I have had an investment in Gendis for about 1.5 yrs as a value play. The company is directly involved in the Canadian retail market (Saan stores). Most of the value of the company however is in oil and gas. The company made an investment in Chauvco (at a cost to the company of 10$ CAN). Chauvco has since had its North American assets bought by Pioneer Natural Resources (PXD) for (.45-.49 shares). This is valued at about 25-26$Can to Chauvco, and about 86.7% of that to each share of Gendis (Gendis owns .867 shares of Chauvco / GDS share). Chauvco however gets to keep non NA assets in a separate spin-off - these are valued at about 5$ Can. The net benefit to Gendis is about 26$/share. They also own a smaller oil ang Gas asset, and recently their retail business turned profitable - it is estimated their retail business could be worth over 5$ Can/sh (this could potentially be much more if they could string a few profitable retail quarters - after their recent restructuring).
The net value of GDS is about 36$/Share - taking tax considerations into account (40% taxation on their capital gains), the company would still be worth 27.6$Can.
The stock had a significant move today up 1.75 to 22.75, on the higherst volume in at least 3 yrs. However the stock remains undervalued at about 80% of its breakup value.
Any opinions would be welcomed. |
