May 12, 2014

Toronto Star

Is Torstar even cheaper now with the sale of Harelquin?  Saj Karsan over at Barel Karsan certainly thinks so.

There are some remaining concerns we have even with the recently proposed sale:

  • Torstar debt levels are really high
  • Print/Newspaper revenues are in decline 
  • What will management do with the newly acquired cash?  They hinted at paying off the debt but what if they don't use the money wisely?  Hopefully they don't invest more in print!
That said, Harlequin will sell for 455 million, Torstar debt is 178 million, some quick math will reveal that 277 million in net cash.

Here's some quick numbers:

At today's stock price of 7.53, the market cap is approximatey 600 million.
Pre-Harlequin announcement, the stock price was around 6.50 which valued the market cap at 517 million.

The sale of Harlequin (pending approval) will add 277 million in net cash, yet the market cap of TS has only risen by 85 million.

Does the market believe that Torstar will squander the net cash and just burn right through it?

Or is there not much faith in the underlying business?  

Couple that with the fact that Torstar calls me once every 3 months for a free subscription to their print edition leads me to believe that they are very much desperate for readership.

Some food for thought.

May 9, 2014

What I'm Reading This Week (May 9, 2014)

Here's what we're reading over at Canadian Dollars:

Albert Eintein's Timeless Advice for Investors:

 “If I had an hour to solve a problem and my life depended on it, I would use the first 55 minutes determining the proper question to ask, for once I knew the proper question, I could solve the problem in less than five minutes.” - Albert Einstein

Safal Niveshak offers these 5 Things to Avoid in the Current Stock Market.  Extremely humbling and a friendly reminder in a market that contains high valuations.

We still believe that Microsoft (MSFT) offers a great margin of safety and are very pleased with their push into the Cloud.  Under the new leadership of the new CEO, we believe that a lot of the ground work is in place to revitalize the company.

We highly recommend reading Modern Graham's Microsoft Quarterly Valuation.

January 18, 2011

New stock additions to my TFSA (Tax Free Savings Account)

Last year I was able to beat the TSX and DOW with my portfolio. The total return was about 25%. Not bad. I treated the portfolio very conservatively last year by purchasing a lot of solid dividend companies like Shaw Communications (SJR.B) and Utilities company Emera (EMA). I expect these companies to be held year over year and indefinitely as they can be easily DRIP'ed.

Now that another year has begun, I have another $5000 to play with. At the moment I am focusing on deep value net-net type of companies. With the Canadian dollar currently trading higher than the United States dollar, it makes purchasing stocks on the Nasdaq and NYSE that much more cheaper for me.

As there are no restrictions on what stocks can be placed inside a TFSA, I have added a few companies in the portfolio.

Without further ado, these are the stocks that I've added since the new year:

VVTV (ValueVision Media)
GRVY (Gravity Co Ltd)
CCME (China Media Express Holdings)
SOLR (GT Solar International)

In the coming weeks I will write the value argument for each of these stocks.

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