Reitmans Ord Shs V.RET

Donville Kent Roe reporter

[Torontojay]

- they are of the opinion that these bonus payments (
~ $20m) are a one time event that will significantly boost profit margins in fiscal 2024. Keep in mind that the market cap is only $ 143.85m or only about 7 times last years bonus payments. 

- the company was able to generate ~ $150 in cash flow against a backdrop of rising USD, and inflationary cost pressures. Wage pressure is moderating and cotton prices are down. 

- the company makes the majority of their profits (over 100%) in Q2 + Q3 (not Q3 + Q4 as mentioned in the report) 
 

- based on normalized earnings and after our discussion with management, the company is trading at a price to earnings of 2.2! 

- we continue to acquire shares in Reitman while partially offsetting retail recession risk by shorting more expensive and levered retail competitors. 

https://donvillekent.com/wp-content/uploads/2023/05/DKAM-ROE-Reporter-April-2023-Final.pdf

[savyinvestor333]

Thanks for posting! Do you know when this newsletter became public? SWe seemed to get a bid yesterday afternoon.

[Torontojay]

I read the report for the first time a few days ago but given the April report date, I'm guessing it's fairly new. 

[pennylane101]

Thanks Jay.  Great article! This part is interesting:   Interpret it any way you want.  "Additionally, there is no longer pressure from the top to build a war chest of cash. We think this leads to interesting capital allocation decisions later this year."