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Thread: Rubicon

  1. #1
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    Default Rubicon

    Does anyone rate this at the moment?

    Its fallen about 15-20% from levels that it had held for a long time. They have bought in to TEN and will have to announce their new value for Arborgen when the day comes to report.

    I see the NY fund Third Avenue has increased their stake also recently.

    I'm picking, post-June 30th this will be re-rated about 30% from these levels.

  2. #2
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    up or down?
    And more specifically why?

    om mani peme hum

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    Third ave's stated investment strategy is to invest in co's that are trading at discounts of at least 30% from "readily ascertainable asset values". They are expecting tenon to sell its Nth American distribution business.

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    Westie,

    >>They are expecting tenon to sell its Nth American distribution business. <<

    Didn't Tenon recently buy parts more North American mouldings and distribution business ?

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    Yes & yes. Read the last quarter report for the international fund on third ave's website. They are picking more assets will be divested.

    Tenon has also recently invested more money in its Nth American distribution business.

    I haven't yet had the time, but i'd like to research what the carrying value vs the market value of the distribution businesses are. I'm not certain, but I believe Tenon bought private businesses and often these sell at lower multiples than what the market is willing to pay for a similar listed business

  6. #6
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    But if they like Tenon, why not buy TEN shares, seeing as you get a much larger share in TEN $ for $ than you do buying RBC?

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    Read the third ave reports, they believed when buying at around 97c p/s that RBC was selling at a substantial discount to asset value & their largest holding, tenon, was also selling at a discount. So their logic is buy RBC & you get tenon + the other assets of RBC. Kind of two for one.

    Don't forget, as substantial shareholders they can wield influence over the decisions of the board/management, so with a substantial holding in RBC, & given RBC's control of tenon, they have influence over both businesses. They'll have little clout if they only held tenon. That's how i understand it anyway. Our perspectives are different from theirs, because their stakeholding is of a different nature.

    I'm really interested to see what happens with RBC because they now have GPG, Perry, & Third Ave on board. I've just started reading Marty Whitman's(Third Ave) book "value investing" again, he really hammers the "resource conversion/balance sheet" perspective on investing. So when you look at what RBC & Ten offer (with virtually debt free balance sheets) it makes sense for them to be in RBC

    RUBICON’S assets:
    • 50.1 stake in Tenon
    • 50% stake in Horizon 2, a NZ tree cloning company half-owned by CHH
    • 32% stake in Aborgen, a US-based tree biotechnology consortium
    • 50% stake in Forestadora Tapebicua, an Argentinian eucalypt forest and timber processing business
    • 2.8% stake in listed genomics company Genesis Research and Development

    TENON’S assets:
    Manufacturing facilities
    • three North Island sawmills
    • Mt Manganui plywood mill
    • Taupo mouldings plant and boards plant
    • Kawerau remanufacturing plant
    • Ramsay Roundwood supplying post, piles, poles and other landscaping products

    Distribution ownership:
    • 50% stake in American Wood Moulding, a US moulding and millwork distributor, whose major customer is The Home Depot
    • 67% stake in The Empire Company, a US moulding and millwork distributor whose major customer is Lowe’s
    • 20% stake in Zenia House, a Danish solid wood furniture, manufacturer and distributor

    (the above is a little outdated now with the mill sales & incr investment by ten in the distribution assets)

  8. #8
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    Rubicon to Change Balance Date to june 30.

    thats just around the corner.
    when would investors likely see the numbers?
    anyone?

  9. #9
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    Last year they reported on the last possible day. Don't think it will be different this year.

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    just about touching the 52 week high

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