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CKI - Clarke Inc.


jm25

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First post but I've followed the thread since page one.

 

I am interested to see what happens with the cash stockpile. Although the share price has rewound back to that of late May - I feel that the larger cash hoard + leaving Sherrit is a better place to be then they were at the time.

 

HLC appears attractive and Supremex has looked strong lately too, although I do not know what to make of the share price today. Perhaps investors who saw this as a short-term play have taken healthy profits off the table, or have stopped following the case; however, I like to remind myself that management isn't in this as a 6 month play. I don't mind receiving an honest dividend while this works out further.

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Jun 20/14 Jun 19/14 Shnaider Family Trust Indirect Ownership Common Shares 16 - Disposition under a prospectus exemption -6,231,194 $4.50

 

I wonder if these are the same shares. Perhaps they bought via a proxy.

Interesting stuff.

 

Cash is no longer an issue. Also after owning 40% of it, the loan is less of an issue as well.

I sold Clarke down to a 2% position and bought some Partners REIT and Hollloway.

 

http://www.stockhouse.com/news/press-releases/2014/08/14/clarke-inc-announces-increased-investment-in-holloway-lodging-corporation

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Guest Quebec

Yep, this must be the big Holloway stake sold by Schnaider/Midland. It's now in Clarke's hands. I'm very happy about that. So Clarke alone has about 31M$ shares, 18M$ debs and 16M$ loans into this promising Holloway bet. The cash is being put to work! Clarke also have the opportunity to buy back some of its shares too, given its stock volatility. I am looking forward to an updated presentation...

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First post but I've followed the thread since page one.

 

I am interested to see what happens with the cash stockpile. Although the share price has rewound back to that of late May - I feel that the larger cash hoard + leaving Sherrit is a better place to be then they were at the time.

 

HLC appears attractive and Supremex has looked strong lately too, although I do not know what to make of the share price today. Perhaps investors who saw this as a short-term play have taken healthy profits off the table, or have stopped following the case; however, I like to remind myself that management isn't in this as a 6 month play. I don't mind receiving an honest dividend while this works out further.

 

Welcome LesPaul. I agree with everything you said there. Today we have more clarity on their plan for the cash.

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Myth, at the end of May you had a 30% position, at a price ~10% lower than were it is currently trading. You didn't like the Sherritt position and that's gone now as well. The way I see it arguably Clarke is in better shape with the share price more or less flat. What made you change your mind? Or was the plan simply to 'arbitrage' the upcoming earnings release and sell afterwards?

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Partners is looking to be a mistake. Thought the worse was behind them.

 

I didnt think Clarke had much horse power at current value with cash on hand. I sold at about 10% higher down to a 10% and trimmed that to a 2% position at prices right before the 5% pull back. I used the 8% to buy Partners and Holloway.

 

Little did I know Clarke would soon own Holloway.

I now like Clarke and Holloway very much. Will hold both and add overtime.

 

Per Canadian insider Clarke bought the Geosam position, but its still good I think. I believe they will create significant value with Holloway.

At current prices I would add to Holloway given I prefer it to the other Clarke holdings.

 

Still wondering who bought the Schnaider position, guessing there is more to the story....

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  • 3 weeks later...

Has anyone spent much time reading up on Terravest?  Starting to look interesting.  Developing into a much larger company after rolling Jerico into it, buying NWP, etc.  Significant dividend yield, currently good margin businesses (may be extremely cyclical and just seeing a top end margin #?).  Interesting to see the Jerico guy that Geosam/Clarke had at Jerico (Charles Pellerin - 39 years old) become exec. chairman at Jerico and a 38 year old take over CIO at Terravest. 

Interesting collection of company's, people, financials, etc.

Any input, scuttlebutt, etc. would be useful.

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Personally just waiting for an updated corp presentation. Nice to see another dividend too.

 

Can anyone explain the trading today? The stock appeared tocbe at 10.80 at 4pm close, but a significant number of trades appear to have been executed after 4pm at 10.20.

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Accumulating more shares at what is now the 9.90 range.

 

I admit that I do not fully comprehend the price action lately, but it gave me an opportunity to add to this holding significantly. I'm now at a 20% holding with Clarke.

 

An aside - this seeking alpha article provided some more info on Terravest:  http://seekingalpha.com/article/2514855-terravest-capital-a-cheap-mini-conglomerate

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Has anyone spent much time reading up on Terravest?  Starting to look interesting.  Developing into a much larger company after rolling Jerico into it, buying NWP, etc.  Significant dividend yield, currently good margin businesses (may be extremely cyclical and just seeing a top end margin #?).  Interesting to see the Jerico guy that Geosam/Clarke had at Jerico (Charles Pellerin - 39 years old) become exec. chairman at Jerico and a 38 year old take over CIO at Terravest. 

Interesting collection of company's, people, financials, etc.

Any input, scuttlebutt, etc. would be useful.

 

I've bought from NWP in the past as part of my day job. They were more expensive than some of the other vendors I had to choose from, but they had better delivery timelines. When I toured their shop, I found it clean, well organized, and I was generally impressed with the organization. However, if that is indicative of their normal pricing policy, they probably over earn in good times (when customers are scrambling for equipment) but get hurt in bad times as customers migrate to only using the lowest cost bidders.

 

Don't know if that helps or not.

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Alright, I've bought a small position in Clarke now too. The discount to book was too tempting to ignore, and the more I look into their holdings the more I like them. Looking forward to their next quarter numbers...

 

Welcome on board.

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Has anyone spent much time reading up on Terravest?  Starting to look interesting.  Developing into a much larger company after rolling Jerico into it, buying NWP, etc.  Significant dividend yield, currently good margin businesses (may be extremely cyclical and just seeing a top end margin #?).  Interesting to see the Jerico guy that Geosam/Clarke had at Jerico (Charles Pellerin - 39 years old) become exec. chairman at Jerico and a 38 year old take over CIO at Terravest. 

Interesting collection of company's, people, financials, etc.

Any input, scuttlebutt, etc. would be useful.

 

I've bought from NWP in the past as part of my day job. They were more expensive than some of the other vendors I had to choose from, but they had better delivery timelines. When I toured their shop, I found it clean, well organized, and I was generally impressed with the organization. However, if that is indicative of their normal pricing policy, they probably over earn in good times (when customers are scrambling for equipment) but get hurt in bad times as customers migrate to only using the lowest cost bidders.

 

Don't know if that helps or not.

 

Not a comment on what I think about CKI necessarily, but I love doing business with these types of companies during my day job. I always have a sinking feeling when my boss directs me to aim for the lowest cost supplier or whatever... those are usually the guys that aren't there when something goes wrong at 8PM on a Friday night. I can understand that no one wants to overpay and managers need to keep costs down, but I really do believe that being cheap can cost more in the long run.

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but I really do believe that being cheap can cost more in the long run.

 

In assessing service providers, we have this saying in our firm(something we have learnt from experience): "Be wary of the high cost associated with a low price"

 

One of those things that every boss I've ever had has told me, but very few have ever adhered too.

 

That aside, I hope the corporate presentation this week yields some new insights.

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Is anyone else picking up a few shares here?  Terravest has taken a bit of a beating recently, and of course Spyglass is down, but their portfolio seems pretty strong to me, and they're still likely sitting on about $35-$40M of cash to deploy as markets continue to swoon. ($77M quoted at end of Q2 less the $7M Terravest and $30M Holloway purchases.)

 

 

 

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I'm adding. I'd wager the move down has been the market over-weighting CKI's resource exposure, along with the fact that the entire TSX is down.

Any word on when the next presentation will be?  Next week?

 

That's what I'm thinking.  And Clarke is thinly traded, so it's been a good one to keep a low bid on. 

 

They unloaded all of their Sherritt position in Q2, Spyglass isn't a dominant part of their portfolio, and Terravest (certainly tied to the resource sector) is down around 5% since end of Q2.  On the other hand, Supremex is up a little, Holloway is up 33%, and they have a bunch of cash optionality. 

 

No idea on the date for the next presentation.  Just happy to have buying opportunities for now!

 

 

 

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  • 2 weeks later...

Clarke has been buying back recently.  Not much, because they're quite limited in what they can do per day.

 

I find the recent trading patterns to be very strange.  Lots of stuff up today, but CKI takes a dive down to $9.10 at one point.  The daily price spread seems to be very large.  I guess someone is liquidating a substantial position.  CKI's holdings have generally held up really well in the recent turmoil and (from what we know) they have cash to deploy.  Strange.

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Clarke has been buying back but not as much as they are allowed - today they updated the outstanding shares on their website to 19,708,591:

 

http://www.clarkeinc.com/stockinfo.aspx?un=2

 

Since the end of Q2 (~15 weeks, or ~ 75 market days) they've bought back  216,600 shares, or roughly 2,900 shares per day, which is only slightly more than half of what they can buy under their latest 5% Normal Course Issuer Bid [NCIB]:

 

http://www.clarkeinc.com/documents/CN/DRAFT_NCIB_Renewal_Press_Release_MAY2014.pdf

 

This is a bit strange as you'd expect them to be buying as much as possible at a significant discount to book, especially when the volume more or less allows them to buy comfortably (at full tilt they'd be buying 20-25% of the daily volume) .... I see two possible explanations as to why they are not buying as much:

 

1. They are roughly 80% done with their 5% NCIB after only 3.5 months ... if they cannot increase it, perhaps they are spreading out their buying hoping for a larger discount; or

 

2. Armoyan has even better uses for the cash now that the market has taken a hit, and the Canadian Oilsands are being mauled.

 

Would love to get input on this from you guys ...

 

Q3 report should be out around Nov 7th (Q2 was on August 7th), but since that's a Friday, it may spill over into the second week of November.

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