Capital Raisings Wrap: Understanding Winsome's premium raise, Flight Centre soars

A summary of companies that initiated capital raisings last week.

Note: Stocks that trade at less than 10 cents per share have been excluded from this list

Capital raisings of interest 

Winsome Resources: Understanding Canada's "Flow-Through Shares"

Winsome has initiated two capital raisings in the past three months and during this time, its share price has rallied more than 150%. Interestingly, the two capital raisings were held at a 79% and 98% premium.

Canadian-based Winsome is seeking to take advantage of the local 'flow-through shares' program, which enables investors to claim a tax deduction equal to the amount invested, subject to the individual's tax bracket. As Undervalued Equity explains:

Flow-through shares significantly reduce the risk of investing in resource stocks by allowing investors to recover a substantial portion of their original investment through income tax savings. For instance, an individual in a 50% tax bracket who invests $20,000 in a flow-through offering is really only risking $10,000 since he receives $10,000 in tax deductions.

Winsome Resources 52-week chart (Source: Market Index)

Flight Centre: Flying to New Highs

Flight Centre shares rallied a surprising 8.1% to a fresh 5-month high following the completion of its capital raise. The proceeds would be used to fund the acquisition of Scott Dunn, a high-end travel and tours company based in the UK.

Flight Centre said it expects the acquisition to increase its EBITDA margin by approximately 7% and be mid-teens percentage EPS accretive, prior to any synergies and/or transaction costs.

Goldman Sachs believes Flight Centre shares are trading around fair value, with a Neutral rating and $16.40 target price for the stock as of 1 February 2023.

"We continue to view FLT’s valuation as fully reflective of growth prospects albeit acknowledging the positive pivot in leisure strategy," said Goldman.

Flight Centre 52-week chart (Source: Market Index)