Opinions
Michael Smedley
Urbana Corp.
URB-T
HOLD
Feb 21, 2008
Stock price when the opinion was issued
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A closed-end fund run by good management. Management buys back its stock, which very few closed-end funds do. It owns some interesting assets, notably the Canadian Securities Exchange, which is gaining market share against the Venture Exchange. Also, owns an exchange in India which has been threatening to go public for years. This could finally happen with the new government in place. Trading at a big discount to its NAV. Not very liquid, so don’t buy at Market, but put in bids and try to get them filled. Yield of 2.36%.
URB invests in private equity and debt and holds mining interests in Quebec. The mining interests are carried at zero valuation in their books. There are new investors in the area, so there could be good upside from this asset. The shares trade at 2x earnings and under book value, while supporting a 28% return on investment. We recommend setting a stop-loss at $4.50, looking to achieve $6.50 -- upside potential over 28%. Yield 2.3%