bizaro86 Posted September 25, 2014 Share Posted September 25, 2014 Advent wireless is a nano-cap company (market cap at current price of $1.32 is $15.75MM). The company operates retail stores selling wireless phones/plans for Rogers and their discount subsidiary. This obviously exposes them to potential risk from Rogers cancelling or amending their contract in a way that's unfavourable to them every few years when the contract comes up for renewal. On the other hand, the company is pretty darn cheap. After subtracting net current assets of $12.7 MM (almost all of which is cash and cash equivalents), the company has an enterprise value of approximately $3 MM. Earnings from continuing operation on a TTM basis are ~1.1MM, so the company is trading at under 3x earnings after stripping out excess cash. Granted the earnings are not especially high quality, but the current contract with Rogers runs until June 30th 2018, so earnings should continue at least until then. Also, the company is something of a niche retailer with exposure to ethnic communitites in Toronto, so that may provide them with a bit of a moat when the next renegotiation occurs. Finally, in the margin of safety camp the company owns ~3MM of real estate and has a 800k note receivable from the sale of its former Vancouver operations. Adding these two values to their cash pile gets to the current stock price, so I don't see much incremental downside from here. Management owns a significant stake in the company, and doesn't seem too concerned about the large amount of cash on the balance sheet, which is probably the biggest risk here. On the other hand, they did announce a $0.10 special dividend for October, which means they're doing something. The biggest potential catalyst would be the company choosing to return capital. Link to comment Share on other sites More sharing options...
Guest 50centdollars Posted September 27, 2014 Share Posted September 27, 2014 This stock is cheap here. It's trading at this than liquidation value. They have $1.13 in cash and $0.22 in real estate value per share. That's $1.33/share. Stock closed at $1.27. Link to comment Share on other sites More sharing options...
writser Posted September 27, 2014 Share Posted September 27, 2014 I spent a couple of minutes looking at this name. I agree it certainly looks cheapish. The special dividend looks like a nice step in the right direction. However, I think the press release is a bit strange: Advent Wireless Inc.(“Advent”or the “Company”) (TSXV:AWI) is pleased to announce that in recognition of the financial benefits received from the Company’s recent sale of BC assets (see news release dated April 30, 2014), the board of directors of the Company has approved a special dividend of $0.10 per common share to be paid on October 27, 2014 to all shareholders of record as at the close of business on October 10, 2014 For the BC sale they received only $200k upfront .. Meanwhile they have been sitting on millions of excess cash for years. Maybe I am missing some (tax / legal) details, but why are they only now paying out a dividend? And why only a single special dividend? Also, from the latest MD&A: Management continues to consider new opportunities in B.C. and Ontario, both within and outside of the telecom sector. Management will communicate with stakeholders when a decision is made that materially affects the operations of the Company. From what I gathered so far I think it is unlikely they will distribute all cash to shareholders. More likely they'll continue hoarding cash and trying to acquire an arbitrary business at some point. I'm not really a fan of that approach. Nevertheless it's just cheap so you probably won't do very bad buying a basket of situations like this. Link to comment Share on other sites More sharing options...
Guest 50centdollars Posted September 27, 2014 Share Posted September 27, 2014 Do these guys have a website? I can't find one lol. Link to comment Share on other sites More sharing options...
writser Posted September 27, 2014 Share Posted September 27, 2014 According to TMX they have no website and a yahoo email address :) . Link to comment Share on other sites More sharing options...
doc75 Posted September 27, 2014 Share Posted September 27, 2014 I owned this a while ago. I had a low bid in at $0.75 and woke up one morning to find it was filled. At the time their future looked brighter than it does today so it was a total no-brainer. The only problem was that it was very illiquid so tough to get in and out. I felt like the only shareholder aside from management! I exited after it doubled, precisely because there was no clear path to me getting some of that cash on the balance sheet in any reasonable time, and because of the obvious limitations of their business model. But it was a reluctant exit. It's cheap. Management aren't fools. They know the limits themselves and I think they'll be quite shrewd with the capital. I personally enjoy the no-nonsense approach -- lack of website and whatever else. There's something refreshing about it. Link to comment Share on other sites More sharing options...
Nelson Posted November 27, 2015 Share Posted November 27, 2015 Advent is finally starting to spend some of its cash... From the Nov 5th press release: "Vancouver, BC, Canada, November 5, 2015 – Advent Wireless Inc. (“Advent” or the “Company”) (TSXV:AWI) is pleased to announce that it is in the process of structuring a financial service subsidiary company (“Subco”) which will operate a consumer lending business, initially in the Greater Vancouver area of British Columbia. Once operations have commenced, Advent anticipates investing an initial $375,000 and up to an additional $1,000,000 in the business during its first year of operations. Advent will have a majority interest in Subco, with the minority shareholders being comprised of persons with marketing, financial and lending experience who will assist in the start-up and continuing operations of the business." Advent has approximately $13 million in cash, so $1 million means they're just cautiously stepping into this, which I like. They've also said they'll be supplying more cash as the business ramps up. I'm familiar with the unsecured debt business, and it's a decent one -- provided you know what the hell you're doing. Goeasy (TSX:GSY) charges 46% APR for a similar type of product. Write-offs obviously bring that number down, but I think they can easily get a 15-20% ROI on anything invested in that business. Like Doc75, I think the management team is pretty savvy here. I think they've got a good partner here or else they wouldn't bother with this. Anyone else still following this one? Link to comment Share on other sites More sharing options...
beerbaron Posted November 27, 2015 Share Posted November 27, 2015 Advent is finally starting to spend some of its cash... From the Nov 5th press release: "Vancouver, BC, Canada, November 5, 2015 – Advent Wireless Inc. (“Advent” or the “Company”) (TSXV:AWI) is pleased to announce that it is in the process of structuring a financial service subsidiary company (“Subco”) which will operate a consumer lending business, initially in the Greater Vancouver area of British Columbia. Once operations have commenced, Advent anticipates investing an initial $375,000 and up to an additional $1,000,000 in the business during its first year of operations. Advent will have a majority interest in Subco, with the minority shareholders being comprised of persons with marketing, financial and lending experience who will assist in the start-up and continuing operations of the business." Advent has approximately $13 million in cash, so $1 million means they're just cautiously stepping into this, which I like. They've also said they'll be supplying more cash as the business ramps up. I'm familiar with the unsecured debt business, and it's a decent one -- provided you know what the hell you're doing. Goeasy (TSX:GSY) charges 46% APR for a similar type of product. Write-offs obviously bring that number down, but I think they can easily get a 15-20% ROI on anything invested in that business. Like Doc75, I think the management team is pretty savvy here. I think they've got a good partner here or else they wouldn't bother with this. Anyone else still following this one? I do too, I'm waiting for it to be a net net again. BeerBaron Link to comment Share on other sites More sharing options...
bizaro86 Posted November 28, 2015 Author Share Posted November 28, 2015 I still have a decent position here, I'll be watching this with interest. Link to comment Share on other sites More sharing options...
fishwithwings Posted July 28, 2016 Share Posted July 28, 2016 What do you guys think about this company being a fraud? The Cash and cash equivalents are valued using level 2 values and are classified as Loans and receivables. Link to comment Share on other sites More sharing options...
fishwithwings Posted October 13, 2018 Share Posted October 13, 2018 Does anyone have any thoughts on this stock? Link to comment Share on other sites More sharing options...
bizaro86 Posted October 13, 2018 Author Share Posted October 13, 2018 Maybe merge with the current thread on this company? http://www.cornerofberkshireandfairfax.ca/forum/investment-ideas/awi-to-advent-wireless/ I put a bit of a write-up in the thread when I started it. Hasn't worked out so far... The potential for Rogers to cancel them mentioned originally has come to pass. Potential catalysts are them getting something for the Ontario stores before they have to close them, and the loan business gaining scale. This has been a big underperformer for me, and I'd love to see the cash liquidated out of here, but no obvious catalyst for that. I'm hoping the lending business pans out and they are able to use the cash productively. Link to comment Share on other sites More sharing options...
fishwithwings Posted October 13, 2018 Share Posted October 13, 2018 Thanks - I'll merge the the threads. Link to comment Share on other sites More sharing options...
Nelson Posted January 30, 2019 Share Posted January 30, 2019 Reviving this thread to say I'm out of Advent. Pretty much broke even after getting dividends. No one thing in particular caused me to pull the trigger, just a few little things. Losing the Rogers stores will hurt, even if that business has deteriorated over the years. And the financing business isn't doing well enough for me to want to invest in a pure-play lender. There's no compelling reason to invest in Advent versus Goeasy. The latter is still growing like crazy without all the risks inherent with an illiquid micro-cap. Link to comment Share on other sites More sharing options...
fishwithwings Posted January 30, 2019 Share Posted January 30, 2019 There's no compelling reason to invest in Advent versus Goeasy. The latter is still growing like crazy without all the risks inherent with an illiquid micro-cap. What about the valuation? One is trading at 2.5x BV while the other is trading at .62x. Link to comment Share on other sites More sharing options...
Nelson Posted January 31, 2019 Share Posted January 31, 2019 The stock trading at 2.5x BV has locations across the country, an established brand, generates plenty of profits, and still has plenty of growth potential. The stock trading at 0.62x BV still has a long way to go. There are still reasons to own AWI but it just didn't check my boxes any longer. My prediction is it turns into one of those zombie value traps, just sort of existing and slowly losing value. I could be wrong on that, but I'd rather invest my cash into what I view as higher quality opportunities. (Not goeasy either, it has its own warts) Link to comment Share on other sites More sharing options...
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now