Q: Good morning!
I do realise this is a high risk company, and that they are selling off hotels trying to get their financial situation improved.
However, they just reported completion of an NCIB ending December 2025, where they actually purchased about 10% of their float. They have renewed the NCIBsame for the next year. That to me is interesting, suggesting that they do actually believe their current stock price is lower than it should be. Can you have a look and let me know your thoughts about what might be the future prospects for them? ... Thanks! Paul K
I do realise this is a high risk company, and that they are selling off hotels trying to get their financial situation improved.
However, they just reported completion of an NCIB ending December 2025, where they actually purchased about 10% of their float. They have renewed the NCIBsame for the next year. That to me is interesting, suggesting that they do actually believe their current stock price is lower than it should be. Can you have a look and let me know your thoughts about what might be the future prospects for them? ... Thanks! Paul K
5i Research Answer:
The NCIB is a positive sign. Many companies have buybacks in place but do not use them, and few do the full extent. That being said, we have a cyclical company with a tiny market cap of $24M. Shares are down 55% this year even with the buyback support. The company has $681M in debt against $45M in operating cash flow. This remains a very high risk situation. Asset sales may determine its survivability. These situations are often binary. We have seen companies do buybacks just before bankruptcy in the past. Often, creditor moves are beyond managements' control. We would not recommend purchase here.