jason Posted January 31, 2015 Share Posted January 31, 2015 One of my major concerns for Holloway is that there is a tremendous amount of leverage and if there are low occupancy rates in the Alberta properties I have no idea where the income is going to come from to make the payments? I do believe Holloway is a solid company but not in this oil massacring market right now. Link to comment Share on other sites More sharing options...
bbarberayr Posted January 31, 2015 Share Posted January 31, 2015 An insider bought 1M Holloway shares @ $5.25 (out of 19.3M shares outstanding). There was no press release from CKI so I assume it's not them. A buy back by HLC? We will know soon enough. Where do you see this? I can't find it on Sedi or CanadianInsider? Link to comment Share on other sites More sharing options...
EliG Posted January 31, 2015 Share Posted January 31, 2015 An insider bought 1M Holloway shares @ $5.25 (out of 19.3M shares outstanding). There was no press release from CKI so I assume it's not them. A buy back by HLC? We will know soon enough. Where do you see this? I can't find it on Sedi or CanadianInsider? TSX posts the insider trades around 7PM EST. The page updates daily: http://www.tmxmoney.com/HttpController?GetPage=SearchInsiderTrade&QuerySymbol=HLC I misread the transaction yesterday. It was a trade between two insiders. It could be just a change in the nature of ownership for one insider. Link to comment Share on other sites More sharing options...
bbarberayr Posted January 31, 2015 Share Posted January 31, 2015 One of my major concerns for Holloway is that there is a tremendous amount of leverage and if there are low occupancy rates in the Alberta properties I have no idea where the income is going to come from to make the payments? I do believe Holloway is a solid company but not in this oil massacring market right now. I think of all the larger public hotel companies (INN.UN, TPH, HLC) in Canada, HLC is the best positioned. It has lowest debt/gross book value and lowest payout ratios and, given HLC's near-death experience with their convertibles, they are running the business understanding the cycles in lodging and that you can't pay out all cash flow in the good times. Michael Rapps is doing a really good job of monetizing assets and the purchase of Royal Host, for not much more than their debt, was smart as it diversified their portfolio away from Western Canada, given what has happened with oil and is giving them better economies of scale. There is higher risk now as around 60% of their income comes from Alberta, PC and the Territories, but the stock has dropped 20% since November, so at least some of this is priced in. Higher risk TPH, which has too-high debt and probably a too high payout ratio, even after their recent dividend cut, is down well over 50% since September, but is acting like things are fine with a new Normal Course Issuer Bid, so maybe things aren't that bad out there. If you take a look at Guy Gottfried from Rational Investment's presentation - http://www.valuewalk.com/2014/09/guy-gottfried-radar-underfollowed-gems/ or the company presentation - http://www.hlcorp.ca/documents/media/HLC%20Corporate%20Presentation%20-%20FINAL.pdf you get a good feel for the value here. But, I guess the big unknown is how the drop in oil price is affecting their business. The Q4 earnings report will give some indication, but probably not a good one as the oil patch capital cuts and project cancellations are really more a 2015 thing. The last hotel cycle saw many companies get into big financial trouble. Companies like Holloway, Lakeview, etc. almost or did go bankrupt. People realized the REIT approach of paying out all income was a poor one for the lodging industry and hopefully will get through this better. The other thing is that the hotel downturn we saw mid-last decade was the worst since the depression in the US, and very bad here, so my expectation is HLC, in particular, will get through any downturn well. Link to comment Share on other sites More sharing options...
rohitc99 Posted January 31, 2015 Share Posted January 31, 2015 One of my major concerns for Holloway is that there is a tremendous amount of leverage and if there are low occupancy rates in the Alberta properties I have no idea where the income is going to come from to make the payments? I do believe Holloway is a solid company but not in this oil massacring market right now. pg 16 of Nov 14 corporate presentation shows the following debt schedule 2015 : 10 Mn (entire amount is mortgage) 2016 : 31 Mn (around 15 Mn is mortgage) pg 12 shows proforma AFFO for the last 12 months = 15 Mn or so In addition, pg 19 management has indicated the following reduce leverage ~ Sell select hotels and non-income producing assets and use proceeds to repay high-cost debt. recent news points to same happening already : http://www.hlcorp.ca/documents/CN/TRENTONSALEFINAL.pdf. ~ Sell hotels with low cap rates and reinvest proceed s in higher cap rate hotel So it appears even if the AFFO were to get cut in half which would be worst scenario considering that Alberta now accounts for 41% of the NOI, the company would have a short fall of 25 Mn which can covered via refinancing the debt or selling some of assets. Looks like HLC can survive for the next 1-2 years till the macro picture improves Link to comment Share on other sites More sharing options...
rohitc99 Posted February 1, 2015 Share Posted February 1, 2015 correction to my post - as uncommonprofits as pointed out in an earlier analysis, alberta seems to be around 21%. so anything lesser than 41% should reduce the risk further Link to comment Share on other sites More sharing options...
kab60 Posted February 1, 2015 Share Posted February 1, 2015 I just spent 10 minutes looking up their Alberta Hotels on Tripadvisor. Most people, when they do a review, tell why they've been staying in the hotels. Most people have stayed at HLC hotels because of business (461 "business" reviews), while less than half have stayed as "families, couples or alone" (380 reviews). Data here (beware of errors): https://docs.google.com/spreadsheets/d/13IqdzDmO-pZJb2b6_FQj_6vHdxwZyhOxvsFuD6bPAXA/edit#gid=0 I'm long HLC, not sure what to conclude other than that they have business which is not only O&G related. Link to comment Share on other sites More sharing options...
kab60 Posted February 1, 2015 Share Posted February 1, 2015 Not sure how much of the O&G activities in Alberta is oil sands vs. conventional drilling, but it doesn't seem like things have slowed all that much down (yet, atleast). So I expect a good Q4. This is a one week old review: "Checked in late in the day looking for simply a place to get some sleep. The front desk personnel were very friendly and helpful. The room was clean, and the bed very comfortable. The beds and TV appeared to be fairly new. The room price was high (based on other cities I have travelled to), however with the oil industry still thriving in the area, $200 was the average price in the area. Although the room was comfortable, it was a basic room, and anywhere else, the rate would not have been a good value." (link: http://www.tripadvisor.dk/Hotel_Review-g154916-d240634-Reviews-BEST_WESTERN_Grande_Prairie_Hotel_Suites-Grande_Prairie_Alberta.html) Other than selling the Ramada hotel, they also started buying back some of their debentures. Management seems to be doing the right things. Link to comment Share on other sites More sharing options...
bbarberayr Posted February 1, 2015 Share Posted February 1, 2015 They also internalized management back in December. One time cost ws $1 million, but saving $1 million a year going forward: http://www.newswire.ca/en/story/1460753/holloway-lodging-corp-announces-internalization-of-all-hotel-management And this is from their Q3 earnings - a bit long, but shows their emphasis on cost managemenbt: From an operating perspective, we have accomplished a lot to date. On a non-financial level, we have adjusted our middle management and sales team staffing levels, streamlined our purchasing, capital expenditure and reporting processes and generated much excitement among our on-the-ground personnel about what the combined company is capable of achieving. From a financial perspective, we have already consolidated several larger suppliers, insurance policies and benefit plans and realized meaningful cost savings on a run-rate basis. We have also adjusted staffing levels, commenced energy efficiency upgrades at all Royal Host properties and settled more than a dozen property tax appeals, all of which will reduce our cost structure going forward. The positive financial impact from the vast majority of these actions is not yet reflected in our results. Management is currently engaged in its 2015 budget process and we believe material improvements in the performance of many Royal Host hotels is possible; this will come from all of the areas identified above as well as by concentrating on labour productivity, rate management and targeted investments in our properties. From a balance sheet perspective, it is worth noting that on closing the Royal Host acquisition, Holloway assumed approximately $15.0 million of debt under Royal Host’s credit line. At September 30, 2014 this had been reduced to $7.1 million. This reduction was funded almost entirely from cash flow from operations and is evidence of the cash flow generating power of Holloway today. Holloway’s priorities for the remainder of 2014 and early 2015 will be to (1) fully integrate Royal Host into Holloway, (2) continue to deleverage either by reducing our debt or by selling assets at low cap rates (high valuations) and reinvesting the proceeds in high cap rate properties (low valuations), (3) refinance certain of our mortgages in order to take advantage of the low interest rate environment and extend our debt maturity profile, (4) sell certain non-core assets (particularly excess land holdings that do not have material development potential), (5) continue to grow the Travelodge® franchise business, and (6) strategically invest in certain of our hotel properties. Link to comment Share on other sites More sharing options...
kab60 Posted February 2, 2015 Share Posted February 2, 2015 Maybe we should start a Holloway thread? Company just acquired a new hotel for $8.2m, so obviously they don't seem too worried about leverage. http://www.newswire.ca/en/story/1480515/holloway-lodging-corp-announces-acquisition-of-hotel-in-whitehorse-yukon Seems to have decent reviews: http://www.tripadvisor.dk/Hotel_Review-g155047-d183416-Reviews-Ramada_Whitehorse_Hotel-Whitehorse_Yukon.html - less than 1/3 of the reviews done by people who stayed because of "business". Link to comment Share on other sites More sharing options...
Hielko Posted February 2, 2015 Share Posted February 2, 2015 An 11.5% cap rate sounds pretty good to me. Link to comment Share on other sites More sharing options...
cubsfan Posted February 5, 2015 Share Posted February 5, 2015 I like seeing what Holloway is doing: http://finance.yahoo.com/news/holloway-lodging-corp-announces-sale-123900492.html The sale price for the hotel was $13.0 million representing a cap rate of approximately 2.6%. Holloway estimates that it will record a gain on sale of $2.0 million in the first quarter of 2015 and does not anticipate paying any tax on the sale of this property. Holloway intends to deploy the sale proceeds to debt reduction and new hotel acquisitions. "Since acquiring Royal Host we have sold two hotels that generated aggregate asset-level cash flow of approximately $315 thousand or 2% of Royal Host's total asset-level cash flow in 2014. We received gross sale proceeds of approximately $17 million from these asset sales representing approximately 11% of Royal Host's enterprise value at acquisition, so this has been a very good result to date." Link to comment Share on other sites More sharing options...
mcliu Posted February 5, 2015 Share Posted February 5, 2015 I wonder who's buying these little hotels at 2.6% cap rates. :o Link to comment Share on other sites More sharing options...
kab60 Posted February 5, 2015 Share Posted February 5, 2015 Great. I really like what this Michael Rapps is doing. Anyone have a guess on their Frontier investment thesis? Other than liquidation. :) Link to comment Share on other sites More sharing options...
LesPaul Posted February 5, 2015 Share Posted February 5, 2015 I believe that hotel is near Pearson Airport. Its the busiest airport in Canada so I'm sure the buyer has some plans... regardless, nice moves lately HLC! TVK Q1 coming out soon. Interested to learn more about it. Link to comment Share on other sites More sharing options...
EliG Posted February 11, 2015 Share Posted February 11, 2015 TerraVest Q1 2015 http://web.tmxmoney.com/article.php?newsid=73414058&qm_symbol=TVK Link to comment Share on other sites More sharing options...
LesPaul Posted February 13, 2015 Share Posted February 13, 2015 TerraVest Q1 2015 http://web.tmxmoney.com/article.php?newsid=73414058&qm_symbol=TVK Also - TerraVest announces retirement of CEO 12 Feb 2015 - ACQUIREMEDIA VEGREVILLE, AB, Feb. 12, 2015 /CNW Telbec/ - TerraVest Capital Inc. ("TerraVest" or the "Company") (TSX: TVK) a manufacturer of fuel containment and pressure vessels as well as an oil field service provider announced today that Dale Laniuk is retiring as President and CEO of Terravest. Mr. Laniuk has been with Company since its inception and has been instrumental in building Terravest. "Over the last several years Terravest has undergone a significant turnaround. I am proud of where we stand today, and remain a dedicated board member and 22% shareholder. The Company is well positioned for continued success and I am excited to step away from some of the day-to-day activities and take on a more strategic role at the board level." said Mr. Laniuk. TerraVest has been preparing for Mr. Laniuk's retirement and has had a transition plan in place since Mr. Charles Pellerin was appointed Executive Chairman of TerraVest in June of 2014. In addition, Mr. Laniuk will continue to contribute in a strategic role as part of a new executive committee formed at the board level consisting of Mr. Laniuk, Charles Pellerin and Dustin Haw. Link to comment Share on other sites More sharing options...
EliG Posted February 19, 2015 Share Posted February 19, 2015 Clarke keeps accumulating Northern Frontier. They now own 18.7% of the outstanding common shares. http://web.tmxmoney.com/article.php?newsid=73567179&qm_symbol=CKI Link to comment Share on other sites More sharing options...
LesPaul Posted February 19, 2015 Share Posted February 19, 2015 Clarke keeps accumulating Northern Frontier. They now own 18.7% of the outstanding common shares. http://web.tmxmoney.com/article.php?newsid=73567179&qm_symbol=CKI And with that - Northern Frontier Adopts Shareholder Rights Plan 2 hours ago - ACQUIREMEDIA CALGARY, ALBERTA--(Marketwired - Feb. 19, 2015) - Northern Frontier Corp. (TSX VENTURE:FFF) (the "Corporation" or "Northern Frontier") today announced that at a regularly scheduled meeting its Board of Directors has adopted a shareholder rights plan (the "Rights Plan"). The Rights Plan will be submitted to shareholders of Northern Frontier ("Shareholders") at the next annual and special meeting of shareholders scheduled for June 3, 2015 (the "Meeting"). A copy of the agreement establishing the Rights Plan will be available by accessing the Corporation's profile on SEDAR at www.sedar.com. The Rights Plan is similar to other shareholder rights plans adopted by Canadian publicly listed companies. The Rights Plan is intended to ensure that in the context of an unsolicited take-over proposal for the common shares of the Corporation, the Board of Directors has sufficient time to explore and develop strategic alternatives that are in the best interests of the Corporation. The Rights Plan also seeks to ensure the fair treatment of Shareholders and to provide them with adequate time to properly assess any potential take-over bid without undue pressure. The Rights Plan has not been adopted in response to, or in contemplation of, any specific proposal to acquire control of Northern Frontier. The Rights Plan is effective immediately although subject to acceptance by the TSX Venture Exchange and ratification by Shareholders at the Meeting. The Board of Directors has authorized the issuance of one right in respect of each common share of the Corporation outstanding at the close of business on February 18, 2015 and each share issued thereafter. The rights will become exercisable if a person, together with its affiliates, associates and joint actors, acquires or announces an intention to acquire beneficial ownership of common shares which, when aggregated with its current holdings, total 20 per cent or more of the outstanding common shares of the Corporation (determined in the manner set out in the Rights Plan). Following the acquisition of 20 per cent or more of the outstanding common shares, each right held by a person other than the acquiring person and its affiliates, associates and joint actors would, upon exercise, entitle the holder to purchase the common shares at a substantial discount to the market price of the common shares at that time. The Board has the discretion to defer the time at which the rights become exercisable to a later date determined by the Board and to waive the application of the Rights Plan or redeem the rights if the Board determines it is in the best interests of the Corporation to do so. The Rights Plan permits the acquisition of control of Northern Frontier through a "permitted bid", a "competing permitted bid" or a negotiated transaction. A permitted bid is one that, among other things, is made to all holders of common shares for all of their shares, is open for a minimum of 60 days and is subject to an irrevocable minimum tender condition of at least 50 per cent of the common shares held by independent Shareholders. About Northern Frontier Corp. Northern Frontier's strategic objective is to create a large industrial and environmental services business through a buy and build growth strategy. Currently, the Corporation provides civil construction and excavation services to the industrial industry, primarily in the in situ Oilsands region south of Fort McMurray, Alberta and bulk water and fluids transfer logistic services in western Canada. The Corporation's common shares and common share purchase warrants are listed on the TSX Venture Exchange under the trading symbols "FFF", "FFF.WT" and "FFF.WT.A". Source: http://www.marketwired.com/press-release/northern-frontier-corp-announces-grant-of-share-options-and-restricted-share-units-tsx-venture-fff-1993179.htm Link to comment Share on other sites More sharing options...
LesPaul Posted February 23, 2015 Share Posted February 23, 2015 Clarke Inc. Reports 2014 Year End Results, Quarterly Dividend Declaration and a 51% Increase in Book Value per Share: http://www.newswire.ca/en/story/1491709/clarke-inc-reports-2014-year-end-results-quarterly-dividend-declaration-and-a-51-increase-in-book-value-per-share Link to comment Share on other sites More sharing options...
EliG Posted February 24, 2015 Share Posted February 24, 2015 Clarke Inc. Reports 2014 Year End Results, Quarterly Dividend Declaration and a 51% Increase in Book Value per Share: http://www.newswire.ca/en/story/1491709/clarke-inc-reports-2014-year-end-results-quarterly-dividend-declaration-and-a-51-increase-in-book-value-per-share BV dropped $0.42 from the end of Q3: $12.99 to $12.57. Spyglass is responsible for the bulk of the drop: $0.36/share. Link to comment Share on other sites More sharing options...
bbarberayr Posted February 24, 2015 Share Posted February 24, 2015 Looks like they are going after distressed energy assets this year. Could be a great idea and I think they have a lot of the people, financing and experience in place to make it happen: "Energy Basket: Following the precipitous decline in oil prices in the fourth quarter, we started to acquire select securities of companies engaged in the oil and gas business. There are many marginal operators in the oil and gas industry that will not (or at least ought not to) survive the present downturn; these companies may have acquired marginal properties, paid too high a price for mediocre properties, operated with too high a cost structure or borrowed too heavily. We believe there may be opportunities to acquire these companies at very depressed prices and assist in their restructuring. There are also several fundamentally good companies with solid balance sheets and business models that are being valued at distressed prices even though they are not distressed; investing in these companies is compelling" Link to comment Share on other sites More sharing options...
writser Posted February 24, 2015 Share Posted February 24, 2015 Apart from that I didn't see any shocking news in the latest annual. Nevertheless I like what they are doing and bought a bit more this year. l have value/share pegged at around $13.50. As long as they keep returning cash to shareholders (either through the NCIB or through dividends) intrinsic value will increase and the discount should narrow at some point. Interesting tidbit from the earnings press release: Finally, we continue to view our Common Shares as undervalued. As long as this situation exists, we will continue to repurchase our Common Shares as it is the equivalent of buying a dollar for a fraction of that amount. We repurchased 1,243,846 Common Shares under our normal course issuer bid ("NCIB") in 2014 and 665,330 shares under our SIB in early 2015, all at a discount to our book value per share. Link to comment Share on other sites More sharing options...
EliG Posted February 25, 2015 Share Posted February 25, 2015 Fourth quarter revenue decreased as a result of a decrease in the value of the Company’s portfolio of publicly-traded securities and realized losses incurred on the sale of investments. Net realized and unrealized losses on investments for the fourth quarter of 2014 were $9.4 million compared to gains of $14.3 million for the same period in 2013. The Company had a loss from continuing operations of $6.4 million in the fourth quarter of 2014 compared to income of $15.4 in the same period in 2013. This again was largely driven by the increase in realized losses on investments during the period which is discussed above under the “Investment segment”. Did they sell Spyglass in Q4? To the best of my knowledge, that's the only place where sizable realized losses could come from. I'm disappointed they swept Spyglass under the rug. The report doesn't mention it once, even though it was a material holding at some point. Link to comment Share on other sites More sharing options...
bbarberayr Posted February 25, 2015 Share Posted February 25, 2015 I think SGL is now included in their "Energy Securities" as well as the purchase of FFF. The financials say realized and unrealized losses, so SGL would count as an unrealized loss. Link to comment Share on other sites More sharing options...
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