Conor, what do you think the catalyst is for Dole to find ground? At end of Feb/March it looked like the company was going to get the respect you were looking for only to get slapped down to lows where it continues to dance around... The Salad recall is impacting the 2022 numbers but you would hope it is priced in now...
I think there are a number of things that need to (and will) happen to drive re-rating:
1. Dole reporting several quarters of clean GAAP numbers (rather than PF), allowing analysts a clearer view of financial performance without the messy accounting from the TP/Dole Food merger in the reported numbers
2. Greater familiarity with management by analyst community - I'm amazed how many investors/commentators still think this is Murdock's company; it is Total Produce management running the company, and they have an excellent track record - their competency should become clear in subsequent quarters this year
3. Input cost inflation is confirmed as being offset by price increases as agreed with customers already in the coming quarters' reporting.
4. Further dividend increase and/or share buy-back in time
Hi Connor - thanks for the continued work on these names.
Q - why do you like YCA vs the Sprott tracker? I get that YCA trades at a discount to NAV ... but there's nothing to say that this will ever go to par, even if the price keeps tracking the spot upwards ... with the Sprott tracker you don't have that consideration, though you may pay a few % premium on most days.
On the discount with YCA, I think this reflects two things:
1. Perceived political risk around Kazatomprom relationship & option agreement - this is a misplaced concern in my view, given that the lbs owned by YCA to date are not at risk, as owned and stored in secure facilities in Canada and France.
2. Pricing in of future price volatility for physical uranium - again I think the volatility is skewed to the upside so I see discounting on this basis as misguided.
On YCA vs. Sprott, I think YCA is a cleaner structure should a utility want to take YCA private at a future date in order to secure supply (and paying a large premium to do so) - I don't believe the Sprott is as efficient for this type of catalyst/event.
Thank you (and apologies for the delayed response). I hadn't thought about the 'some desperate utility buying YCA' scenario. I am not sure how likely that is either, but there is some optionality in that which does have value!
Great blog, wonderful writing and clarity in your ideas. 3 questions if I may: 1.How do you think your experience in PE influence the way you see the market/ideas differs from an amateur? 2.What would you add to your analysis if you were a professional fund manager? 3. I would be interesting to see how you will size your positions.
Hey, great job! As a commods guy, I am amazed by the upside in PANR. What do you think about regulatory risks there? Seems Pantheon has everything they need for the near term works, but how about for doing the “big thing”?
Regarding reg risk for PANR, I don't really see anything material- its in a favourable jurisdiction, in a proven location and where the State of Alaska would benefit from PANR's assets being commercialised.
The "big thing" here is a sale of the company to a major at a significant premium (a multiple in my view) of the current market cap once assets have been proved out (which I expect the will be).
Hey, thank you for your reply! I suppose you are saying that the company has all the permit they need for their current activities while anything sizeable and complicated permit-wise would be the matter of the acquirer?
Conor, what do you think the catalyst is for Dole to find ground? At end of Feb/March it looked like the company was going to get the respect you were looking for only to get slapped down to lows where it continues to dance around... The Salad recall is impacting the 2022 numbers but you would hope it is priced in now...
I think there are a number of things that need to (and will) happen to drive re-rating:
1. Dole reporting several quarters of clean GAAP numbers (rather than PF), allowing analysts a clearer view of financial performance without the messy accounting from the TP/Dole Food merger in the reported numbers
2. Greater familiarity with management by analyst community - I'm amazed how many investors/commentators still think this is Murdock's company; it is Total Produce management running the company, and they have an excellent track record - their competency should become clear in subsequent quarters this year
3. Input cost inflation is confirmed as being offset by price increases as agreed with customers already in the coming quarters' reporting.
4. Further dividend increase and/or share buy-back in time
What's your take on vertu motors currently?
Optically very cheap, potentially interesting.
More and more people are talking about gold having reached an inflection point, do you have any views on this (as you're involved in other metals)?
I think gold remains interesting given how I see the persistence of negative real rates. Hard to know if its at an inflection point just yet.
Hi Connor - thanks for the continued work on these names.
Q - why do you like YCA vs the Sprott tracker? I get that YCA trades at a discount to NAV ... but there's nothing to say that this will ever go to par, even if the price keeps tracking the spot upwards ... with the Sprott tracker you don't have that consideration, though you may pay a few % premium on most days.
Just curious ...
Thanks!
Hi Sunrider, thanks for reading and commenting.
On the discount with YCA, I think this reflects two things:
1. Perceived political risk around Kazatomprom relationship & option agreement - this is a misplaced concern in my view, given that the lbs owned by YCA to date are not at risk, as owned and stored in secure facilities in Canada and France.
2. Pricing in of future price volatility for physical uranium - again I think the volatility is skewed to the upside so I see discounting on this basis as misguided.
On YCA vs. Sprott, I think YCA is a cleaner structure should a utility want to take YCA private at a future date in order to secure supply (and paying a large premium to do so) - I don't believe the Sprott is as efficient for this type of catalyst/event.
Hi Connor
Thank you (and apologies for the delayed response). I hadn't thought about the 'some desperate utility buying YCA' scenario. I am not sure how likely that is either, but there is some optionality in that which does have value!
Great blog, wonderful writing and clarity in your ideas. 3 questions if I may: 1.How do you think your experience in PE influence the way you see the market/ideas differs from an amateur? 2.What would you add to your analysis if you were a professional fund manager? 3. I would be interesting to see how you will size your positions.
Hey, great job! As a commods guy, I am amazed by the upside in PANR. What do you think about regulatory risks there? Seems Pantheon has everything they need for the near term works, but how about for doing the “big thing”?
Hi there, thanks for reading and commenting.
Regarding reg risk for PANR, I don't really see anything material- its in a favourable jurisdiction, in a proven location and where the State of Alaska would benefit from PANR's assets being commercialised.
The "big thing" here is a sale of the company to a major at a significant premium (a multiple in my view) of the current market cap once assets have been proved out (which I expect the will be).
Hey, thank you for your reply! I suppose you are saying that the company has all the permit they need for their current activities while anything sizeable and complicated permit-wise would be the matter of the acquirer?
Yes, correct.