permabear Posted May 6, 2015 Share Posted May 6, 2015 They own or have equity interests in 4,244 hotel rooms across Canada, 41% of which are located in Alberta. 21% of their rooms are located in Fort Mac, AB. In 2014, 61% of their NOI was generated in Alberta. Management of the hotels is outsourced to the CEO/largest owner's private company. EV of $733m or $173k per key (they paid $187k/key for the portfolio). Dividend payout of well over 100%. NOI in 2015 will not be sufficient to pay dividend (even after it was reduced ~45% in January). Management says they will rely on upward refinancing of their properties to pay for regular loan amortizations. The cost of their portfolio divided by total debt is 77%. The stock is up almost 50% in the last 4 days. I have no idea why. I have not seen any news, insider buying, etc. Any ideas? EDIT: for the record, this is a SHORT idea! Link to comment Share on other sites More sharing options...
permabear Posted May 6, 2015 Author Share Posted May 6, 2015 Well, I guess I can answer my question: Morguard announced this morning they went over 10% ownership in Temple, buying at an average price of $3.50/sh since mid-November. Link to comment Share on other sites More sharing options...
Myth465 Posted May 6, 2015 Share Posted May 6, 2015 I liked this idea at $2. Very cheap Though it just came down to Holloway levels, and Holloway is a much better company. Link to comment Share on other sites More sharing options...
permabear Posted May 7, 2015 Author Share Posted May 7, 2015 What do you mean by 'came down to Holloway levels'? I think HLC is significantly cheaper regardless of TPH's share price (see below) and I agree that it is better run. Looking at EV, HLC is $94k/room vs. TPH at $174k. Even if you wipe out all TPH equity, debtholders' claims total $142k/room - still much more expensive than HLC. On a cap rate basis, HLC earned $32m in 2014 including only 5 months of RYL earnings. On a pro forma basis, HLC should do $40m NOI, which would imply a cap rate of 10.7% (NOI / EV). TPH did $58m NOI in 2014 and trades at a 7.9% cap rate. At $2/TPH share, that's an 8.5% cap. At $0/TPH share, that's 9.7% cap... still not as attractive as HLC! Am I missing something here? Link to comment Share on other sites More sharing options...
permabear Posted May 26, 2015 Author Share Posted May 26, 2015 Shareholder who sold three hotels for TPH shares in 2013 just went activist: http://www.newswire.ca/en/story/1543111/centennial-group-announces-campaign-for-immediate-change-at-temple-hotels-inc-nominates-five-highly-qualified-independent-directors-to-the-board-of-te Link to comment Share on other sites More sharing options...
DavidVY Posted May 26, 2015 Share Posted May 26, 2015 How does this compares to Civeo? Which would you prefer and why? Link to comment Share on other sites More sharing options...
permabear Posted May 26, 2015 Author Share Posted May 26, 2015 Civeo is much more levered to oil&gas/mining than Temple as they provide workforce accommodation. I think Temple is a short candidate and would stay away from Civeo too as it is highly levered and its assets are not adequately diversified. I would choose Holloway over Temple and Black Diamond Group over Civeo. Link to comment Share on other sites More sharing options...
longlake95 Posted December 24, 2015 Share Posted December 24, 2015 Morguard has finally dislodged Arni and the gang....good news all around. Stock up +25% yesterday. MRC now nows 40% or so of TPH. Id like to see MRC fold TPH into MRC.U. Link to comment Share on other sites More sharing options...
permabear Posted January 22, 2016 Author Share Posted January 22, 2016 Just for the record, I started this topic on May 6th calling a short on TPH @ $3.25, today it is trading at $0.86, or a 74% decline. I agree Morguard will clean up the company, now that they have taken control, but I don't know what that means for shareholders. The company remains highly levered and shareholders could face continuing dilution. Link to comment Share on other sites More sharing options...
sculpin Posted January 22, 2016 Share Posted January 22, 2016 Just for the record, I started this topic on May 6th calling a short on TPH @ $3.25, today it is trading at $0.86, or a 74% decline. I agree Morguard will clean up the company, now that they have taken control, but I don't know what that means for shareholders. The company remains highly levered and shareholders could face continuing dilution. Good call. Morguard guys are smart. They have been buying the equity all the way down. Probably time to investigate this as a long opportunity but only if we have seen the lows for oil in this cycle. Link to comment Share on other sites More sharing options...
permabear Posted January 22, 2016 Author Share Posted January 22, 2016 Just for the record, I started this topic on May 6th calling a short on TPH @ $3.25, today it is trading at $0.86, or a 74% decline. I agree Morguard will clean up the company, now that they have taken control, but I don't know what that means for shareholders. The company remains highly levered and shareholders could face continuing dilution. Good call. Morguard guys are smart. They have been buying the equity all the way down. Probably time to investigate this as a long opportunity but only if we have seen the lows for oil in this cycle. Check out Holloway (TSX:HLC). Much more reasonably priced, less leverage, better diversified (away from oil & gas), stable management and operations. One of if not the cheapest hotel company in Canada. Link to comment Share on other sites More sharing options...
arcube Posted January 22, 2016 Share Posted January 22, 2016 Just for the record, I started this topic on May 6th calling a short on TPH @ $3.25, today it is trading at $0.86, or a 74% decline. I agree Morguard will clean up the company, now that they have taken control, but I don't know what that means for shareholders. The company remains highly levered and shareholders could face continuing dilution. Hello Permabear - Do you have a rough idea of TPH's exposure to O&G based occupancy in Alberta. Thank you. Link to comment Share on other sites More sharing options...
permabear Posted January 22, 2016 Author Share Posted January 22, 2016 They own or have equity interests in 4,244 hotel rooms across Canada, 41% of which are located in Alberta. 21% of their rooms are located in Fort Mac, AB. In 2014, 61% of their NOI was generated in Alberta. Link to comment Share on other sites More sharing options...
arcube Posted January 22, 2016 Share Posted January 22, 2016 They own or have equity interests in 4,244 hotel rooms across Canada, 41% of which are located in Alberta. 21% of their rooms are located in Fort Mac, AB. In 2014, 61% of their NOI was generated in Alberta. This is helpful. Thanks. I believe not everything in AB is O&G related. AB has a small non-O&G economy as well? If I read your comment correctly, you are saying it's a 100% O&G exposure. I know places like Fort Mac are usually O&G but was thinking what else do they service? Thanks again. Link to comment Share on other sites More sharing options...
bizaro86 Posted January 22, 2016 Share Posted January 22, 2016 They own or have equity interests in 4,244 hotel rooms across Canada, 41% of which are located in Alberta. 21% of their rooms are located in Fort Mac, AB. In 2014, 61% of their NOI was generated in Alberta. This is helpful. Thanks. I believe not everything in AB is O&G related. AB has a small non-O&G economy as well? If I read your comment correctly, you are saying it's a 100% O&G exposure. I know places like Fort Mac are usually O&G but was thinking what else do they service? Thanks again. Fort Mac is basically the end of the road. If there was no oil there you'd have a few people doing forestry things, and service industries for the local native tribes, but the place would be 20-25X too big. Link to comment Share on other sites More sharing options...
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