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Jason Knapp

How to Buy Filet Mignon at Beef Jerky Prices...Special Situation Investing News - 8/27/2015

I'm going to kick things off today with an update to a special situation that I have written numerous times in the past, the REIT formerly known as American Realty Capital Properties $ARCP.  There has been a number of very bullish developments since I started writing about this company, now named VEREIT $VER, yet it's stock price has continued to decline as a result of general market weakness and the selloff in REITs on an unwarranted fear of rising interest rates.

A one-year chart of $VER (blue) vs. the S&P 500 (red) (click to enlarge)

For anyone not familiar with the story of this company or its previously scummy management, I suggest reading my post on the subject from June: 

Mr. Market Hates Uncertainty, But Investors Can Profit From It

The recent bullish developments at VEREIT include:

  1. The naming an impressive REIT turn-around specialist, Glen Rufrano, as its new CEO.
  2. A culling of over $900 million in non-core non-controlled joint ventures, flat leases, restaurants and non-core assets to reduce the company's risk profile, lower its debt level and ultimately lower its borrowing costs.
  3. The reinstatement of its dividend at $0.55/share, equivalent to a yield of around 6.6% at today's price.

VEREIT currently trades at multiples that are significantly below its peers. Furthermore, contrary to popular belief that REITs are going to be punished by rising interest rates, the U.S. economy is strong yet the recent global turmoil has kept rates extremely low, creating a perfect environment for the sector.  So far Glen Rufrano has made all the right moves.  As he continues to work his magic at the company, he will turn something that can be purchased at beef jerky prices today into filet mignon. 

I have added to my position in the company on recent weakness.  

A host of great articles have been written about VEREIT lately.  I highly recommend that investors check them out.:

Glenn Rufrano Charts New Course for VEREIT

How VEREIT Plans to Rise Out of the Ashes of ARCP

VEREIT: The Dividend Is Back And The New Business Plan Appears Sound

Why I'm Giving VEREIT (Formerly ARCP) A Second Chance

VEREIT, Inc.: This REIT Has Just Become A 6% Yielder Again

Former Centro CEO Glenn Rufrano’s magic formula

VEREIT - A Major Buy From The New CEO

And now for the rest of the Special Situation News:



Soon to be spun off Ferrari Said to Consider Marchionne to Replace Retiring CEO

Just Value Looks At Ferrari Spinoff

A McSpinoff? Is McDonald’s Considering A Real Estate Spinoff?

B/E Aerospace #spinoff KLX - Energy Exposure Overshadows Great Aerospace Business

Sun Salutations…. Gaiam, Yoga and its Rising Star

Introducing Ingevity – WestRock’s Specialty Chemicals Spinoff



SPAC Weekly 8/24: Special Purpose Acquisition Corps 101

Activist Investors

Sandell is gearing up for a proxy fight after getting the Heisman from Ethan Allen

How Small Cap Activism Is Done

Guardian Funds Letter To Precision Castparts


Hedge / Mutual Funds

Ackman’s Pershing Square Loses 2015 Gains Amid August Stock Rout

Short Sellers Get Crafty With Positions in Beer Stocks

Sequoia Fund: Ruane, Cunniff & Goldfarb Investor Day 2015 [Transcript]

Hedge Funds Bruised by Stocks’ Meltdown

Hedgies hit hard by steep drop in oil prices


Investment Write-Ups

Bear of Burrard Street on Chicago Bridge & Iron

Scrutinizing Prescience Point's Short Attack On Amira Nature Foods

Bear of Burrard Street Recent Sell: Now Inc

How To Benefit From Arbitrage In A Market In Turmoil

Trevor Chang Recent Transaction: Purchased

Cable & Wireless - a prime take-out target in LatAm w/ 9% FCF yield down the pipes


Other Investing News

GM Has Lost $13 Billion In Market Capitalization Since The $5 Billion Share Repurchase Plan

Monsanto, rivals eye next step after Syngenta deal collapse

Google a ‘Conviction Buy’ Says Goldman Sachs

Disney Is About to Flood the Market With Star Wars Toys

Bear of Burrard Street: How I Find Investment Ideas

Noranda Aluminum reverse split a done deal

Mario Gabelli's Interview on Wall Street Week Courtesy of Market Folly



The economy grew much more quickly last quarter than initially thought

Deflation Risk Becomes Deflation Fact for the Fed

For Oil Producers Cash Is King, and That's Why They Just Can't Stop Drilling


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Have a great day!

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