Canfor
As usual, Theo hit on a hot topic. There was an article (Related) today in the Globe & Mail about Canfor that may explain why few people want to invest in Canfor. The company recently dropped its poison pill, which, as Jarislowsky points out, opens the company up to a creeping takeover.
As a bit of background for those of you unfamiliar with the actors involved and investing in Canada, Stephen Jarislowsky is a well-respected Canadian fund manager. Jim Pattison is a BC investor who is famous for his hard-nosed style. The Canadian securities industry does not have a strong tradition of protecting minority shareholders. There have been some efforts in the recent past to rectify this, but generally speaking, the insiders have a huge advantage. This is especially true where founding families are concerned.
If I interpret this article correctly, there will be an upcoming battle for control of the company with Pattison, a NY Hedge Fund and the founding family on one side, and Jarislowsky and the other minority shareholders on the other. With the poison pill gone, the minority shareholders don't stand a chance. I don't care how much value there is in the company. The odds of a minority shareholder reaping the rewards are fairly slim.
For now, I'll pass on Canfor. If anybody can provide me with a good reason to buy the company I'm all ears.
Suntzu
As usual, Theo hit on a hot topic. There was an article (Related) today in the Globe & Mail about Canfor that may explain why few people want to invest in Canfor. The company recently dropped its poison pill, which, as Jarislowsky points out, opens the company up to a creeping takeover.
As a bit of background for those of you unfamiliar with the actors involved and investing in Canada, Stephen Jarislowsky is a well-respected Canadian fund manager. Jim Pattison is a BC investor who is famous for his hard-nosed style. The Canadian securities industry does not have a strong tradition of protecting minority shareholders. There have been some efforts in the recent past to rectify this, but generally speaking, the insiders have a huge advantage. This is especially true where founding families are concerned.
If I interpret this article correctly, there will be an upcoming battle for control of the company with Pattison, a NY Hedge Fund and the founding family on one side, and Jarislowsky and the other minority shareholders on the other. With the poison pill gone, the minority shareholders don't stand a chance. I don't care how much value there is in the company. The odds of a minority shareholder reaping the rewards are fairly slim.
For now, I'll pass on Canfor. If anybody can provide me with a good reason to buy the company I'm all ears.
Suntzu
RE: Canfor (Related)
Suntzu:
I don't agree with that. Marty Whitman of Third Avenue is a value investor who has made a living from distressed stocks and turnarounds. Third Avenue bought their shares in the open market at around current prices and the only way for them to make money is for the common shares to go up. Therefore, minority shareholders will benefit buying today. Furthermore, I don't understand why a company would want to take a poison pill when the stock is so undervalued, and has been for so long. Why not be acquired?
As for the value, Canfor received $1 billion cash from the softwood lumber ordeal. Seems like this could be a classic net asset value play with activist shareholders. But I'm not going to spend any more time thinking about the matter because I don't want to own the stock. Actually, I don't want to be in that sector.
-theo
I don't agree with that. Marty Whitman of Third Avenue is a value investor who has made a living from distressed stocks and turnarounds. Third Avenue bought their shares in the open market at around current prices and the only way for them to make money is for the common shares to go up. Therefore, minority shareholders will benefit buying today. Furthermore, I don't understand why a company would want to take a poison pill when the stock is so undervalued, and has been for so long. Why not be acquired?
As for the value, Canfor received $1 billion cash from the softwood lumber ordeal. Seems like this could be a classic net asset value play with activist shareholders. But I'm not going to spend any more time thinking about the matter because I don't want to own the stock. Actually, I don't want to be in that sector.
-theo
Recent comments
P/Peak E (Related)
2 hours 47 min agoRE: Foolish game (Related)
7 hours 44 min agosmtkr,Thanks for clarifying (Related)
8 hours 33 min agoIncorrect (Related)
8 hours 51 min agoFoolish game ? (Related)
9 hours 22 min agoWhen I attended the (Related)
11 hours 1 min agoRE: Canfor (Related)
1 day 2 hours agoSold some stocks today. (Related)
3 days 2 hours agoRE: minco (Related)
3 days 5 hours agoCanfor! (Related)
3 days 5 hours ago
2 hours 47 min agoRE: Foolish game (Related)
7 hours 44 min agosmtkr,Thanks for clarifying (Related)
8 hours 33 min agoIncorrect (Related)
8 hours 51 min agoFoolish game ? (Related)
9 hours 22 min agoWhen I attended the (Related)
11 hours 1 min agoRE: Canfor (Related)
1 day 2 hours agoSold some stocks today. (Related)
3 days 2 hours agoRE: minco (Related)
3 days 5 hours agoCanfor! (Related)
3 days 5 hours ago
Right Ads 2
Active forum topics
Categories
News (Related) (11)
Stocks (Related) (552)
Bonds (Related) (1)
Books (Related) (11)
Commodities (Related) (30)
Currencies (Related) (5)
Income Trusts (Related)
Mutual Funds (Related) (22)
Other (Related) (25)
Stocks (Related) (552)
Bonds (Related) (1)
Books (Related) (11)
Commodities (Related) (30)
Currencies (Related) (5)
Income Trusts (Related)
Mutual Funds (Related) (22)
Other (Related) (25)
No comments:
Post a Comment