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Jason Knapp

Special Situation Investing News - 7/10/2015

Welcome to another edition of the Special Situation Investing News, a compilation of the most interesting and actionable news about special situation investing from across the web.  There has been a number of black-swan-like events going on in the world lately, Greece is teetering on default, no wait there's an agreement, no wait... the Chinese stock market is being propped up with smoke and mirrors, Puerto Rico can't pay its bills, but you won't read about any of that here, other than to say that while Mr. Market fears change, value and special situation investors with money to invest, dry powder so to speak, should embrace change not fear it.  Change often creates great buying opportunities.  Enjoy!



Anatomy of a Successful Special Situation Investment That Still Has Room to Run

Graham Holdings: Undervalued Parent ex-Cable ONE [Note: I personally don't view the valuations that the author uses for Graham Media Group (9x EBITDA) and Kaplan (7x EBITDA) to be nearly as conservative as he believes. Having said that, I still think that Graham Holdings is fairly cheap at the current level and own it]

This is more of a note than a link, since I have not seen an article about this yet...maybe I should write one. Hmmmm.  Well for now, "DuPont spinoff Chemours sank another 9.3% today, bringing total drop to 43% in 14 days of trading."  That's a lot of pain, just the sort of thing that one usually looks for in a spinoff that just began trading, however I am still not interested in this one.

Forbes Suggests Five Potential Spinoffs

PayPal value hits $45 billion before eBay spin-off [Note: I personally am hoping for a massive post-spinoff selloff in shares of the remaining eBay stub once Pay Pal $PYPL begins trading the "regular way" as investors who only owned the former sell once they have the latter.  If there is one, I plan on scooping up shares of what I believe is actually a potential takeover target on the cheap.]

There's Something Rotten at J. Alexander's. Why I'm Selling Fidelity National Financial Ventures $FNFV

Liberty Global Launches LiLAC Tracking Stock

Cable One and Liberty Global's LiLAC join frenzied pay TV market

Acquisition target? SPX trades near 52-week low as spinoff approaches

Marchionne Sees Ferrari’s Value Exceeding $11 Billion in IPO

Following Ferrari Spin Off, Maserati To Become FCA’s Flagship Brand

National Oilwell Varco Spinoff NOW Inc. To Acquire Odessa Pumps

Morgan Stanley Thinks Market is Overestimating Yahoo Alibaba Spinoff Risk

Halyard Health Is A Classic Spinoff Play

After the split, HP Enterprise will be forbidden from selling itself

Cable One Spin-Off: Rollup Or Rolled Up

PayPal on the takeover hunt

Plan for TriMas spinoff: Eye small acquisitions



This Sponsor Is Ready to Create Another Profitable SPAC for Investors

Boulevard Acquisition: SPAC And Patent Concerns Create Opportunity To Own Platform Company At Discount [Note: if you read only one article from this issue of the SSIN this should be it.  Fantastic stuff from the always excellent John Allen.  After reading it I decided to "go for it" and I traded in all of my substantial position in $BLVD for the warrants.]

Capitol Acquisition Corp. II Completes Merger with Lindblad Expeditions, Inc.

Exploration cruise firm Lindblad sets course for expansion

Lindblad Expeditions starts trading on Nasdaq

GP Investments Acquisition Corp. Announces the Separate Trading of Its Ordinary Shares and Warrants Commencing July 10, 2015

Acquisition-focused companies meet soaring demand on Bay Street [Note: there's a ton of new SPACs in Canada, but none have announced an acquisition yet]



Should You Follow The Green Brick Partners Road?


Activist Investors

A New Activist Position in AdCare Could Cause the Stock to More Than Double

TeleCommunication Systems mulls 'strategic alternatives' to enhance stockholder value [Note: $TSYS shot up on this news.  Small Cap activist Becker Drapkin has an incredible track record. I personally did very well following them into PowerSecure $POWR]

The Solitron proxy battle heats up

MagnaChip: Activist Pleasant Lake Comes Calling

Activist investor doubles stake in John Menzies

Break Up ConAgra: What Is It Worth?


Whale Watching

Mario Gabelli: Four New Stock Picks

Greenlight Capital Discloses CNX Coal Resources Stake [Note: Greenlight owns a whopping 47.3% of CNX Coal Resources]

Winners and (big) losers from '14 Delivering Alpha conference

How Nelson Peltz Gets Results


Cheap REITs

The Recent Selloff in REITs Has Created an Amazing Buying Opportunity

The REIT Bloodbath: Game Plan For 2nd Half

No Bubbles Forming On Planet REIT-Dom

NorthStar Realty Finance Corp.: Time To Go Bottom Fishing For This 10% Yielder?

5 Health Care REITs Earn Buy Ratings [Note: I loved what Cannacord Genuity had to say about a stock that I have been talking about here lately New Senior Investment Group $SNR, "Among small caps, new market-entrant SNR also offers strong core growth from its private-pay, managed senior housing portfolio. We see the SNR’s near-term earnings power as capable of producing a $1.19 dividend, equating to a compelling 9% yield.]

CorEnergy Expands Its Credit Facility to $153 Million to Accommodate Growth [Note: With $100 million in dry powder additional acquisitions are still possible without issuing shares at this depressed level.]


Merger Arb

Williams: Energy Transfer Equity Is Going Hostile [Note: If I was a shareholder, I'd tell to take its over-leveraged self and its underwhelming offer & go jump in a lake.]



Gramercy: Switching to Plan B [Note: A nice article on the Gramercy situation from the excellent Clark Street Value. I personally do not like the style drift that we have seen from $GPT lately at all. With all of the screaming bargains out there that I mentioned in my recent post about REITs in STW (Stocks to Watch) I personally sold a large chunk of my $GPT holdings and rolled the profits into other REITs. It was a nice ride under DuGan, but I'm hopping off at this stop.]

Brookdale Senior Living On The Cusp

Billionaire Rales brothers ready for a new act in split of Danaher Corp.

In A Year Of Major Events For Reading International, Wanda's Purchase Of Hoyts Turns Our Head

Small-Cap Picks From Barron’s Beat the Market [Note: As someone mentioned to me on Twitter, they're comparing small caps to the S&P 500, not exactly the right comp.  I wonder how they did compared to a small cap index over the same period?]

Caveats in valuing conglomerates/SOTP situations


Thanks for reading. While this is a ton of news, I'm sure that there are some interesting things that I have missed.  If you've seen one, please share it in the comments section.  My goal in creating the Special Situation Investing Community was to create a free place on the web where like-minded individuals who love this style of investing like I do can come to discuss it and share ideas.  So please, comment, comment, comment.  The more dialog we have and ideas we have floating around the better it is for everyone.

I had planned on making the Special Situation Investing News look prettier, but it was so chock full of articles that I ran out of time, so I present it with the idea of form over function in mind ;).

Also, if you haven't already, make sure to click on the link at the top of the page to join this new special situation investing community. Doing so will enable you to receive notification when new articles are published here and to share your own ideas. Also, make sure to follow me on Twitter @TMFDeej.

Have a great weekend!

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