Q: It's been over 6 months since there's been a question about Aimia. How do you feel about it's prospects now (buy/sell/hold)?
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Investment Q&A
Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.
Q: Wondering your thoughts? New acquisition, new focus for the company, utilizing tax loss carryforwards is one of the goals. Recently on BNN, this was stated by an analyst.
This one is a bit of a departure from traditional earnings metrics stories we usually look at and is more of a special situation.
Aimia formerly had the contract to run Aeroplan, but then Air Canada cancelled that and ultimately bought the business back from Aimia. Since then, it is essentially a holding company, run by managers with a track record of value investing. It is essentially a public asset manager/hedge fund.
It recently sold its interest in PLM to Aeromexico for $541 million and this is where the story gets interesting. Today, the have interests in a few other companies worth around three or four dollars per share. It has cash of more than six dollars per share from its asset sales. Net of preferred shares, this gives it an estimated “sum-of-the-parts” of about seven dollars per share. The stock currently trades at $3.90, at just over half of its “fair” value, which we think makes it too cheap to ignore.
Sum-of-the-parts only works if management can do something to close the discount. It has $785 million of tax losses that can be utilized, and are in the enviable position of having a ton of cash to put to work at now very compelling valuations given the market sell-off. Since taking over the business, current management has been very active in crystallizing value. If it can’t find cash-flowing businesses to buy, it will continue to buy back stock, effectively returning cash to shareholders. In the past, it has done regular buybacks as well as substantial issuer bids.
Ultimately discounts like this don’t persist forever, and while we think you need to be patient, we also think it is aligned with shareholders as large personal holders of the stock, and that it will work to close the discount to fair value.
This one is a bit of a departure from traditional earnings metrics stories we usually look at and is more of a special situation.
Aimia formerly had the contract to run Aeroplan, but then Air Canada cancelled that and ultimately bought the business back from Aimia. Since then, it is essentially a holding company, run by managers with a track record of value investing. It is essentially a public asset manager/hedge fund.
It recently sold its interest in PLM to Aeromexico for $541 million and this is where the story gets interesting. Today, the have interests in a few other companies worth around three or four dollars per share. It has cash of more than six dollars per share from its asset sales. Net of preferred shares, this gives it an estimated “sum-of-the-parts” of about seven dollars per share. The stock currently trades at $3.90, at just over half of its “fair” value, which we think makes it too cheap to ignore.
Sum-of-the-parts only works if management can do something to close the discount. It has $785 million of tax losses that can be utilized, and are in the enviable position of having a ton of cash to put to work at now very compelling valuations given the market sell-off. Since taking over the business, current management has been very active in crystallizing value. If it can’t find cash-flowing businesses to buy, it will continue to buy back stock, effectively returning cash to shareholders. In the past, it has done regular buybacks as well as substantial issuer bids.
Ultimately discounts like this don’t persist forever, and while we think you need to be patient, we also think it is aligned with shareholders as large personal holders of the stock, and that it will work to close the discount to fair value.
Q: Thoughts on earning reports this morning? Thanks.
Jerry
Jerry
Q: This stock seems to be gaining traction in this unsure market. Can I get your views on it. Would you consider it a buy with some growth potential?
Q: 1) What is their burn rate? I can't seem to find.
2) Am i correct in seeing that they are net cash 200m?
3) Aren't these companies at a significant advantage? They have essentially been short the market... and being short the loyalty market puts them at an incredibly advantageous position.
2) Am i correct in seeing that they are net cash 200m?
3) Aren't these companies at a significant advantage? They have essentially been short the market... and being short the loyalty market puts them at an incredibly advantageous position.
Q: During the financial crisis, there were companies trading at or near their cash value. Do you see any companies trading near their cash value? Is it possible to make a list for us? Thanks
Q: What is your view of this company for growth and a hold of 5 years. Thanks
Q: Good morning,
I've been shellacked by AIM and CPG and they each are about now only 0.25% of my holdings. Should I just cut my losses here and redeploy what's left of that cash?
Thanks,
Robert
I've been shellacked by AIM and CPG and they each are about now only 0.25% of my holdings. Should I just cut my losses here and redeploy what's left of that cash?
Thanks,
Robert
Q: Is there a timeline for the special committee to provide their recommendations? Debating whether to hold or sell my shares. It seems that the shares are still trading at a significant discount to the "fair value" of its remaining individual assets.
Q: When does the Air Canada transaction close? Do you think it’s possible that the company will wing up or sell some more assets then wind up?
Q: AIM stock price is doing well lately, do you think it is a buy?
Q: these mittleman brothers with an 18% stake in aimia put out a press release saying the nav of aimia is 7.50 a share, and they release a sum of the parts,the stock closed at 4.30. is this realistic or just pie in the sky. dave
Q: Similar to Dave I am having trouble assessing the value of Aimia and specifically assessing expected tax impacts of the sale of Aeroplan. Aimia's largest shareholder (Mittleman Brothers LLC) issued a statement supporting the recent offer - however, in this statement it notes expected taxes on the sale should be minimal - can you please confirm this?
The statement also notes that their "sum of the parts" valuation for Aimia is C$7.50 per share. This is based on a "full valuation" for PLM Premier - however, even discounting that to the recent offer received the valuation is closer to C$5 per share. Also no value is being assigned to potential tax losses that could be carried forward.
What is driving the substantial discount in the share price? Does 5i have a view on what the "fair value" of Aimia is based on the revised Aeroplan offer?
The statement also notes that their "sum of the parts" valuation for Aimia is C$7.50 per share. This is based on a "full valuation" for PLM Premier - however, even discounting that to the recent offer received the valuation is closer to C$5 per share. Also no value is being assigned to potential tax losses that could be carried forward.
What is driving the substantial discount in the share price? Does 5i have a view on what the "fair value" of Aimia is based on the revised Aeroplan offer?
Q: i bought a huge position in aimia awhile back betting that air canada would buy back aeroplan, now it has happened, i have sold some aimia , my question is should i exit the rest,i am having trouble valuing aimia.dave
Q: We have 1000 shares at issue price of $25. Thoughts on selling these here or holding?
Thanks.
Ted
Thanks.
Ted
Q: Why did the AIM preferreds go up in such a disproportionate way? Thank you.
Q: Can you provide a price target based on the new balance sheet value per share as a result of the air canada offer? They own some other assets like Cardalitycs and the $500M areomexical points program. But I'm confused about where pension obligations and working capital cash will go if Air Canada buys aeroplan and takes on the redemption liability.
Much thanks
Much thanks
Q: What are your thoughts on Aimia's announcement of them getting into the airline business? How do you see the future of Canadian airline competition and this affecting Air Canada's planned loyalty program?
Q: In my last question you indicated that mittleman has 0.05% of the shares. They actually own 16-17% ie 27M shares and just joined the board as an activist, changed the CEO etc. This play is very reminiscent of Buffett’s Blue Chip Stamps. So I’ll ask again, what’s with the buying and selling of shares. They have made some big buys in the past month, but they appear to be selling some, or is this just administrative adjustment of shares in their fund?
Q: Could you comment on the buying and selling done by Mittleman. They have amassed a lot of share and taken a seat on the board. Now it seems they are selling some days and buying some days (manipulation to buy more at a discount?). Also the share prices when they sell are well below the current market rate (selling under $2). Are they selling in USD? Do you think they are making the market now?