Dundee Corp. $52 – Toronto symbol DBC.SV.A

DUNDEE CORP. $33 (Toronto symbol DBC.SV.A; SI Rating: Average) holds equity interests in several businesses. Its main asset is its 63% stake in Dundee Wealth Management Inc., which sells investments, life insurance and other financial services through about 4,000 independent advisors across Canada. Through 86%-owned Dundee Realty Corp., Dundee invests in commercial and residential real estate developments in Canada and the United States. It also invests in junior resource companies.

In the three months ended September 30, 2005, Dundee earned $0.24 a share (total $6.4 million), down 56.4% from $0.55 a share ($14.4 million) a year earlier. But the latest results included a $5.0 million pre-tax charge related to Dundee’s plan to upgrade the computer systems of its brokerage operations. Revenue fell 7.7%, to $205.7 million from $222.8 million, mostly due to lower revenue from its real estate division, following last year’s sale of a condominium project.

Investors tend to avoid Dundee for several reasons, including its complex holding company structure and dual-class shares.

Dundee hoped to boost its share price with a Dutch Auction to buy back up to 10.46% of its class A subordinate voting shares. However, the news of the buyback spurred the stock price to rise above the top price in the Dutch Auction of $29.25 a share, so investors ignored the offer.

Even without the benefit of the buyback, it seems investors are starting to see the same qualities in Dundee that we do.

It’s simplifying its operations to unlock value, and its investment portfolio, not counting its consolidated subsidiaries, had a market value of $20.64 per Dundee share on September 30, 2005. The stock now trades at 18.9 times the $1.75 a share that Dundee probably earned in 2005.

Dundee is a buy for aggressive investors.

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