Investing

COS: I got spanked and my tushy hurts. Now what?

  • Last Updated:
  • Jan 22nd, 2016 3:33 am
Banned
Apr 27, 2014
652 posts
13 upvotes
Basically COS is like an investment holdings company is that right?

I agree then that more than 3-5 employees is way over done. There is no management needed than to keep up with corporate documents and maybe exchange listing requirements being that they are a publically listed company. So the office work is pretty minimal?
Deal Addict
Aug 12, 2004
4511 posts
2168 upvotes
Calgary
KnowledgeHungry wrote: congratz to those of you held it through.
The last thing I would say to those holding COS is congrats... The last post of this thread was done when COS was priced at 12$. OP also bought at 20$.

This is why holding on to turkeys because they are only paper losses is a recipe for disaster. Those paper losses are no longer paper losses once the bid gets accepted.
Deal Expert
User avatar
Feb 11, 2009
20055 posts
9836 upvotes
Toronto
I'll be voting to reject this offer...TERRIBLE DEAL
Realtor (Investment Properties) - CPA, CA
Deal Addict
Sep 6, 2010
2029 posts
804 upvotes
Vancouver
Firebot wrote: The last thing I would say to those holding COS is congrats... The last post of this thread was done when COS was priced at 12$. OP also bought at 20$.

This is why holding on to turkeys because they are only paper losses is a recipe for disaster. Those paper losses are no longer paper losses once the bid gets accepted.
+1 this is awful for most.
Deal Addict
Sep 6, 2010
2029 posts
804 upvotes
Vancouver
Firebot wrote: The last thing I would say to those holding COS is congrats... The last post of this thread was done when COS was priced at 12$. OP also bought at 20$.

This is why holding on to turkeys because they are only paper losses is a recipe for disaster. Those paper losses are no longer paper losses once the bid gets accepted.
It's also why holding more than 5% of your portfolio in any one stock is a very risky game.
Banned
May 20, 2015
247 posts
39 upvotes
Scarborough, ON
gwplant wrote: It's also why holding more than 5% of your portfolio in any one stock is a very risky game.
it is hard to obtain above market average (S&P 500 dividends re-invested) over a 20 year period if you diversify into 20 companies.
Newbie
Feb 20, 2015
85 posts
31 upvotes
i would take the loss and sell it. buy something else (e.g. index etf) with the remaining cash.
or keep the COS as is in order to remember a lesson...
Deal Addict
Sep 6, 2010
2029 posts
804 upvotes
Vancouver
KnowledgeHungry wrote: it is hard to obtain above market average (S&P 500 dividends re-invested) over a 20 year period if you diversify into 20 companies.
I cannot figure out what you are trying to insinuate, but I am pretty sure I disagree. Here is my counter, own 3-5 companies and say one of them was (pick any oil stock) that gets a low ball opportunistic buy out bid such as COS and I guarantee you are getting crushed and may never recover the losses when say COS makes up 20-30% of your portfolio....but of course I digress, either you understand that or you refuse to understand that, either way I am not here to change your investing style. GL
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User avatar
Mar 31, 2009
1219 posts
884 upvotes
I don't own COS, but I have in the past and over the past year I almost felt like buying multiple times.

Horrible deal.. Unless they're going bankrupt (doubt it) there is no way in heck I'd accept this if I was a shareholder. Within a year we'll be at $60+ oil and such a lowball offer wouldn't even be considered.
Deal Addict
Sep 20, 2014
1201 posts
435 upvotes
Calgary, AB
KnowledgeHungry wrote: it is hard to obtain above market average (S&P 500 dividends re-invested) over a 20 year period if you diversify into 20 companies.
How so? Sure, on the face of it, your profit and your loss would be nullified a bit by the diversification but if you're investing sensibilities and buying securities only when they're cheap, that risk of "not getting enough return" can easily me mitigated. Also, in investing, my own personal belief is that more important than taking in a profit is to make sure you don't have to take in a loss - in this regard, it is impossible to argue against diversification. When done right, it can be a huge boon.
unknownone wrote: I don't own COS, but I have in the past and over the past year I almost felt like buying multiple times.

Horrible deal.. Unless they're going bankrupt (doubt it) there is no way in heck I'd accept this if I was a shareholder. Within a year we'll be at $60+ oil and such a lowball offer wouldn't even be considered.
Yeah, I was surprised to see them jump the gun here. Apparently, they've held private talks back before as well when COS was well above current levels. Makes little sense for either company to accept the deal. As an SU shareholder, I wasn't too happy either - they get to take on a project uneconomic at current levels and one that will likely attract more problems later on. I get it that they can use nearby operations to increase efficiency but the project is still run by Imperial.
Deal Addict
Jan 3, 2013
2807 posts
1152 upvotes
Sidney
unknownone wrote: I don't own COS, but I have in the past and over the past year I almost felt like buying multiple times.

Horrible deal.. Unless they're going bankrupt (doubt it) there is no way in heck I'd accept this if I was a shareholder. Within a year we'll be at $60+ oil and such a lowball offer wouldn't even be considered.
But if you're getting SU shares as a result, won't they ALSO go up when "oil goes up"? I fail to see how you'd come out any further behind or ahead.
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User avatar
May 25, 2008
1615 posts
945 upvotes
Toronto
I first bought COS in 2007 and recently got out around $11 and took my lumps. Even with the SU bid I'd still be big time underwater if I held on. Would be on my personal top 3 list for worst investment in the last 10 years.
Deal Addict
Jan 3, 2013
2807 posts
1152 upvotes
Sidney
deal_with_singh wrote: I'll be voting to reject this offer...TERRIBLE DEAL
Why is it terrible? Its 50% MORE than what the market thinks COS is worth. I'm shocked that they are offering more than what the market price currently is.
Deal Addict
Sep 20, 2014
1201 posts
435 upvotes
Calgary, AB
favelle75 wrote: But if you're getting SU shares as a result, won't they ALSO go up when "oil goes up"? I fail to see how you'd come out any further behind or ahead.
Problem with SU is that it's own diversification and relative strength in the sector has worked against it in this regard. Since June 2014 it, along with IMO, has remained relatively stable considering the drop in prices.
[IMG]http://i.imgur.com/GpCG5DX.jpg[/IMG]

Should oil prices go up tomorrow, the upside will be limited. This is seen clearly in the day to day moves of the stock. E&Ps like CNQ and CPG are much more volatile in pricing than the two big integrated companies. I sorta see the argument if you bought COS recently thinking there is little downside in the hopes for a spectacular profit, only for you to be given a quarter of a SU share in return. And also for people who are still quite under in the investment.
Deal Addict
Jan 3, 2013
2807 posts
1152 upvotes
Sidney
pulkit10 wrote: Problem with SU is that it's own diversification and relative strength in the sector has worked against it in this regard. Since June 2014 it, along with IMO, has remained relatively stable considering the drop in prices.
[IMG]http://i.imgur.com/GpCG5DX.jpg[/IMG]

Should oil prices go up tomorrow, the upside will be limited. This is seen clearly in the day to day moves of the stock. E&Ps like CNQ and CPG are much more volatile in pricing than the two big integrated companies. I sorta see the argument if you bought COS recently thinking there is little downside in the hopes for a spectacular profit, only for you to be given a quarter of a SU share in return. And also for people who are still quite under in the investment.
Well, there' no guarantee that oil will go up for that "spectacular profit" anyways. 50+% increase is pretty spectacular in most people's eyes anyways.

For those people that bought long ago for a lot more, they'd be smart to take the "loss" of that 50% gain, and invest it into another "volatile" stock for even more gains when oil goes back up.

I just don't understand why Suncor has to pretend that oil is $100/barrel when calculating the price it wanted to pay for COS. That makes little sense.
Deal Addict
May 28, 2006
2389 posts
181 upvotes
gwplant wrote: I cannot figure out what you are trying to insinuate, but I am pretty sure I disagree. Here is my counter, own 3-5 companies and say one of them was (pick any oil stock) that gets a low ball opportunistic buy out bid such as COS and I guarantee you are getting crushed and may never recover the losses when say COS makes up 20-30% of your portfolio....but of course I digress, either you understand that or you refuse to understand that, either way I am not here to change your investing style. GL
+1 totally agree.
Deal Addict
Sep 20, 2014
1201 posts
435 upvotes
Calgary, AB
favelle75 wrote: Well, there' no guarantee that oil will go up for that "spectacular profit" anyways. 50+% increase is pretty spectacular in most people's eyes anyways.

For those people that bought long ago for a lot more, they'd be smart to take the "loss" of that 50% gain, and invest it into another "volatile" stock for even more gains when oil goes back up.

I just don't understand why Suncor has to pretend that oil is $100/barrel when calculating the price it wanted to pay for COS. That makes little sense.
Common sense would dictate that, hence why it isn't such a popular option. It's speculation either way when you buy a heavily leveraged, loss generating company in the hope that "change is right around the corner" or hold the same company thinking it'll be back to its glory days.

I couldn't agree more about that with SU. I think they're getting a bit of a deal here but there is little to be had in a project that's been a major source of headaches for COS and IMO since inception and when you can buy many more quality assets for the same price.
Member
Feb 8, 2010
326 posts
35 upvotes
Toronto
I'm one of those in the "long-term hold and down on the stock" camp, so I just wrote some calls against my position. If it moves above $11 before Jan, I'll get assigned at a loss, albeit a lot smaller loss than before. If not, I'll keep the premium and potentially roll it out longer term. I don't see a higher offer coming, but if it does, I suppose I'm giving up those gains above $11.

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