Foreign Tuffett Posted December 20, 2017 Share Posted December 20, 2017 Retail Holdings has sold off somewhat in the last several days. My model is showing that it's now trading at a ~30% discount to NAV, which IMO is a good entry point ahead of the $9 special dividend. Link to comment Share on other sites More sharing options...
_JJ_ Posted December 20, 2017 Share Posted December 20, 2017 Thanks for the reminder. I updated my spreadsheet too and bought back some shares I sold when the NAV discount had almost closed in October. Looks attractive now. Link to comment Share on other sites More sharing options...
writser Posted December 20, 2017 Share Posted December 20, 2017 Retail Holdings has sold off somewhat in the last several days. My model is showing that it's now trading at a ~30% discount to NAV, which IMO is a good entry point ahead of the $9 special dividend. How are you valuing the non-remittance shares? Link to comment Share on other sites More sharing options...
Foreign Tuffett Posted December 20, 2017 Share Posted December 20, 2017 Retail Holdings has sold off somewhat in the last several days. My model is showing that it's now trading at a ~30% discount to NAV, which IMO is a good entry point ahead of the $9 special dividend. How are you valuing the non-remittance shares? At a 1/3 discount to the normal Singer Bangladesh shares. This # is somewhat picked out of the air. That said, I think the discount is still attractive even if you discount these shares by 1/2. My base case is that, while it will probably cost them a pound of flesh to do so, they'll eventually be able to sell the shares and get the cash out of Bangladesh. Link to comment Share on other sites More sharing options...
_JJ_ Posted December 20, 2017 Share Posted December 20, 2017 I have it at 19% discount, 30% after $9 dividend Link to comment Share on other sites More sharing options...
Foreign Tuffett Posted December 20, 2017 Share Posted December 20, 2017 I have it at 19% discount, 30% after $9 dividend I think the latter % is the best way to look at the situation.....unless: (1) your cost of capital threshold is ridiculously high and/or (2) you have some reason to believe that the dividend won't be paid in full or on time and/or (3) you will have to pay taxes on the dividend Link to comment Share on other sites More sharing options...
writser Posted December 20, 2017 Share Posted December 20, 2017 Ok, the 30% was pro forma, that makes sense. I was a bit confused as to how you'd get there. Link to comment Share on other sites More sharing options...
Foreign Tuffett Posted December 21, 2017 Share Posted December 21, 2017 I'm not one to usually pay attention to this sort of thing....and I hate to keep beating a dead horse....but RHDGF trading volume has been quite high this week considering the lack of news. Today ~62K shares traded, that's nearly 8X the average daily trading volume. Also, someone let some shares go for $18.62 a few days ago. Odd. I wonder if someone is in a hurry to exit their position before the end of the year? Link to comment Share on other sites More sharing options...
Foreign Tuffett Posted December 28, 2017 Share Posted December 28, 2017 In case anyone's wondering what's behind the jump back up to ~$21 yesterday: https://seekingalpha.com/article/4134106-retail-holdings-still-undervalued-one-favorite-ideas-2018 Link to comment Share on other sites More sharing options...
701 LV Posted January 4, 2018 Share Posted January 4, 2018 Shouldn't this be trading down w/ the ex-div date yesterday? Link to comment Share on other sites More sharing options...
Foreign Tuffett Posted January 4, 2018 Share Posted January 4, 2018 Shouldn't this be trading down w/ the ex-div date yesterday? I believe the ex-dividend date is today (Jan. 4th). Link to comment Share on other sites More sharing options...
701 LV Posted January 4, 2018 Share Posted January 4, 2018 Looks like I wasn't the only one confused...company just released a new PR. https://seekingalpha.com/pr/17038308-retail-holdings-n-v-distribution-payment-date "Shareholders of record on the record date, January 4, 2018, who sell their Shares prior to the ex‑distribution date, January 11, 2018, will not receive the $9.00 cash distribution." Link to comment Share on other sites More sharing options...
wabuffo Posted January 4, 2018 Share Posted January 4, 2018 Shouldn't this be trading down w/ the ex-div date yesterday? Generally when distributions are greater than 25% of the share price, a due-bills situation occurs where the shares go x-div after the pay date (and not the record date). In fact, on the OTC market (where many liquidating companies trade), its FINRA that sets the x-date. You can check this on the OTC daily sheet as FINRA publishes its trading rules with respect to distributions soon after the announcement by the Company. It can cause some confusion as even the Company and its transfer agent sometimes are unaware that FINRA makes the final decision (and not the Company/transfer agent). wabuffo Link to comment Share on other sites More sharing options...
benchmark Posted January 4, 2018 Share Posted January 4, 2018 Looks like I wasn't the only one confused...company just released a new PR. https://seekingalpha.com/pr/17038308-retail-holdings-n-v-distribution-payment-date "Shareholders of record on the record date, January 4, 2018, who sell their Shares prior to the ex‑distribution date, January 11, 2018, will not receive the $9.00 cash distribution." Does this mean that if one buys shares today (Jan. 4th) or anytime before Jan 9th (assuming 2-day settlement), one still gets the $9 distribution? Link to comment Share on other sites More sharing options...
wabuffo Posted January 4, 2018 Share Posted January 4, 2018 Does this mean that if one buys shares today (Jan. 4th) or anytime before Jan 9th (assuming 2-day settlement), one still gets the $9 distribution? According to FINRA, RHDGF's first day of trading without the distribution is at the open on Jan. 11th. http://otce.finra.org/DailyList Plug in Oct 19th, 2017 (distribution announcement date) and ticker symbol (RHDGF) and then click on details for the official ex-date/time. Hope this helps, wabuffo Link to comment Share on other sites More sharing options...
benchmark Posted January 4, 2018 Share Posted January 4, 2018 Does this mean that if one buys shares today (Jan. 4th) or anytime before Jan 9th (assuming 2-day settlement), one still gets the $9 distribution? According to FINRA, RHDGF's first day of trading without the distribution is at the open on Jan. 11th. http://otce.finra.org/DailyList Plug in Oct 19th, 2017 (distribution announcement date) and ticker symbol (RHDGF) and then click on details for the official ex-date/time. Hope this helps, wabuffo Thanks. Then what does the record date of Jan. 4th mean in "Shareholders of record on the record date, January 4, 2018" ? Link to comment Share on other sites More sharing options...
wabuffo Posted January 5, 2018 Share Posted January 5, 2018 Thanks. Then what does the record date of Jan. 4th mean in "Shareholders of record on the record date, January 4, 2018" ? There is a difference between record keeping by the transfer agent and record keeping by the exchange in the case of a due-bills situation (dividend > 25% of the recent market price). The transfer agent uses the Jan. 4 record date to finalize the distribution of the $9 payment to shareholders of record as of the record date. But this situation creates an extra layer of shareholder ownership bookkeeping that does not involve RHDGF or its transfer agent. This is because it is a due-bills situation which creates a temporary promissory note that attaches to the shares. Thus, the sellers of the stock owe the dividend to the buyers of the stock throughout the period from the record date to the ex-date. The Company and its transfer agent do not set this date nor control the process. The ex-date is set by FINRA per the daily list. Since most stock is held in "street form", the FINRA members' back offices handle the bookkeeping of trades after the record date and settle the final remittance of cash to the holders as of FINRA's ex-date in order to settle this promissory note. But it applies to owners of the certificates as well. Why the second level of bookkeeping in the case of a due-bills situation? I'm not sure but it may have to do with the handling of margin by back offices and trying to minimize the effect of a large "temporary" drop in share price while awaiting an offsetting large cash inflow to the account without triggering a margin call. But I could be wrong about this. If you think its complicated, I have found that even the back-offices of the various brokers like E-Trade and TDAmeritrade get confused as well. Especially in the case where you buy within the period between the record date and the ex-date. I've seen brokers put the cash in the account and then pull it back, or the cash never shows up at all. What follows is phone conversations with broker front-line CS people who look up the record date and attempt to explain that you are not entitled to the dividend. After time spent explaining FINRA's daily lists, and the mechanics of due-bills situations eventually the cash shows up. Worse, situations like this also create confusion between buyers and sellers. Sometimes, a seller (thinking that they own the dividend in a due-bills situation) and not seeing the price reduction they expected assume that they can sell the stock at what they think is an artificially high price and still keep the dividend (in effect, taking advantage of "suckers"). The market price may even wobble in between the old price and the new, pro-forma price as buyers and sellers are uncertain on how to price the stock. It's an arcane area of the market and really should be cleaned up by the exchanges so that there is never any confusion about ownership of the dividend/distribution in these rare types of situations. Sorry for the long answer to your short question. I hope that wasn't too confusing. wabuffo Link to comment Share on other sites More sharing options...
samwise Posted January 5, 2018 Share Posted January 5, 2018 Hello, Any Canadian investors in this (or other liquidations like FUR or NYRT)? Does anyone have experience with the tax implications of the dividends? Even though they are return of capital, does the CRA still tax them as normal income at your marginal rate? See here for an example where the CRA does this: https://www.taxtips.ca/personaltax/investing/taxtreatment/mutualfunds.htm Link to comment Share on other sites More sharing options...
benchmark Posted January 5, 2018 Share Posted January 5, 2018 Thanks. Then what does the record date of Jan. 4th mean in "Shareholders of record on the record date, January 4, 2018" ? There is a difference between record keeping by the transfer agent and record keeping by the exchange in the case of a due-bills situation (dividend > 25% of the recent market price). The transfer agent uses the Jan. 4 record date to finalize the distribution of the $9 payment to shareholders of record as of the record date. But this situation creates an extra layer of shareholder ownership bookkeeping that does not involve RHDGF or its transfer agent. This is because it is a due-bills situation which creates a temporary promissory note that attaches to the shares. Thus, the sellers of the stock owe the dividend to the buyers of the stock throughout the period from the record date to the ex-date. The Company and its transfer agent do not set this date nor control the process. The ex-date is set by FINRA per the daily list. Since most stock is held in "street form", the FINRA members' back offices handle the bookkeeping of trades after the record date and settle the final remittance of cash to the holders as of FINRA's ex-date in order to settle this promissory note. But it applies to owners of the certificates as well. Why the second level of bookkeeping in the case of a due-bills situation? I'm not sure but it may have to do with the handling of margin by back offices and trying to minimize the effect of a large "temporary" drop in share price while awaiting an offsetting large cash inflow to the account without triggering a margin call. But I could be wrong about this. If you think its complicated, I have found that even the back-offices of the various brokers like E-Trade and TDAmeritrade get confused as well. Especially in the case where you buy within the period between the record date and the ex-date. I've seen brokers put the cash in the account and then pull it back, or the cash never shows up at all. What follows is phone conversations with broker front-line CS people who look up the record date and attempt to explain that you are not entitled to the dividend. After time spent explaining FINRA's daily lists, and the mechanics of due-bills situations eventually the cash shows up. Worse, situations like this also create confusion between buyers and sellers. Sometimes, a seller (thinking that they own the dividend in a due-bills situation) and not seeing the price reduction they expected assume that they can sell the stock at what they think is an artificially high price and still keep the dividend (in effect, taking advantage of "suckers"). The market price may even wobble in between the old price and the new, pro-forma price as buyers and sellers are uncertain on how to price the stock. It's an arcane area of the market and really should be cleaned up by the exchanges so that there is never any confusion about ownership of the dividend/distribution in these rare types of situations. Sorry for the long answer to your short question. I hope that wasn't too confusing. wabuffo This is very helpful, thanks. One more follow-up question, is this 'due-bills' scenario very different from the normal dividend record date and ex-dividend date definition? Link to comment Share on other sites More sharing options...
701 LV Posted January 11, 2018 Share Posted January 11, 2018 Glad to see the strong price movement the day after the dividend payment. Link to comment Share on other sites More sharing options...
writser Posted April 5, 2018 Share Posted April 5, 2018 AR 2017: http://www.retailholdings.com/disclosureStatements/disclosureStatementsFile_119.pdf The target timetable to commence the Company’s ultimate liquidation is in one to two years. Discount has shrunk a lot the past year so it's not as attractive as it once was. Nevertheless you still get the non-remittance Bangladesh shares basically for free, if they manage to solve that challenge then shareholders should do well. I still own a few shares. Link to comment Share on other sites More sharing options...
Mondegreen Posted May 3, 2018 Share Posted May 3, 2018 Does anyone know what might have been behind the sell off yesterday? Link to comment Share on other sites More sharing options...
writser Posted July 12, 2018 Share Posted July 12, 2018 Stock has drifted down during the year but IV hasn't really changed. As per my calculations RHDGF is now trading at a low double-digit discount to NAV - even when marking down the Bangladesh non-remittance shares to zero. Another small distribution is upcoming this fall and I expect a larger one next spring. Management wants to commence liquidating in 1-2 years. If they resolve the Bangladesh situation in a favorable way this is a slam-dunk, if not you'll probably still do fine. I bought back some shares the past few days. Link to comment Share on other sites More sharing options...
Foreign Tuffett Posted July 12, 2018 Share Posted July 12, 2018 Stock has drifted down during the year but IV hasn't really changed. As per my calculations RHDGF is now trading at a low double-digit discount to NAV - even when marking down the Bangladesh non-remittance shares to zero. Another small distribution is upcoming this fall and I expect a larger one next spring. Management wants to commence liquidating in 1-2 years. If they resolve the Bangladesh situation in a favorable way this is a slam-dunk, if not you'll probably still do fine. I bought back some shares the past few days. Thanks for the heads-up on a name that had somewhat fallen off my radar. After updating my model, I agree that it looks quite attractive here. Singer Bangladesh looks to be performing well and recently paid a 10 taka per share dividend. RHDGF should have received just north of $5 million (in USD) Link to comment Share on other sites More sharing options...
Foreign Tuffett Posted August 13, 2018 Share Posted August 13, 2018 1H 2018 report is up. http://www.retailholdings.com/annual-and-periodic-reports.html Looks like $RHDGF will be exercising its Sri Lankan put option in the near future: "Investments consist of 35,562,883 shares of Singer (Sri Lanka) PLC, not included as part of the Sri Lanka share sale that took place in September 2017. These shares represent approximately 9.5% of that company’s total outstanding shares. The Company has the right to put these shares to Hayleys PLC in the period September 15 -December 15, 2018 for a total consideration of approximately $10.3 million. The comparable market price of the shares at June 30, 2018 was $7.8 million." Link to comment Share on other sites More sharing options...
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