Oh hey, it’s the Financial Uproar fund of FUN. Are you all literally grinning like this guy right now?

WHAT IN THE HELL IS WRONG WITH THAT MAN'S FACE?

WHAT IN THE HELL IS WRONG WITH THAT MAN’S FACE? (Source)

Okay, maybe not.

When we last visited the Uproar Fund, the value of it had declined approximately 1%, on account of it only having three positions and being approximately 75% cash. That’s slowly changing, as you’ll see. I’m rapidly getting to the point where the fund only has 60% cash. It’s so exciting.

Let’s go through each holding individually, taking a closer look at each individually. The results are as of December 31st closing prices.

Reitmans

Purchase price: $6.295
Dividends received: $0.15

Current Price: $7.71
Result: +24.8%

OH BABY NOW WE’RE TALKING.

Reitmans announced it was closing all of its Smart Set banner stores back in November, either shutting them completely or switching them over to another one of the company’s brands. Smart Set is a chain for younger women, and it consistently hasn’t done as well as the rest. People make fun of my Reitmans shares because the stores aren’t filled with cool clothes. They have no idea of how right they are.

The company also came out with earnings in December, which were good. Sales were up a bit (excluding closed stores), and so were gross margins. Earnings came in at $0.20 per share, compared to $0.09 last year. Not bad, considering that wasn’t even the holiday quarter. Plus, low gas prices obviously help. What’s a more discretionary item than women’s clothes?

Danier Leather

Purchase price: $9.11
Dividends received: N/A

Current price: $6.00
Result: -34.1%

Well, at least Reitmans went up.

Danier comes out with earnings in about three weeks, and if I don’t see some sort of improvement, I’m going to punt the stock from the fund.

I viewed it as sort of a slow motion take private transaction. They’d be a break-even (but cash flow positive) company for a few years, and then use the cash to buy back shares. Eventually the founding family would just take the company private, pissed off at the lack of respect the market was giving it.

Instead, the company has pissed away a good chunk of its cash by reporting some truly terrible results lately. I’m afraid that they’re going to be one of the victims of Canada’s retail crunch.

MRRM

Purchase price: $3.1988
Dividends received: N/A

Current price: $3.50
Total gain: 9.4%

Ah, micro-cap MRRM. It went up from $3.00 to $3.50 one day on 100 shares of volume. Thank you, whoever did that. You are truly doing the Lord’s work.

There’s not much to say about the company that I haven’t before. Still waiting for it to pay out all the money it currently invests for some reason. If you strip away that cash, it’s stupid cheap. You’re paying something like 6x earnings ex-cash for a company trading at less than half of book value.

Penn West

Purchase price: $3.275
Dividends received: $0.07

Current price: $2.43
Total gain -23.6%

Penn West is the 2nd biggest holding in the fund. I purchased 1,000 shares at $4.10 in late November, and an additional 1,000 at $2.45 on the 31st of December. I got a $0.14 dividend for the first 1,000, hence why I counted it at $0.07.

Penn West will soar when oil recovers; It’s just a matter of it actually happening. Based on the value of the assets, it’s stupid cheap. Tangible book value is $11.11 per share, debt is a manageable issue (at least for now), and there are some pretty sharp dudes in charge. Insiders have bought something like 400,000 shares at the same time I was. These are all good things.

We just need oil to recover. Can you guys go bomb Iraq or something?

Summary

Stock Amount invested Amount now
RET.A $12,590 $15,720
DL $5,466 $3,600
MRRM $5,758 $6,300
PWT $6,550 $5,000

Totals

The total amount invested so far has been $30,364. The total amount of securities is 30,620, for a return of approximately 1% on the amount invested. Add in the almost 70% cash, and we’re basically looking at a flat quarter.

Kind of a meh verdict, but that’s okay. It’s still a mostly cash portfolio. I’ll be more apt to compare the results to the indexes when it’s fully invested.

Bonus! New Uproar Fund stock

This stock isn’t much of a surprise to those who follow the blog. It’s Hudson’s Bay Company. I won’t talk much about it, since I’ve already said a bunch of words about it.

I picked up 200 shares of the company at $22.99 on Tuesday afternoon during the carnage. I’m of the belief that the real estate alone is worth about $40 per share, and the retail business itself is worth about $20 per share. The target price is a little conservative based on the sum of the parts, but it pays to be conservative. I’m looking to sell at $50 per share, which is more than 100% above my purchase price.

Tell everyone, yo!