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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: FIFO_kid2 who wrote (66493)	2/9/2021 8:18:21 PM
From: E_K_S	Respond to of 78814

Re: RFP Yes EBITDA is positive all five years I looked at. Good point on the underfunded pension liability. I noticed that CFX.TO also did a restructure in 2019 so I suspect 2019 was a difficult year for all paper/pulp companies. I need to dig down into CFX.TO on their pension liabilities but not sure what is required in Canada and/or if their US subsidiaries have separate programs. ---------------------------------------------- The value proposition can get blown out of the water w/ these (1) restructuring expenses Management says one time but usually more, (2) unfunded pension liabilities and (3) a restatement of asset values (typically in oil reserves). In the case of these timber companies, their BV assets (for their trees) may/could be understated because of rising commodity prices. So a good asset to hold if/when inflation heats up. The other thing, is there is always a back story to provide color on the company's financials. RFP story is interesting but I do not like unfunded pension liabilities. I thought in a BK, the pension liabilities go away and/or get transferred to that US agency. Perhaps each BK is different and a fixed amount is transferred to the new entity. Many of the legacy companies have these pension obligations. Good overview of the specifics for RFP. EKS

To: FIFO_kid2 who wrote (66493)	2/10/2021 2:16:44 PM
From: bruwin	Read Replies (1) \| Respond to of 78814

" ... still remains a perception the book value* of the company was always overstated after its bankruptcy restructuring ... "* Well, IMO, that's the problem with the "Book Value" assessment of a company. After all, "Book Value", and more particularly Tangible Book Value, is supposed to be what the Shareholders can expect to receive when the company is Liquidated. But who knows whether or not that will actually be the case when the Assets are finally "auctioned" off or sold. And then we have that old adage of "buying something for 50c that's worth a dollar" ...... Well, in the "BV Overlay" that I previously presented, we see in ... Mid-2018, BV = ~$17/share, Price = ~$10, so paying 50c for something that's worth 85c June 2019, BV = ~$14/share, Price = ~$6, so paying 50c for something that's worth $1.17c January 2020, BV = ~$14/share, Price = ~$4, so paying 50c for something that's worth $1.75c. But in all of those instances one didn't see a reasonable upward price move because of the influence of the Buyers taking advantage of the BV - Share Price differential. It appeared to take a change in the relevant Bottom Line performance of the company to get Buyers interested and to thereby move the share price upward. Looks like the influence of Financial Fundamental performance tends to outweigh an assessment of "Liquidated Value" comparison to current share price ? No doubt you've done a fairly in-depth analysis of the company and have studied several possible scenarios going forward, so I suspect you've done your planning as to what to do when a particular outcome starts to look likely to occur .....