Nuvilex (NVLX) is a company that I’d never heard of until about about a week ago when a client asked me to take a look. At first glance, my reaction was something along the lines of “why should I be bothered with a $0.05/share microcap transformational/developmental stage biotechy company with downright scary financials and a strange history?” After doing a ton of reading and research, I’m starting to realize why I – and you – should care about this company, regardless of it being a volatile microcap OTC penny stock.
Quick note: It seems like it was a year ago when I wrote that the selloff in Carnival Cruise Line (NYSE: CCL) shares after the Costa Concordia ran aground was overdone. Looking back, it was actually 419 days. At the time the shares were trading at $31.56. The shares subsequently recovered to a high of $39.95. A solid 26.6% return. Today the shares closed at $34.95, still up 10.7%, but 12.5% off the highs.
Last time, I gave a number of reasons why I thought the shares were attractive. As the saying goes, this time, it’s different. Continue reading
While I’m sure I’m not nearly the 1st person to post this from the Oxford Private Equity Institute Conference on March 5th, I thought it an interesting read (especially if you’ve read him previously).
Perhaps the presentation is best summarized by the quote on page 2, to which the entire page is dedicated. I find this particularly disturbing:
You can read the full post here:129134638-Howard-Marks-Investing-in-Uncertain-Times
I’ve been negative on ZAGG since July, 2011 when the price was in the mid teens, so the stock is down somewhere around 45-50% since then (fair credit to Citron – who was more and more impatiently negative than I, Roddy Boyd, and others who were on top of this dog early). I’d like to posit a question (or a few): Would you rather own a company that relies on one, maybe 2 accessory products for maybe a handful of devices OR would you rather own a company that has demonstrated brand equity – bordering on being, dare I say, a lifestyle brand with a continually diversified, relevant product portfolio? What if the former had dozens of questions about management, governance, disclosure, business practices, (I could go on for a while), while the latter seems at least relatively squeaky clean?
Since I transitioned Stone Street Advisors from a financial blog to Stone Street Advisors LLC – providing research & analysis services for institutional investors and the like – I’ve shied away from getting into political debates. Once an issue becomes prevalent, the majority of people have their minds’ made up based upon limited information, usually fed to them through various forms of grossly over-simplified media “reports” or info (read: opinion) from friends/family. There is generally no use trying to sway the opinion of these people, it’s just an exercize in futility; there are no facts, figures, statistics, or well-researched/constructed arguments that can change their minds.
When I wrote last weekend about Cash America International (CSH – NYSE), the stock was trading at $41.76. On Friday, the stock closed at $48.08, a gain of 15%. In the post, I wrote that the shares had the potential to rise “15%-20% over the coming year.” I definitely didn’t think it would get the entire gain in one week. So what happened? Continue reading
I recently ran a screen for mid-cap companies that could best described as “value” plays. The goal was to find companies that weren’t broken, but for one reason or another had either lost their way or had been left behind by investors. Twelve names appeared on the list. I have done work on two of the names. I am currently long both. The first – Superior Energy Services (SPN – NYSE) is up over 7% since I got in less than 2 weeks ago. Given the run, I will save that topic for another time. The second, which is the subject of this article, is up just over 2% since I initiated my position. Over that period, the market is up approximately 1%.
Elevator pitch: recession resistant sector; focused on an underserved market; as consumers see lower take home pay as a result of higher payroll taxes, demand could rise as their spending habits will be slower to adjust; finally, the business should benefit from a rise in gold prices. The focus of this post has a number of additional positives. The company has grown book value per share each of the last five years at an average rate of 16% (Warren Buffett would be proud). Net revenues and EBITDA have grown an average of 14% and 16%, respectively, over the past five years. The opportunity lies within the depressed EBITDA margin which is 200 basis points below the 5 year average (as a result of several management missteps). If the company is able to get just half of the lost EBITDA margin back, the shares would rise by over 8% – without multiple expansion. The stock trades at a significant discount to the market multiples of comparable companies and sits 31% below the all time high reached in September 2011. It’s not all gumdrops and rainbows. Regulatory risk is an issue but seems largely priced in the shares. Interested? If so read on to find out why these shares have the potential to rise another 15%-20% over the coming year.
As the Staples commercial goes: “That was easy”. On my birthday, SuperValu (SVU) gave you – my valued readers/followers – a present. The gift came in the form of an agreement to sell its “banners” to an acquisition consortium lead by Cerberus. The deal consists of $100 million in cash and the assumption of $3.2 billion of debt. More importantly, for SVU shareholders, the transaction comes in the form of a $4.00 per share tender offer for 30% of the outstanding shares.
At the time of my bullish post, the shares traded at $2.68. At Friday’s close, the shares were trading at $3.53 – a nice return of 31.7%. If successfully completed, the total return since my post would equal 49%, an additional 13% higher than the current price. Similar to my post “Down So Long it Looks Up – Zipcar”, the announcement of the SVU transaction touted the fact that it the offer was a 50% premium to the 30 day average closing price. However, it failed to mention that SVU shares traded north of $7.00 one year ago (or that it was trading at $5.29 in July when it announced that it had hired bankers to perform a “strategic review”). So the question remains, is the offer high enough and what is a shareholder to do now?
Case closed. I first wrote about Zipcar (ZIP) on April 19, 2011 when the stock traded north of $26. Then I revisited the stock in July of 2011 when the stock was trading at $22.51 (after having touched $19.35). In the post, I stated that “While I would applaud the fact that the underwriters’ analysts came out of the gates with “Neutral” ratings. I don’t think they went far enough”. Today, almost 18 months later, this hit the wires: “Avis Budget Group to Acquire Zipcar for $12.25 Per Share in Cash”. The companies involved touted the deal for its “49% premium over the closing price on December 31, 2012”; however, the release failed to mention that ZIP went public less than two years earlier at a price of $18. By my math, that means the take-out price was 31.9% BELOW the IPO price. Not to mention, the stock had a bubblicious IPO stock pop and opened up at $30 – this means the average investor is down far more than 32%. If you shorted the stock when I first wrote about it, you gave back some of your gains with today’s pop, but you’re still up over 53% (I would hope you took gains long ago – pigs get slaughtered!). What happened? Continue reading
I’ve penned the first of what may be more articles on young gold mining company Pershing Gold (PGLC), a stock that while trading in the ~$0.40 range recently, could be trading at several times that in the next 1-3yrs.
Please heed the disclosures attached to both, and as always: