Tag Archives: URB

June 2021 Update – $CSW/A.to, $OSS.v, $PSD.to, $IDG.to, $STC.v, $MCB.to, $MTLO.v, $SVT, $FXC.to, $URB/A.to

Happy Canada Day to my fella Canadians and Happy Independence Day to my friends south of the border.

TIKR

I use TIKR to quickly look through ideas and check comparable companies. Would recommend. Referral code below.

https://app.tikr.com/register?ref=smob7c

Thoughts on Market Activity

Really nothing new to report here. There is a still a debate on whether or not the spike is transitory or not. I don’t know. That’s it. Most commodities have rolled over to some degree, except oil and nat gas which have been strong. It will be interesting to see how long or to what degree we reopen if there is still 25-30% of adults with vaccine hesitancy.

Looking at my portfolio at the moment… I am looking to reduce the amount of companies I hold. I have too many small positions that are somewhat distracting given how much they will move the needle.

What I’m Reading

Deep Work by Cal Newport

I really enjoyed this book and have been trying a few suggestions from the book. I have been scheduling my day in 30 min blocks that consist of either shallow and deep work. I have also removed much of my presence from social media. At least, I don’t check my Twitter timeline, but I will continue to utilize and check my DMs. I’ll give it a try for a month or so and see how it goes.

I also like to read books on parenting and relationships. Message me if you’re interested.

Posts this month

Developments on Companies Mentioned

  • Corby Spirit and Wine Limited – $CSW/A.to & $CSW/B.to
    • Lawsuit filed against them
      • Lawsuit filed on black discoloration near the warehouse
      • They stopped managing the warehouse june 30, 2020
  • OneSoft Solutions – $OSS.v
    • New teaming agreement
      • First from Worley via Advisian
      • First in Australia
      • Began trials in March 2020
      • I found this interesting from the PR
        • Hossein Khalilpasha, Advisian Principal Integrity Engineer and Asset Integrity Lead stated, “The case studies we performed demonstrated that our analysis of clients’ data using CIM with machine learning is not only more accurate, much faster and less costly for clients, but also provides state-of-the-art 3D visualization of pipeline data that empowers engineers to surface and contextualize pipeline conditions and threats that legacy integrity management systems and processes used today do not rival.”
  • Pulse Seismic – $PSD.to
    • Burgundy has been selling shares
      • Sold 360k shares
      • Still own 5.2 mil shares or 9.7%
  • Indigo Books & Music – $IDG.to
    • Reported annual results
      • Really hard to judge the business given the lockdowns in place throughout the year
    • CEO bought about 440k worth of stock at these prices
    • Though the business has proved resilient, the business does not attract me at these prices and I will not be updating it moving forward.
  • Sangoma Technologies Corp – $STC.v
    • CEO made a couple of small purchases during the sell off
  • McCoy Global – $MCB.to
    • Announced the formation of a special committee after AGM
      • I view this as positive
      • I think if they shopped this investor deck around outside O&G and an existing business they would have gotten a substantially higher valuation
  • Martello Technologies Group Inc – $MTLO.v
    • Reported fiscal Q4 2021
      • Market didn’t like it
      • Hit by fx
      • Rev up yoy with GSX acquisition
      • Adj ebitda worse yoy
      • Sounds like they have lots of promise in the future
      • Still monitoring
  • Servotronics – $SVT
    • Lawsuit filed against the CEO and the Ontario Knife Company
      • CEO has been placed on administrative leave
      • Gotta love microcaps
  • FAX Capital – $FXC.to
    • Announced the renewal of NCIB
      • Up to 1.5 mil shares or 10%
      • Daily limit of 14,758 shares
    • Investment in BioSyent
      • They own just over 2mil shares or 16.69% of the common
  • Urbana Corp – $URB/A.to

Hope everyone is having a wonderful summer and gets vaccinated.

Dean

1 Comment

Filed under Company Updates

April 2021 Update – $OSS.v, $REPH, $ISDR, $PSD.to, $ISV.to, $FTG.to, $XTC.to, $RELL, $MTLO.v, $DWSN, $SVT, $URB/A.to

TIKR

I use TIKR to quickly look through ideas and check comparable companies. Would recommend. Referral code below.

https://app.tikr.com/register?ref=smob7c

Thoughts on Market Activity

This month seen a bounce in the markets to some degree. Hearing more and more mention of inflation on conference calls from companies and some larger companies have implemented cost increases due to rising input costs. I am not a macro guy but thinking about how a business will perform with higher input costs feels more prudent than ever. There seems to be a big disconnect on what I hear on Twitter vs. how the indexes are performing. I do consistently hear “it’s a tough market for microcaps” and “these aren’t getting the attention they deserve”. It seems to be a story of what worked in 2020 isn’t working in 2021. Is it a temporary phenomenon or something longer lasting I’m not sure.

On a personal note, my portfolio has been treading water for a few months. Keeping up with the Russel YTD will have to be good enough. I have been deploying into more and more smaller bets as some companies have reached large portions of the portfolio and not sure if the valuations warrant very large positions. This will make it harder to substantially outperform by a wide margin but could lead to less volatility. Also, I’m expecting that the churn in positions will lead me to underperform in the short term.

Posts this month

Developments on Companies Mentioned

  • OneSoft Solutions – $OSS.v
    • Announced another client
      • Nice to see some continued traction
  • Recro Pharma – $REPH
  • Issuer Direct – $ISDR
    • Announced a 1% pledge
      • I like the concept and how ISDR is an entity that gives back to the community
  • Pulse Seismic – $PSD.to
    • Reported Q1 2021 and held AGM
      • 3.8 mil in sales in April
      • They have now booked 77% of the entire year of 2020 rev (although depressed) in the first 4 months
      • I have tried hard to purchase additional shares, but the share price has run away from me
  • Information Services Corp – $ISV.to
    • Filed a shelf prospectus to raise up to 200mil over the next 25 months
      • Interesting development and something to monitor
  • Firan Technology – $FTG.to
    • Reported fiscal Q1 2021
      • Results were impacted by covid from a demand and operational standpoint
      • Trading quite cheap based on trailing numbers with some uncertainty with commercial aerospace returning
  • Exco Technologies – $XTC.to
    • Reported fiscal Q2
      • Results were above my expectations and outlook given was strong
  • Richardson Electronics – $RELL
    • Reported Fiscal Q3
      • Things are looking positive
      • Trading at about NCAV
  • Martello Technologies Group Inc – $MTLO.v
  • Dawson Geophysical – $DWSN
    • Adopted a shareholder rights plan
      • Expires in 2022
      • Not a fan
  • Servotronics – $SVT
    • Released 10-K
      • Not a ton of details that we don’t already know
      • Revs down 10% in 2020
        • ATG down 16% as they are tied to commercial aviation
      • CPG up 34% as they shipped more units
    • Still interesting to follow
  • Urbana Corp – $URB/A.to
    • NAV is slowly creeping up

The author is long $OSS.v, $ISDR, $PSD.to, $URB/A.to

2 Comments

Filed under Company Updates

URBANA Corp – $URB.to & $URB/A.to

Another two weeks since posting…. a couple started but I don’t think they are good enough to publish yet.

Another very simple idea. Hat tip to DD for the help and data collection.

I originally posted about Urbana 10 years ago here in March of 2011. I ended up selling about 6 months later and posted about it here. Originally, I was overly attracted to the discount to NAV. I don’t believe I appreciated the growth potential in NAV on a per share basis.

Background

Price – $2.99

Shares – 44.2 mil

Market Cap – $134mil CAD

Here is URB/A vs. the TSX over the last 5 years

Urbana Corporation is an investment fund launched and managed by Caldwell Investment Management Ltd. For its equity investment the fund primarily invests in public equity markets of United States and Canada. The fund primarily focuses on U.S. financial companies and Canadian resource companies for equity investments. The fund also focuses on private equity investments.

Private company and start-up investments are usually vetted by the board and generally at arm’s length from Urbana.

Fund Perf

When looking at the performance of the fund, I am thinking about the growth in NAV. Despite the fees and annual dividend, the NAV has grown at quicker pace than the TSX. Below is the average performance in NAV growth.

Discount to NAV

Despite the performance the, shares are trading near the largest discount to NAV in the last 15 years.

Share Structure

There are two classes of shares. 10 mil voting/common shares and 38.9 mil class A or non-voting shares. The share repurchases are from the A shares. There is more liquidity in the A class shares.

They have bought back about half the shares since 2009.

Ownership

As mentioned the Caldwell family owns the majority of the voting shares.

EdgePoint has been selling some class A shares. This could weigh on the shares, but they could also arrange a block trade and buyback the shares.

Portfolio

Portfolio as of March 12, 2021

They are fairly concentrated. The largest 5 public equities make up 34% of assets. The top 5 private investments make up 32% of assets. The largest holding is the Canadian Securities Exchange at 13% of assets. They have had the position for many years and Brendan Caldwell is on the board. The CSE recently announced record trading volume and capital raised in Jan 2021. The marked value of their holdings was recently raised in 2020.

Mineral Properties

The company has a some mineral claims that are carried at zero value. There are 44 claims for 2,852.7 acres. So far, they have not commented on if/when this claim will be crystalized. The last time there was an update was in 2017.

Pros

  • Continue to buy back shares at a discount to NAV.
  • Pays an annual dividend. If the dividend is maintained it yields just over 3%.
  • The Caldwell family about $18 mil worth of the company and should be incentivized to have the shares perform.
  • Potential value in mineral properties.

Cons

  • There is a 2% investment and advisory fee (used to be 1.5%).
  • Dual class share structure.
  • Private investments may not be liquid and can be subjected to judgement by management.

As mentioned, simple idea. I’m comfortable parking some cash here in the A shares. Not a huge position, but enough to move the needle if it runs one way or another.

For those interested, you can hear the Chair & CEO share his thoughts on an audio podcast here.

Am I the only one holding some URB/A?

Thanks,

Dean

*the author is long URB/A

5 Comments

Filed under Company Analysis