humble pie?, page-2

tcisboss may be eating humble pie, but he will be washing it down with dividend ale.

Agreed, RMA may never raise the necessary funds to complete the takeover. Correspondence with Acquest Capital seems to indicate otherwise, but it is hard to believe anything this late in the piece.

Deal or no deal, RUN is trading at a substantial discount to its liquidation value of 26c (2.5x rent roll rev, less net debt, 130m shares). This excludes any value from the AgentPlus platform, sales business, letting fees, RUN footprint or RUN Brand. The RMA deposit was priced at 40c/share by industry insiders.

From the last two financial reports, it appears the business has successfully turned the corner. The announcement of the maiden dividend lends further support to this view. By my calcs the business can support a 1c div per annum, whilst maintaining a constant cash buffer of $3.5m over the next few years.

Assuming RUN's Enterprise Value remains constant, the $1m in debt repayments each year will increase the Equity Value by the same amount. I should also receive a decent yield whilst I wait.

The key risk in my view is management - they still have a way to go to prove themselves as responsible stewards of the equity base.

...or RUN is taken over and I will struggle to find a similar risk/reward opportunity for my cash.