Medalist (MDRR) has the appearance of a value play with a 16% dividend yield and a market price that is over 50% below the initial capital raise. However, it looks much more like a value trap. There are structural inefficiencies and excessive waste which makes it difficult for this company to ever turn a profit. Over time, the seed capital will erode and MDRR will continually have to raise fresh capital at progressively lower prices.
Primary problems with MDRR
- Subscale
- Waste and inefficiencies
- Hotels and retail in secondary and tertiary markets
Over time,