating business is worth much. But the bank will lend me money against my real estate at say 6% to pay my liabilities and then I turn around and use my cash to repurchase my shares that are trading at probably a 25% FCF yield or higher. I just created

[Zemoy190]

I'm guessing they use a combo of cash and the line of credit. Business has been declining over the last 10 years which is why share buyback probably won't be for few years bro,, plandemic was a good reset for them to find a good amount of stores without losing too much in sales. Brand has good loyalty but will probably look to growing the brand before buying more stock. In my opinion men ,

[pennylane101]

Man, do I feel like a woman!   Oh, yeah... that's because I am.  Sorry fellas.

[TheCount11]

Agreed pandemic should have been a great reset but I am not seeing it.  When I go to Roots store or online I can see and feel the reset.  Way less storewide promotions and cheap T shirts.  The Roots brand is better for it and it shows in amazng gross margins.  Megan is doing an excellent job!  Reitmans is back to storewide promotions.  Go to their website today. 

[tomperns]

Wishful thinking. No way they borrow to buy back shares. All i care about is continuous profits. Market will eventually wake up and value it at least at a 5 times PE.

[filoux004]

Anyone know if the numbers are before the opening or after the close??? Tx very tempting to buy 10k shares before the close. Peace

[savyinvestor333]

 When I look at their history of earnings releases thay all seem to be after the close. I know I mentioned on another board before markets open but that may prove to be a mistake.

[TheCount11]

Agreed while the stock is on the venture exchange Reitmans will trade at a discount.  Right now its a homegamer stock trading at a discount to everything.  Price to Sales, Price to Earnings, Price to Book, etc.  There is no institutional appetite which is fine by me. Stock buybacks can often be the best use of corporate capital for a company that has peaked.  I hope management

[TheCount11]

Roots and Reitmans have a lot of similarties.  Both are specialty omnichannel DTC in Canada.  Under 1B in sales.  Reitmans owns Office and Warehouse while Roots does not. Roots revenues $274 M with DTC sales of $236 M , GM 59.5% with DTC GM 62.6% and profit $22.8 M ($0.54 per share) with profit margin of 8.3% We will see Reitmans results shortly. Last year Roots