In my mind, the share price of Churchill is ready to explode. The balance sheet is fantastic and improving - it can't remain secret for much longer.
I agree with Gulo that it is in management's best interest to keep the share price low so they can keep granting themselves options, but I think the secret is going to get out and the stock is going to run.
1. No Debt!
"The Churchill Corporation is pleased to announce that it has accelerated the full repayment of the loan it borrowed in 1997 to finance the repurchase of all of its preferred shares and cancellation of one-half of its common shares. The funds used to retire the loan were generated from the strong profits achieved during the last two years. As a result, Churchill has no debt outstanding."
2. Management views the shares as undervalued.
"The Exchange has accepted a Notice of Intention from Churchill Corporation (The) to make a Normal Course Issuer Bid to purchase the following:
up to 520,000 of its Common Shares, being 5% of the Common Shares issued and outstanding as of January 5, 2000."
3. $1.50 stock generates revenues of $20 per share.
"The Churchill Corporation is a western Canadian commercial and industrial
construction corporation with annual revenue in excess of $200 million.
Churchill shares are listed on The Toronto Stock Exchange under the trading
symbol ``CUQ'."
4. Fully diluted EPS of at least .23 to be announced this month (minimal PE of 6.5)
Their nine month results were .18 and they expect the fourth quarter to be higher than .05 (last year's results).
"Churchill also announces that it now anticipates that its pre-tax
earnings during its fiscal year ended December 31, 1999 will be significantly
higher than the pre-tax earnings achieved in 1998, as a result of project
gains realized in the fourth quarter."
5. A TSE listing brings more credibility when an IR campaign starts.
"The Churchill Corporation today announced that the listing of its common shares has been approved by The Toronto Stock Exchange"
6. They are sitting on $2 per share in cash
Anyone interested in buying $2 bills for $1.50? They have liabilities obviously, but they are planning an aggressive acquisition strategy which should drive up earnings and diversify the risk traditionally associated with construction.
"The Churchill Corporation announces the appointment of Bill McKenzie, MBA, CFA to its executive management team asVice President, Corporate Development and Corporate Secretary. Mr. McKenziewill be responsible for corporate development, investor relations, mergers andacquisitions, and corporate secretarial matters. Mr. McKenzie holds a MBAfrom Harvard Business School and designations as a Chartered Financial Analystand a Certified Management Accountant. Mr. McKenzie is familiar withChurchill, having served as a member of the Churchill Board since 1991. Mr.McKenzie has 15 years of executive experience in mergers and acquisitions andcorporate finance with a leading western Canadian merchant bank."
7. Management is worried about a hostile takeover at these cheap prices
"Churchill also announces that, subject to shareholder and regulatory approvals, it has extended its current Shareholder Rights Plan to September 30, 2004." |
