# Davis and Hendersen or D+H Corporation



## Canuck (Mar 13, 2012)

what the hell happened?

Insider trading much?


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## kjmcrae (Apr 3, 2009)

Whoa - Down over 16% today! :hopelessness: Doesn't seem like this is due to the everyday ebbs & flows of the markets.


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## makemerich (Oct 1, 2015)

https://twitter.com/amberkanwar/status/658741983033360385/photo/1?ref_src=twsrc^tfw


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## GoldStone (Mar 6, 2011)

Another short seller attack, a-la VRX. There is a report out somewhere.


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## Canuck (Mar 13, 2012)

thanks for that makemerich. I couldn't find anything.

jaysus...


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## HaroldCrump (Jun 10, 2009)

*BNN video about what's going on*


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## Canuck (Mar 13, 2012)

saw this on another forum

"Just a read a summury of the short thesis of Sumzero.
Basicly they are saying that DH corp Overpaid for the fundtech acquisition back in april.
they are saying that fundtech is losing customer.... blabla.
IF they are right we will see it in tommorow morning.
this could be a huge buying opportunity.
If shares dip under 30$ tommorow. I am adding."


I guess we'll know more in the morning


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## HaroldCrump (Jun 10, 2009)

I had deep familiarity with D+H in a previous role at my company.
This is going back to the 2005 - 2008 days.
At that time, their old business was declining but they were in the process of restructuring their business into technological services for the financial industry.
They had started document processing, storage, aggregation and printing for some of the banks, credit union, and mortgage lenders we did business with.

At that time I thought that if they succeed in transforming their business, they could do well.
Certain parts of their business was always going to decline and eventually die away...but they had every opportunity to transform themselves into a technology financial services company.

I haven't kept track of them over the years, but based on a stock price chart, they seem to have realized that vision and done well.

I have personally never heard of this group SumZero, but then I am not a trader.
From the news on BNN etc. this sounds like another corporate raid.

Exactly the type of thing that Jason Donville was warning about last week on BNN.


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## Canuck (Mar 13, 2012)

I've held it since 2012 and oddly was going to sell last week as I'd made a double. Thought I'd put my money into something that had been beaten up a bit and had a better yield.
Course I didn't, because it fell both days I wanted to get out and I thought it'd bounce back to 40. Silly. Now I know why it was down those few days when the market was up. 

analysts always seem very positive on the stock.


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## jaybee (Nov 28, 2014)

More BS short sell attacking. Stock manipulation that ought to be illegal.. Backing up the truck over here...no rush to get in, but let's see what the earnings are like tomorrow.


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## Canuck (Mar 13, 2012)

"will announce its financial results for the third quarter of 2015 by press release on Tuesday, October 27, 2015 after market close."

wish it was before market opens


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## humble_pie (Jun 7, 2009)

HaroldCrump said:


> *BNN video about what's going on*



thankx for this. Amber Kanwar is one journo who's right in the eye of the storm, isn't she?

harold what do you make of this new breed of sullen, frumpy, ill-spoken short sellers who are succeeding in bringing some of what Kanwar calls "darling" stocks down to their knees?

james4 has posted that he thinks iti's all a market phenom, the market was far too overbought to begin with. If that's true, then i guess sullen, frumpy, ill-spoken & Co are going to have a field day.

Q: who are SFIS going to behead next?


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## leeder (Jan 28, 2012)

Hmm this drop is certainly surprising (and fishy). If it drops to $30 again or lower, I'm willing to buy. Looking forward to financial results though.


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## Canuck (Mar 13, 2012)

they just revised the earnings release to be "before market opens"

I think that's positive?

http://finance.yahoo.com/news/d-h-announce-third-quarter-020900357.html


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## HaroldCrump (Jun 10, 2009)

humble_pie said:


> thankx for this. Amber Kanwar is one journo who's right in the eye of the storm, isn't she?


Yup, she is certainly courageous for taking on these irascible Yankee short sellers.
She is not afraid to ask the tough questions and does not get unnerved when they lose their temper and fire back at her.
More than one of these irascible yanks have been fooled by her demeanor and thought they could walk all over her.



> harold what do you make of this new breed of sullen, frumpy, ill-spoken short sellers who are succeeding in bringing some of what Kanwar calls "darling" stocks down to their knees?


*Here is the full video of Jason Donville talking about it *(also interviewed by Amber).
He is asking the question, where does this end? What is next? Are these yanks going to go after the Canadian banks next?



> james4 has posted that he thinks iti's all a market phenom, the market was far too overbought to begin with. If that's true, then i guess sullen, frumpy, ill-spoken & Co are going to have a field day
> Q: who are SFIS going to behead next?


So I think this whole oil crash and the warnings around real estate crash have turned the world's attention to sleepy, frozen, Canada.
These American short sellers and other speculators have traditionally focused on the US tech, bio-tech, and mining sector.

Because of our energy sector carnage since 2014 summer, they have suddenly realized that there is an entire stock market north of the border that they can raid to make profits.

They would have started with the energy sector and realized that they are already oversold, so there is no easy money to be made by shorting it further.

Secondly, these Yanks are not geologists, mining engineers, or have any specialized training in O&G extraction and valuation.
It is not as easy for them to challenge the valuations of energy and mining companies.

So they have turned their attention to what they know best - bio-tech and financial services.
It is not super hard to find flaws in financial service, banking, and insurance companies.
They are all traditionally super-leveraged, carry a lot of different types of derivatives and securities on their books, mark to market valuations can easily be challenged (they are basically your word against mine), etc.

Therefore, these SFIS's are raiding the easiest targets.

Canada's real estate market and the related banking sector (as well as specialty firms like Home Capital, etc.) offer even easier targets.

Of particular concern is that American hedge funds and upstart short sellers have been trying to take down Canadian banks for the last 5 - 8 years.
Many have tried and failed.

Here are a few upstarts that lost their shirts trying to take down Canadian banks

*Meet the man who's selling Canada short*

*Another hedge fund manager bets against Canada's big banks*

*Latest Great White Short on Canadian banks not working out*

Note the date on the first two article...these upstarts bet against the Big 5 Canadian banks back in 2011.
We can tell how well that has worked out :biggrin:

However, now the focus on Canada and its stocks are unprecedented.
Hordes of these SFIS's are now looking for opportunities to raid mid-cap or even large car Canadian companies.

Valeant has perhaps a hole or two in their accounting and business model that can be exploited.

But I feel the DH case is just pure concoction.
It is possible to take pretty much any financial service stock, dig through their balance sheets and find small sub-companies and question their accounting.
It is possible to find illiquid, MTM derivative products and question their valuation.

In the video above, Jason Donville makes a similar example...you could find a small community credit union owned by the Bank of Nova Scotia out in Belize and raise a question about that bank's mortgage loans.

Then put out a "report" raising those questions and recommending a "short"
Then leverage social media to create a flutter.
Then sit back and watch your short position explode...

Hey, you and I with James4B can do this as a side business....


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## cn_habs (Oct 27, 2015)

Is anyone interested in getting in? Was guidance revised down hence the drop after turning green at opening?

My limit buy is at 25/share.


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## leeder (Jan 28, 2012)

This company is now being unfairly beaten up. The Q3 financial results were solid and does not deserve a 5+% drop, in my opinion. Trading at fairly cheap valuations at the moment, unless you really believe the short sellers.


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## HaroldCrump (Jun 10, 2009)

HaroldCrump said:


> It is possible to take pretty much any financial service stock, dig through their balance sheets and find small sub-companies and question their accounting.
> It is possible to find illiquid, MTM derivative products and question their valuation.


Aha, *here is a new BNN video from a few minutes ago *where the analyst is making a similar claim i.e. short sellers are targeting leveraged financial companies.
She is saying that the DH short report is "templated" i.e. the allegations are generic and vague - you can pretty much fill in any company name and off to the races...
It uses statements like "_appear to be_", "_increased risk of market conditions_", "_facing declining revenues_", etc.

This is indeed scary...wannabe short selling artists can take these reports, find leveraged financial companies with derivative or MTM assets on their books, or offshore sub-companies, and craft up a case for "fraud".


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## besmartrich (Jan 11, 2015)

I looked through their cash flow statements for last several years and their cash from operations appear to be very flat for last several years. Regardless of what's happening with the company last 2 days, what makes D+H corp an attractive buy?


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## Canuck (Mar 13, 2012)

and now Boyd group... short report


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## HaroldCrump (Jun 10, 2009)

This is a small company...why are the shorts bothering?
Valeant was the largest Canadian stock by market cap when the short report came out.
DH is small too, but Boyd is _tiny_.


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## Canuck (Mar 13, 2012)

no idea, that's just what they're saying on BNN


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## cn_habs (Oct 27, 2015)

Canuck said:


> and now Boyd group... short report


Do investors of BYD.UN have to file taxes differently in a non-registered a/c? I don't know much about MF trusts.


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## Canuck (Mar 13, 2012)

anything with a ".un" after the symbol, usually pays out distributions as a mixture of eligible dividends, "other income" (taxed as income), and ROC (return of capital). 

I think that's your question?

Anyway, it's a bit more work to keep track of compared to a stock that pays 100% eligible dividends.


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## humble_pie (Jun 7, 2009)

HaroldCrump said:


> So I think this whole oil crash and the warnings around real estate crash have turned the world's attention to sleepy, frozen, Canada.
> These American short sellers and other speculators have traditionally focused on the US tech, bio-tech, and mining sector.
> 
> Because of our energy sector carnage since 2014 summer, they have suddenly realized that there is an entire stock market north of the border that they can raid to make profits ... they have turned their attention to what they know best - bio-tech and financial services.
> ...




nice roundup reading list of recent canadian bank shorts!

to this list one should add shortseller-turned-california-chicken-farmer Marc Cohodes, as brought to this forum's attention by Goldstone a few months ago.

earlier this year cohodes bet heavily against canada's Home Capital Group. 

he would not short canadian chartered banks, cohodes told the globe & mail. "They're well-run, they're diversified and they're too big to fail by the Canadian government," he said.

instead, cohodes aimed at sub-prime finance that serves the canadian real estate market.

http://www.theglobeandmail.com/repo...l-group-canadian-real-estate/article25715455/

one comfort to this rogue's gallery of short artists is the fact that they have had to pay out whopping dividends over the past several years. Meawhile their short positions, although momentarily profitable here or there, have not actually paid off for them.


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## humble_pie (Jun 7, 2009)

HaroldCrump said:


> *Here is the full video of Jason Donville talking about it *
> 
> He is asking the question, where does this end? What is next? Are these yanks going to go after the Canadian banks next?



Q: is andrew left from nevada, the way jason donville keeps saying? is citron research incorporated in nevada?

nevada, home base of the naked shorts.

illegal in the US of A, typically the naked shorts have played in canadian penny mining stocks. Naked shorting is a cross-border issue. 

are they now going mainstream, though? companies like valeant, D & H?
brrrr, it's a bit like finding out your nice neighbour is an ISIL supporter


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## HaroldCrump (Jun 10, 2009)

humble_pie said:


> Q: is andrew left from nevada, the way jason donville keeps saying? is citron research incorporated in nevada?
> nevada, home base of the naked shorts.


Andrew Left lives in sunny, posh Beverly Hills, California.
I don't know where Citron Research company is incorporated...will look it up.

He is a Carson Block wannabe.
He has been copying Carson's methodology and has managed to identify a few smaller Chinese firms with borderline frauds.
That has been his claim to fame.

He also claims he called the top in GoPro shares, but he was not the only one.
Many analysts were screaming over-valuation on GoPro.

Peter Hodson of 5i Research (a respected Canadian research firm) and current editor of the Canadian Money Saver magazine is very skeptical of Left and his methods.
He said this:

"_What they seem to do quite well is they're able to spin existing facts into a horrible scenario. It reads very badly.
Their job as a company is to create the most amount of panic so they and their clients can make the most amount of money_."

Quote is from *this article*


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## HaroldCrump (Jun 10, 2009)

BNN just posted the following picture.
These Canadian companies have "growth by acquisition" as their core strategy.

It seems Wall St. & Bay St. are abuzz with rumors that short sharks are circling most/all of these companies.

According to what Amber is saying, shareholders of these companies should watch out for shark attacks.


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## cn_habs (Oct 27, 2015)

Is anyone buying at this level? DH's revenus have pretty much been flat.


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## cn_habs (Oct 27, 2015)

Canuck said:


> anything with a ".un" after the symbol, usually pays out distributions as a mixture of eligible dividends, "other income" (taxed as income), and ROC (return of capital).
> 
> I think that's your question?
> 
> Anyway, it's a bit more work to keep track of compared to a stock that pays 100% eligible dividends.


Is it too complicated to keep track of those dividends in a non-reg compared to a registered?


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## jaybee (Nov 28, 2014)

cn_habs said:


> Is anyone buying at this level? DH's revenus have pretty much been flat.


I bought some yesterday at about $30.00. This is a solid business, I couldn't help myself at those levels.


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## leeder (Jan 28, 2012)

cn_habs said:


> Is anyone buying at this level? DH's revenus have pretty much been flat.


I initiated a position yesterday; however, I was unable to catch the bottom of the range yesterday. That said, I still ended up with a gain yesterday, and further gains today. While revenue has remained flat, it has trended up -- as has EPS and FCF. Per TD's analyst report, EPS and FCF are anticipated to grow next year. Forward PE is currently sitting at about 13.5x and P/B is about 1.7x at the current closing price of $34.90. Debt is still sitting at the higher end for my liking, but I do recall seeing it at a higher level in the past. So, it seems to me that they're starting to pay it down. In the past, this stock increased its dividend every year. However, the last couple years, it has kept its dividend at the quarterly payment of $0.32 per share. I think this shows management is being prudent and making sure it keeps sufficient capital to fund acquisitions or to pay down debt.

Finally, TD just upgraded this stock to an Action List Buy (aka Strong Buy) as a result of the significant stock price drop. Unless there is actually an issue with the company and the short sellers are right, I believe the stock price has room to grow.


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## Canuck (Mar 13, 2012)

cn_habs said:


> Is it too complicated to keep track of those dividends in a non-reg compared to a registered?


Well it's definitely more work to keep track of ROC. The Income and dividend distributions are easily laid out in the tax receipts you'll get from your broker.

I tend to keep reits and any other stocks with ".un" in my TFSA. In fact that's all I have in that account. I don't have to worry about keeping track of anything, or pay the higher taxes on the "income" part.

It's not that bad though (if you have to buy in a non-registered), everybody seems to do it  

Just read up on ROC so you understand it. Pretty sure all companies that pay out ROC have a record of exactly how much of their distributions were paid in ROC each year.


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## AltaRed (Jun 8, 2009)

I agree it is not overly complicated. Tax slips and income summaries from brokers provide that information. One just has to remember that when they get their T3 tax slip....to go back and do the ROC adjustement on ACB effective December 31 the previous year. 

The biggest issue that I think gets missed is if someone sells a partial position during the tax year. One does not really know the ROC adjusted ACB for the date of sale until the information becomes available from the tax slip the following March.


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## chantl01 (Mar 17, 2011)

Does anyone have insight into what happened to this stock today? It's down nearly 4% and the only news I see is about a successful proof of concept trial with Rabobank for near-real-time cross border bank transfers. Seems to me that would be good news for the company!


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## AMABILE (Apr 3, 2009)

DH CORP has agreed to be taken over for $25.50

I thought it would be for $26.00 or more

but i'm still happy with this price because 

i bought at the low end @ $14.14


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## My Own Advisor (Sep 24, 2012)

Congrats to all who bought in years ago and held!


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## agent99 (Sep 11, 2013)

I don't hold the stock, but do own the Convertible Debentures. Not sure exactly how this will work, but either they will buy the CDs or I may have to convert to DH shares & then get $25.50? 

THis is what press release said on this:


> Within 30 days following the close of the transaction, as required in accordance with their terms, the Company will make a cash offer to purchase all of the outstanding convertible debentures of D+H at a price equal to 100% of the principal amount thereof plus accrued and unpaid interest (the "Debenture Offer"). In addition, beginning ten trading days before the anticipated date of the closing of the transaction, until 30 days after the Debenture Offer is delivered, holders of the 6.0% Convertible Debentures will be entitled to convert their debentures and receive, subject to the completion of the transaction, an additional number of D+H shares as set out in the 6.0% Convertible Debentures prospectus. Completion of the arrangement is not conditional on whether holders of convertible debentures tender to the Debenture Offer or convert their debentures to receive D+H common shares.


As it is, I own the 5% 2020 convertible debentures. No mention of those above, so I presume they will be purchased at face value plus interest to closing date. Considering I paid close to face value, continuing to earn close to 5% until closing date (3rd qtr 2017) seems like the thing to do.


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## doctrine (Sep 30, 2011)

My Own Advisor said:


> Congrats to all who bought in years ago and held!


Really? How about all the people who bought at $40 or even as high as $43? The $25.50 offer doesn't look so good to a lot of shareholders. This is defeat, not victory. It will probably succeed, but only really manages to save face for poor management. This isn't a takeover at an all time high such that everyone wins, it's only about 58% of the all time high in 2015 and still only 65% of the 2016 high.


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## AMABILE (Apr 3, 2009)

right on , doctrine---i bought in november 2016
when it really dipped to it's 52 week low


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## My Own Advisor (Sep 24, 2012)

doctrine said:


> Really? How about all the people who bought at $40 or even as high as $43? The $25.50 offer doesn't look so good to a lot of shareholders. This is defeat, not victory. It will probably succeed, but only really manages to save face for poor management. This isn't a takeover at an all time high such that everyone wins, it's only about 58% of the all time high in 2015 and still only 65% of the 2016 high.


I didn't mean those folks....more the buy low, and got in early. Agreed, not everyone wins here - depends on your holding period and entry point!


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## agent99 (Sep 11, 2013)

Seems it will be some time before shareholders get that $25.50. Considering low dividend, it may be just as well for shareholders to sell now and deploy their funds in other ways?



> The transaction is subject to customary closing conditions, including receipt of all regulatory approvals, and is expected to close prior to the end of the third quarter 2017.


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## AMABILE (Apr 3, 2009)

^^^^^^ agent99- agree that should sell now ($25.25) and deploy elsewhere

but why isn't it trading now @ $25.50 ?


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## agent99 (Sep 11, 2013)

AMABILE said:


> ^^^^^^ agent99- agree that should sell now ($25.25) and deploy elsewhere
> 
> but why isn't it trading now @ $25.50 ?


Market usually figures these things out. What will $25.25 be worth by September (assumes deal closes then) if invested? Probably more than $25.50, so good reason to sell. 
Still slight chance deal does not close or another bidder comes in.

I only have convertible debentures, so will hold them until the end and continue to collect the 5% coupon interest.


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## doctrine (Sep 30, 2011)

I usually sell if there is a takeover offer. You can wait a week or two and see how the stock is trading; if it matches or exceeds the offer price, it means the market is anticipating an increased offer or competing bid. Otherwise, just sell - the stock usually has maybe a 0.5% per month to expected close as a discount to the offer, a discount for the time value of money. 1% is pretty tight though. It doesn't seem like a great offer to me; it was trading higher just 5 months ago.


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## AltaRed (Jun 8, 2009)

Yeah, but D+H is headed downhill and needed saving. What it traded for 5 months ago is not relevant when one is standing on jello. I'd take the money and run.


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