Reviewing a previous pick: Danier Leather (TSX:DL)
Here's an interesting business. Last year in May the company offered shareholders the option to tender their shares for $6.25. The stock has since gone on a tear in finishing up around $13-14 a share. The good news is that the company has been actively purchasing shares through a normal course issuer bid. The current normal course issuer bid will expire in May but I suspect the company will probably issue another one in the current year.
If this happens, this will be a great catalyst for the stock, and ultimately for shareholders.
As of Q1, the company has $9.3 million in cash. The current market cap of the business is $65.9 million.
Some of the risks of this company are that the industry is highly cyclical. For example most of the revenue the company makes are in the winter months. Between the April and September months, the cojavascript:void(0)mpany usually operates at a loss.
With a P/E of 12.59 it is slightly below the industry ratio of 18.9.
I like the fact that the company is actively repurchasing and canceling shares with their extra cash. Admittedly I would like to see them return some fo the cash to shareholders in the form of a special dividend. However at least they are making smart use of the cash by repurchasing shares.
If you look at the last 2 normal course issuer bids, the purchases have been very beneficial.
In the last year the stock has appreciated over 100%. In the year prior to that, their average purchase price for the issuer bid was $4.25. Seeing as the stock is currently over $14, I would say that was a very wise move.
Management appears to be very shareholder friendly.
Disclosure: Still: Long Danier Leather.
If this happens, this will be a great catalyst for the stock, and ultimately for shareholders.
As of Q1, the company has $9.3 million in cash. The current market cap of the business is $65.9 million.
Some of the risks of this company are that the industry is highly cyclical. For example most of the revenue the company makes are in the winter months. Between the April and September months, the cojavascript:void(0)mpany usually operates at a loss.
With a P/E of 12.59 it is slightly below the industry ratio of 18.9.
I like the fact that the company is actively repurchasing and canceling shares with their extra cash. Admittedly I would like to see them return some fo the cash to shareholders in the form of a special dividend. However at least they are making smart use of the cash by repurchasing shares.
If you look at the last 2 normal course issuer bids, the purchases have been very beneficial.
In the last year the stock has appreciated over 100%. In the year prior to that, their average purchase price for the issuer bid was $4.25. Seeing as the stock is currently over $14, I would say that was a very wise move.
Management appears to be very shareholder friendly.
Disclosure: Still: Long Danier Leather.
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