# Cogeco thoughts?



## MrMatt (Dec 21, 2011)

My cogeco has been screaming along.
Any thoughts on what is going on here?


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## andrewf (Mar 1, 2010)

What does that even mean?


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## gardner (Feb 13, 2014)

andrewf said:


> What does that even mean?


It's up 70% YTD and up around 7% in the past month.


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## MrMatt (Dec 21, 2011)

gardner said:


> It's up 70% YTD and up around 7% in the past month.


Exactly, and it looks like they're still reasonably valued. 
I'm just wondering if anyone else has a thought on them.


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## lonewolf :) (Sep 13, 2016)

gardner said:


> It's up 70% YTD and up around 7% in the past month.


cancelled my reply


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## Ponderling (Mar 1, 2013)

I own a bit of Bell, Telus, Quebecor. Used to own Rogers, but bank stock analyst report was weak on them about 6mo go, and strong on Cogeco.
Not sure what is driving them, but I am so far happy.


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## PabloPenguino (Dec 10, 2019)

Big pullback on Q1 results. I thought the results looked fine. Considering adding here. Anyone else watching this?

https://ca.finance.yahoo.com/news/cogeco-communications-releases-results-first-000500310.html


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## agent99 (Sep 11, 2013)

After having been a customer for too many years, I try not to even think about Cogeco  

Can't imagine why their stock would do well considering their poor customer relations.


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## MrMatt (Dec 21, 2011)

agent99 said:


> After having been a customer for too many years, I try not to even think about Cogeco
> 
> Can't imagine why their stock would do well considering their poor customer relations.


Monopolies typically have poor customer service.

Financially I thought they were doing well. 
Even a nice dividend boost.


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## Ponderling (Mar 1, 2013)

yes, pulled back, but still I am in. Now just a good investment, rather than 'hold on nellie' type.


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## MrMatt (Dec 21, 2011)

Well it looks like the buyout isn't happening, but I got to thinking, I really should have more seriously considered selling in January, even now I'm still looking at a ~13% CAGR over ~7years


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## Ponderling (Mar 1, 2013)

sold last shares at 110 today. I was in for less than 2 years, and got in at 88. I wish all my trades went this well. Now to invest in an underperforming stock that has a hope of living through a second covid wave.


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## MrMatt (Dec 21, 2011)

Even better offer, but they aren't selling.
I think the last offer was fair, but not enough for a takeover, I'd like to see another 15%.
But I doubt that's going to happen, I wonder if getting multiple rejections is part of their takeover strategy.


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## doctrine (Sep 30, 2011)

The shrinking stock price of Cogeco in the face of a credible and valuable takeover offer could put the board at risk of lawsuits for not holding to their responsibility to maximize returns.

What really undermines the Audet family is the risk of Rogers and minority shareholders giving up and selling out. This will destroy the share price and their argument they have been outperforming Rogers. They could be overwhelmed with lawsuits and forced to compensate shareholders or maybe even buy them out themselves. 

Such is life when you go to public markets. You can't just infinitely crap all over the minority shareholders from whom you took money.


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## MrMatt (Dec 21, 2011)

doctrine said:


> The shrinking stock price of Cogeco in the face of a credible and valuable takeover offer could put the board at risk of lawsuits for not holding to their responsibility to maximize returns.
> 
> What really undermines the Audet family is the risk of Rogers and minority shareholders giving up and selling out. This will destroy the share price and their argument they have been outperforming Rogers. They could be overwhelmed with lawsuits and forced to compensate shareholders or maybe even buy them out themselves.
> 
> Such is life when you go to public markets. You can't just infinitely crap all over the minority shareholders from whom you took money.


They're the minority shareholders, such is the life of multiple voting classes.


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## doctrine (Sep 30, 2011)

Yes, but no voting power doesn't mean no rights - look at what happened with Telus and the manipulation that went on when Ackman tried to eek out some extra return for the voting class shares. My point is there are real, tangible, and negative consequences to these events - it's not as iron clad proof as you might think. Even Zuckerberg has been forced to deliver on returns and not just his mission and vision despite owning 57% of the voting rights, which gives him supreme voting power, no questions asked. I'm just offering some perspective of what could happen from a corporate governance and shareholder rights perspective. Rogers and others might also step up competition and squeeze Cogeco further. Who knows. And making enemies of the capital markets who would be in favour of this - which could raise the cost of capital (i.e. debt). If I was holding Cogeco shares, I would not be pleased to be looking at years of dropping share prices. One might want to get to the exit doors before Rogers and others start selling and really hitting the stock, if you think the sale won't go through.


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## MrMatt (Dec 21, 2011)

@doctrine 
I also think it's important to consider the value of political connections in Quebec.
The family is rich, but through their multiple voting shares they actually control much more.

The government loves to "help out" those Quebec companies, and no doubt their families.


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