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Dorel Industries Inc. (DII-B.TO)

Toronto - Toronto Real Time Price. Currency in CAD
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13.39-0.08 (-0.59%)
At close: 4:00PM EST
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  • R
    Ross
    They have delayed the high end bikes to ship in Q1 of 2021. See comment from Martin. Since we know the operating profit to be similar to Q4 2020 (per Martin) and the margin will be lower (per Martin.) It stands to reason that they will beat on Rev. Q4 will be the last quarter they will be able to suppress the numbers. They have a stock pile of high end products that is worth more than gold they are sitting on. Margins, Rev. And profit in Q1 2021 should be spectacular. I think Q4 will beat estimates despite their best efforts. My opinion.

    See comments from Q3 conference call:

    Biggest one is we made a decision earlier in the year, and I think it's been in the press, to start our model year with the calendar year, which was not the norm for bicycles. Norm would be start shipping bicycles in Q4 when the retail stores were sort of down and not busy, and they would have to fill up their basements with bikes. It didn't make a lot of sense, but it's what the industry did. And now we've shifted over to say, you know what, we're going to have you guys receive the bikes closer to when you actually sell them instead of sitting on them for months. And when we sit on them for months, as you know, the receivables wouldn't get paid either. So we -- it increased that, it increased cash pressures on lots of people. So we shifted a lot of the newer models towards 2021. And that was done 6, 7 months ago, the plan to do that. So when we had to bet earlier in this pandemic on what bikes would we bring in for Q4, we went, I guess, with the safest stuff, which would be the high-volume bikes. So we brought in a lot of high-volume bikes, but the high-volume bikes carry lower margins. So that's one of the reasons we're seeing an impact on our earnings in Q4.
  • M
    Malcolm
    We have to pay the fees caused by the attempted theft of our shares as well as possibly $75M cdn per the Luxembourg decision. So, what is your perspective on the manipulation of the upcoming financials?
  • R
    Ross
    OK, what do we think of the sell off today. I think it is relatively low volume about 400,000. Considering there is 34 million shares, it is just over .1% transfered hands. I think we kind of expected that. Ultimately Q4 and year end is going to drive the direction of this stock. What do you guys think?
  • v
    vinewood
    It's over. We are all still shareholders. Tuesday should be interesting on how the market reacts. Now we need to get a new Board of Directors in-place.
  • B
    Brian
    Just for fun, here are a few recent market growth articles/reports that directly list Dorel as a major player in this markets:

    "Children Tricycle Market Emerging Economies Expected to Influence Growth Until 2026 | Radio Flyer, Dorel Industries, Besrey, Bentley Trikes"

    "Baby Cleaning Products Market to Grow with Sustainable CAGR During 2020 – 2027 | Key Players – Dorel Industries , Newell Brands"

    "Analysis Reveals Hidden Growth Pockets in Bicycle Industry: Accell Group, Dorel Industries, Giant Bicycles, Merida, and Trek Bicycles, and more"

    "Children Bicycle Market To Set Phenomenal Growth By 2027 | Accell, Giant, Dorel Industries, Trek, Hero Cycles, TI Cycles, ByK Bikes, RoyalBaby, Happy dino, Goodbaby, Phoenix, Flying Pigeon, FOREVER"

    "Global Hybrid Bikes Market (2021) to Witness Huge Growth by 2026 | Trek Bikes, Shimano, Giant Bicycle, Boardman Bikes, Dorel Industries"

    "Ready to Assemble Furnitures Market 2021 Growing with Major Eminent Key Players: Sauder Woodworking, Dorel Industries, Bush Industries, Whalen Furniture, Homestar North America, etc."
  • R
    Ross
    Hey Brian, have they shipped the bikes?
  • B
    Brian
    If you haven't voted yet, the deadline is for electronic proxy voting it end of day tomorrow (11, February 2020, 23:59 EST). Virtual meeting is on the 16th.

    I have a feeling it's going to be voted down...

    I spoke to my contact at Cannondale again...they couldn't say anything outright, of course due to an NDA, but they did allude to stock, at least for Cannondale, was indeed at their warehousing. I am going to check with a shop rat when I get a chance, to see what the ordering systems shows for ETA of hot models.

    No details from Target corporate yet on the juvenile market products or lower end bikes.
  • B
    Brian
    I work in the cycling industry as a product engineer and manufacturing liaison. I spend time in China (and other bicycle manufacturing locations) at the factories and have a good relationship with many of the factories, their managers, and even their factory workers. Anyway, point being, Dorel has product, across all of their divisions, ready to "receive", after the vote. You can come to your own conclusions as to why they would have product waiting on the sidelines as bicycles, desks, and other items they manufacturer, are hard to come by and are in high demand.
  • R
    Ross
    I currently own about .1% of the company and I keep buying more. I look at it this way. For a very modest investment I will reap the rewards of $2,000,000 in revenue. I just keep loading up. This is a great product, great company,
  • R
    Ross
    Two more days. Anyone else excited? What do we expect will happen to stock if it were to get voted down? I think it jumps. All the people that are voting to sell could have at almost any point in time for a similar or even higher price.
  • R
    Ross
    In my opinion I think this stock is going to rise, you are able to purchase this stock at November 2020 price because the deal capped the upside. While most other stocks have rallied for the last six months, this stock has remained flat. The last earning report release blew estimates out of the water and it should continue to boom because of the demand for their products in this environment. Large institutional investor have been performing analysis of the value of this company. I am sure other private equity firm have been evaluating this deal and watching what Cerberus is doing. They are probably watching to see what is going to happen. Ultimately this stock is trading with significant value at a huge discount its competitors. In a market where it difficult to value and find companies trading with P/E of below 10. This company is under 10 P/E and has a very optimistic future. I think that this deal has gained Dorel the attention of investors and people can see how great of an investment this is for a value investor. Your question may be what will the family do next. They have been met with a wall of opposition. If they continue to try take the company private their seats are in jeopardy. I think they were trying to take the company private to transition the seat to next generation of schwartz family. They know they can't do that using a doom and gloom outlook. What is their next best option, reinstate dividend. Keep in mind that have not been receiving their extra money since 2018.
  • F
    Fred
    This is a great buy. Cerberus saw value at -- and was prepared to pay -- $16/share. Their target IRR is in the 30-40% range. Mine will be the same here.
  • v
    vinewood
    The sale is a done deal imo. It was clear from the released article that a price was negotiated with the large minority stockholders. Excerpt from the article "The increase in the purchase price follows exchanges and discussions with shareholders holding more than 50% of Dorel’s Class B Subordinate Voting Shares". For shareholders that are going to ride it out to see the final voting you may want to talk to your brokers as to what the fees will be when the sale goes through. $16.00 c less transfer, admin, etc....fees. It may be substantial.
  • B
    Brian
    Expect the stock to go down short term as Cerberus goes from a buyer of every available share to a net seller. Longer term shares go higher imo.
  • R
    Ross
    If you look at the trading for this week, you will notice a huge spike in purchasing volume on Friday. Considering no news was released on Friday, I think it is a large institutional investor seeing what we are seeing. How else do you explain volume increasing 3X in one day with no news. I assume that if they are buying 200,000 shares in one day. They plan on acquiring more next week. There was almost as many shares traded on Friday as the day the deal fell apart!
  • v
    vinewood
    Tuesday the 16th looks like it's proxy day finally. Do all votes have to be recorded prior to Tuesday or can the large shareholders vote after discussions during meeting?
  • K
    Kenneth
    This is a low float company so it's a mainly news driven issue which may trade in the range specified by TD valuators until ER.
  • r
    robert
    i sold 2 months ago rolled my profit into score gaming and am up 245% on investmant...ill buy back dorel when it gets unfrozen...your getting a better return on savings account than holding this...i see the upside but the family will continue to stall until market falls on its face and then get whatever offer they want....i just dont see the point of holding until this stalemate is over....ill be back in 2 months and buy back in at same price it is today....dont really understand the hold unless you believe the family is going to give up which is highly unlikely.. but good luck to all
  • b
    bill
    Interesting that all of the Schwartz family members that are in the bird are in their 6s-70s. No future generation interested in the business. They’ll make sure this privatization goes forward at whatever price I suspect.
  • M
    Matthew
    With today's announcement, are we done at $16.00 CDN? Thoughts?