Here’s the latest from Canadian Value Investors:
-The Trouble with Taiga Building Products (TSX:TBL)… What’s next? And What is Avarga anyway?
-Whitehaven ASX:WHC - Update on coal prices
-The Great De-levering of Canadian Oil and Gas
Whitehaven ASX:WHC - Update on coal prices
Disclosure: We still own this.
Oil prices are always in the news, but coal prices are typically much-less-so. Here’s a quick update for fellow coal-holders on the benchmark price most important to them. Operating performance at Whitehaven remains in line with expectations.
The Great De-levering of the Canadian Energy Sector
Despite much higher oil and gas prices, the industry continues to de-lever and underinvest. We are still long Suncor and MEG (though much less bullish on MEG).
https://boereport.com/2023/01/19/boe-intel-production-and-capex-guidance-trends-for-2023/
The Trouble with Taiga Building Products (TSX:TBL)… What’s next?
The Trouble with Taiga Building Products (TSX:TBL)… What’s next?
Disclosure: We own TBL and shares of the parent, Avarga Ltd. SGX:U09
Back in February 2022 we wrote about Taiga Building Products. We encourage you to read that article first before this update, but TLDR Taiga is Canada’s largest wholesale distributor of building materials, such as lumber, panels, etc, and now has a large footprint in the U.S. west coast after an acquisition in 2018. It is still trading at a low multiple, but has a wide range of potential future earnings, and is effectively debt free after a debt exchange and subsequent further reductions aided by a COVID boom. So the question is, now what?
We decided to dig back into this with:
1) A financial update.
2) Background on the effective parent, Avarga Ltd., which now owns ~72% of the Company, and whose share ownership in Taiga is now larger than its market cap despite other operating businesses (interested now?).
Financial Update
Our February 2022 article was before their 2021 year-end, which we have now added. The COVID bump continued.
They have released their Q3 results obviously. However, we have not included/annualized them for the chart above given seasonality and volatility, but their YTD results below tell the story.
The Company is now totally de-levered and has ~$100MM of cash. We note though that the business is seasonal with significant capital required in the spring for inventory build up.