PDER - Pardee Resources

[rist.tom]

Here is the most recent quarterly report

PDER_-_2017_Q3_Report.pdf

[txvalue]

Trading has been a bit odd on this one the past few weeks. It would be interesting to know if this is just random or if there is a large seller trying to unwind a position.

[Grafter]

Just received the Q4 earnings in the mail today.  Was sort of surprised that it was a bound half sheet sized booklet.  Though I am curious when the annual report will come out and what they will do with their increasing cash position.

[Jurgis]

Just received the Q4 earnings in the mail today.  Was sort of surprised that it was a bound half sheet sized booklet.  Though I am curious when the annual report will come out and what they will do with their increasing cash position.

 

The booklet might be all you gonna get.

 

PDER is currently Pink No Info: https://www.otcmarkets.com/stock/PDER/overview

 

Which also means that I would not be able to buy more at Fido (most likely). If I wanted to buy...  ::)  8)

 

OT? I also like how OTCM is trying to scare Pink companies to upgrade to OTC-something:

 

Warning!  This company may not be making material information publicly available

Buying or selling this security on the basis of material nonpublic material information is prohibited under Section 10(b) of the Securities Exchange Act of 1934 and Rules 10b-5 and 10b5-1 thereunder. Violators may be subject to civil and criminal penalties.

 

 

Disclosure: I have some PDER and some OTCM.

[Tim Eriksen]

I received my 34 page glossy annual report today.  Shareholders in street name should get theirs toward the end of the week. 

[oddballstocks]

I received my 34 page glossy annual report today.  Shareholders in street name should get theirs toward the end of the week.

 

Yes, this the is MO, a very nice and detailed doc explaining results at each division plus financials.

[wachtwoord]

Just received the Q4 earnings in the mail today.  Was sort of surprised that it was a bound half sheet sized booklet.  Though I am curious when the annual report will come out and what they will do with their increasing cash position.

 

The booklet might be all you gonna get.

 

PDER is currently Pink No Info: https://www.otcmarkets.com/stock/PDER/overview

 

Which also means that I would not be able to buy more at Fido (most likely). If I wanted to buy...  ::)  8)

 

OT? I also like how OTCM is trying to scare Pink companies to upgrade to OTC-something:

 

Warning!  This company may not be making material information publicly available

Buying or selling this security on the basis of material nonpublic material information is prohibited under Section 10(b) of the Securities Exchange Act of 1934 and Rules 10b-5 and 10b5-1 thereunder. Violators may be subject to civil and criminal penalties.

 

 

Disclosure: I have some PDER and some OTCM.

 

Pardee is one of the best behaved pink sheet company I have come across. No "we consider ourselves private" bullshit, prompt and respectful email conversations, they send me an email with every report without me asking for it every time and clear reports with enough details (especially annual reports).

[Jurgis]

Thanks for correction about PDER annual. I did not remember what I got last year.  8)

 

I definitely did not imply that PDER is 'bad' pink company. I was just saying that OTCM and brokers don't distinguish 'bad' no-info pinks from 'good' no-info pinks. Might be opportunity for some here.

 

Peace.  8)

[wachtwoord]

Ok, no worries, just wanted to stand up for a good actor in the space :)

 

By chance, I just received my annual report in the mail an hour ago (so I assume you have/will too).

[awindenberger]

Ok, no worries, just wanted to stand up for a good actor in the space :)

 

By chance, I just received my annual report in the mail an hour ago (so I assume you have/will too).

 

Will they send out PDF versions of the annual report? If so, can anyone post it here?

[_JJ_]

Ok, no worries, just wanted to stand up for a good actor in the space :)

 

By chance, I just received my annual report in the mail an hour ago (so I assume you have/will too).

 

Will they send out PDF versions of the annual report? If so, can anyone post it here?

Pardee_Annual_Report_2017_low_res.pdf

[txvalue]

Tim mentioned this years ago, but the director fees are just exorbitant for their size.

 

From the link Berkshire's 2016 median compensation for each director was $2700, coincidentally this is what a Pardee director makes for missing a meeting in person but hopping on a video call.

 

http://graphics.wsj.com/boards-of-directors-at-SP-500-companies/

 

[fishwithwings]

I can't find my Q3 report for some reason.  Here is the annual.

 

If you want prior years PM me.  I have back to 2002.

 

Thanks Tim.

 

Some "devil's advocate" type questions for anyone who cares to chime in:

 

1) To what extent is this really a play on met coal prices? Even in 2016, a horrid year for coal, their coal segment was their single largest source of revenue with met coal royalties, in turn, comprising 76% of total coal segment revenue. They are probably doing well this year since met coal prices have been strong.

 

2) I know there's been lots of discussion about the value of their timberland holdings. Doesn't the market value companies based on the NPVs of their future cash flows though? Timberlands generally generate anemic cash flows and, as Pardee probably isn't going to sell off big chunks of land anytime soon (right?), the timber lands should be valued based on their likely cash flows and not their hypothetical sale prices. Am I thinking about this right?

 

3) As others have pointed out, their G&A costs are quite high. Surely this is, at least in part, a result of them operating in a number of different segments spread all over the country. I wonder if they would be better off focusing on their core Central Appalachia businesses and  rightsizing their G&A accordingly?

 

4) Has their been any shale gas E&P activity on their vast land holdings? In the 2016 annual report they mention coalbed methane wells, but my understanding is that coalbed methane isn't very cost competitive when compared to shale gas.

 

*Bump

[oddballstocks]

#2 the market understands that one formula isn't the right way to value everything.  Timberland is valued like a REIT, on yield, or on projected (possible) yield.  Which in turn is very similar to a sale price, because that's the same metric that timber buyers use when buying timberland.

 

#4 there should be.  There is activity in W PA, and their land is only a little further south in WV.  This isn't 2008 levels of activity, or 2012 levels, but it's still active.

[sarganaga]

A few months ago I cut this from ~ 7% position to < 2%. The assets are great & the dividend is nice, but there is way too much overhead. In 2017 they show operating revenues of 33,806,186 with 15,050,534 in associated operating expenses. Even these "operating expenses" should probably be looked at more closely since most of the revenue is from royalty like payments. On top of this, there is 6,789,018 in G & A expense. What are we getting for the G&A? IMO shareholders would be much better off if they were able to collect their share of the royalties from the legacy assets with the relatively small administrative expense that would involve.

 

Instead they suggest that

" While we add to this portfolio through acquisitions, we also work to grow beyond our core markets, utilizing our administrative, legal, investment, management, and financial resources to expand into new areas of investment opportunity This seems more like empire maintenance/building to me than enhancing shareholder value.

 

I continue to hold my smaller position for now.

 

 

 

 

[txvalue]

I agree with the above that the overhead here is much too high - I think that will continue to be a drag on the stock moving forward.  Patient investors are great, but less so when they are pocketing large amounts of money while waiting for their pitch.

 

I do like todays tender annoucement @ 188.94 for up to 26,463 shares. This will help offset dilution and it is good to see them doing something with the money coming in now that debt is essentially all paid off.

[writser]

Yeah, the tender offer is nice but I think the price is a bit on the low side. I hope they manage to buy back the full amount or even a bit more as they did last time, but could be difficult at $189. We'll see - I'm not planning to tender.

[sarganaga]

Pardee has gone into the almond producing business.  From the press release:

 

[iPHILADELPHIA, Nov. 30, 2018 /PRNewswire/ -- Pardee Resources Company: (OTC: PDER) (the "Company") reports that its subsidiary, Pardee Agricultural Properties LLC, recently acquired a controlling interest in a partnership that has leased a 390-acre farmland tract located near Evora, Portugal.  The tract will be developed and managed for almonds by a multi-generational agricultural operating company with extensive almond growing expertise in California's Central Valley and a local experienced Portuguese agricultural partner.  (The Company's California table grape farms were developed and are managed by this same agricultural operating company).  The Company made an initial investment of $1.1 million in the partnership and plans to invest an additional $2.1 million over the next four years as the almond farm is developed, for a total investment of $3.2 million.  "The Company's first international investment, which further diversifies our existing domestic agricultural platform, is expected to yield strong investment returns over the long term due to its access to an abundant supply of water for irrigation and its cost and logistical advantages versus other almond producing regions," said Carleton P. Erdman, President and Chief Executive Officer.. 

[bizaro86]

Hmm... this doesn't seem like good news to me. It seems like they have decided they want to be non-operating partners as opposed to royalty collectors, and I think that is a materially weaker model.

 

I also get concerned about the G&A these guys run (for a business that mostly doesn't have operations they have a lot of management). Having something in Portugal to go visit probably won't make the G&A go down.

[sarganaga]

Hmm... this doesn't seem like good news to me. It seems like they have decided they want to be non-operating partners as opposed to royalty collectors, and I think that is a materially weaker model.

 

I also get concerned about the G&A these guys run (for a business that mostly doesn't have operations they have a lot of management). Having something in Portugal to go visit probably won't make the G&A go down.

 

This is exactly what I though when I saw the press release & why I posted it. If they just collected the royalties & passed them through, shareholders most likely would be much better for it.

 

FWIW Their vice president of investments, Volha A. Hutyrchyk, who manages alternative investments as well as agriculture, lives in Escondido, which is in San Diego County in southern CA. Her cv from Pardeee's website https://www.pardee.com/volha-a-hutyrchyk/ indicates that she loves traveling.

[txvalue]

I like the business model of owning land and then finding multiple uses coal/O&G/timber. Then all you need to do is sit back and collect the cash.

 

It's early but the grape investment has not worked out and while the almond investment is small I too am concerned about the creep away from their original model. The last quarter was disappointing in both performance and share issuance.

[writser]

I'm a bit skeptical as well. Looks a bit like they want to move away from oil/gas in the long term, which might or might not be a good idea. However, I don't think that snapping up random assets all over the planet is the way to go. I didn't really like the grape farm acquisition but at least they bought hard property in the US. Leasing a tract in Portugal is a bit out of my comfort zone. Granted, it is with the same agricultural partner as the grape farms so it's not a completely random transaction. Though the grape farm investments haven't been exactly stellar so far either ..

 

In general I have been a bit disappointed with Pardee since buying it in 2014 or something. I get that performance has been mediocre due to low coal/gas/oil prices and I don't blame them for that. However, overhead costs are significant (especially size & compensation of the board) and I'm not sure I agree with the course of action the past few years. What's wrong with forest management & mineral rights?

[Spekulatius]

I'm a bit skeptical as well. Looks a bit like they want to move away from oil/gas in the long term, which might or might not be a good idea. However, I don't think that snapping up random assets all over the planet is the way to go. I didn't really like the grape farm acquisition but at least they bought hard property in the US. Leasing a tract in Portugal is a bit out of my comfort zone. Granted, it is with the same agricultural partner as the grape farms so it's not a completely random transaction. Though the grape farm investments haven't been exactly stellar so far either ..

 

In general I have been a bit disappointed with Pardee since buying it in 2014 or something. I get that performance has been mediocre due to low coal/gas/oil prices and I don't blame them for that. However, overhead costs are significant (especially size & compensation of the board) and I'm not sure I agree with the course of action the past few years. What's wrong with forest management & mineral rights?

 

I agree, the ventures into Grapes and Almonds seems like diworsification. I have a small position in it and consider shedding.

[Bartvp]

G&A is on the high side indeed, but let's give management the benefit of time for their latest investments based on their track record of smart investments

[writser]

G&A is on the high side indeed, but let's give management the benefit of time for their latest investments based on their track record of smart investments

 

For example, the Ponzi scheme they apparently invested in in 2015.

 

In December 2015, Pardee Resources Company (PDER) (the "Company") invested $7.7 million in a limited partnership that purchased mobile solar generators from DC Solar Solutions, Inc. ("DC Solar") and, in turn, leased the generators to DC Solar Distribution, Inc., an affiliate of DC Solar.  The Company recently learned through public sources that the government seized substantially all of the assets of DC Solar and its affiliates in December 2018.  DC Solar and its affiliates, including our lessee, subsequently filed for Chapter 11 bankruptcy protection in February 2019.  An affidavit from a Federal Bureau of Investigation special agent was filed in February 2019 asserting that DC Solar was operating a fraudulent "Ponzi-like scheme" and that a majority of the mobile solar generators sold to investors and a majority of the lease revenues claimed to have been received by DC Solar Distribution, Inc. may not have existed.

 

The Company is fully engaged in gathering additional information regarding this developing situation.  Currently, the extent to which the Company's partnership may be able to recover the related assets remains uncertain.  Although the Company currently is unable to determine the financial impact, if any, arising from this situation, it could be as much as its investment of $7.7 million.  In connection with this investment, the Company had previously recognized $5.6 million of renewable energy investment tax credits, as well as other tax benefits, part or all of which could be reversed.

 

At least they are now diversifying from Ponzi schemes into almond farms in Portugal ..

 

I like the business model of owning land and then finding multiple uses coal/O&G/timber. Then all you need to do is sit back and collect the cash. [..]

 

Wise words. I've been a shareholder for five years or something. I like the forest acreage, I like the market price but with low energy prices it seems like these guys feel compelled to burn money to justify the high SG&A. At what point should one decide to throw in the towel?