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Jason Knapp

Special Situation Investing News - 5/28/2015

Good morning and welcome to another edition of the Special Situation Investing News, a compilation of the most interesting and most actionable news on special situation investing from across the web.

ValueArtifex recently published an interesting article about a recent second stage demutualization aka thrift conversion at Kearny Financial $KRNY over on Seeking Alpha.

"With shares priced at $10.90 against a post-MHC adjusted book value of $14.88 per share, Kearny Financial is offered to investors at a substantial discount that will gradually resolve...

Over the next three years, management can return capital to shareholders through the institution of a dividend, share repurchases or deploy capital by acquiring nearby banks to increase franchise value...

The bank's sizable geographic footprint and high Tier 1 capital ratio also make the bank a compelling acquisition target once the three-year post-MHC waiting period has elapsed."

Kearny Financial: Priced At A Substantial Discount, This Strongly Capitalized Regional Offers A Compelling Return Proposition


Three new SPACs have launched in Canada over the past several weeks.  One of them, INFOR Acquisition Corp., is fairly large for a SPAC coming in at $200 million.  That's enough money to make an interesting acquisition.  Something to keep an eye on.

INFOR Acquisition Corp. Announces Completion of $200,000,000 Intial Public Offering of Class A Restricted Voting Units


Courtesy of MarketFolly, here's a link to the new issue of EVALUATION, a student publication from the NYU's Stern School of Business.  I actually didn't find much actionable investing information in it, there was a ton of interviews with PE folks, which don't interest me.  However, there is a section near the end with the Results from the 2nd Annual Stern Investment Idea Contest that was useful.  I particularly liked the winning entry, a sum-of-the-parts analysis of Masco $MAS.

Read more:


While I don't believe that this is hot off the press, it's still very actionable and well done.  Here's a long case by Elevation Capital for Adidas $ADDYY. I suppose in one way this link is timely in that one of Addidas chief rivals, Nike $NKE, was recently implicated in the FIFA soccer bribery scandal.


Here's another new SPAC to keep an eye on, GP Investments Acquisition Corp. $GPIAU.

"The Company's sponsor, GPIC, Ltd., is a wholly owned subsidiary of GP Investments, Ltd. ("GP Investments"). Our strategy is to focus on potential acquisition targets in the United States and Europe in industries and sectors where our management team has had direct investing experience, such as consumer goods and services, retail and hospitality."

GP Investments Acquisition Corp. Completes $172.5 Million Initial Public Offering


Barron's had an interesting short blurb on a stock hat I currently own the other day, American Realty Capital Properties $ARCP:

"American Realty Capital Properties is a common equity holding that, Beam acknowledges, “has lots of problems.” Beam avoided ARCP for years. “We said they just seem to be on an acquisitions pace that no one can keep up without making a mistake.” In 2014 the company became the target of an SEC inquiry related to its accounting practices. Since then the company has cleaned house, getting rid of its management team and launching an internal probe that found no irregularities in the value of its portfolio. With shares now around $9, the company is trading at about 12 times adjusted funds from operations, compared to an average around 24 times for the REIT market. “At a certain price everything turns to fertilizer,” he says. (In other words, it can grow.) Beam says the company is not out of the woods yet, but with the ongoing problems fully priced in, the shares are trading at a good entry point."

Today’s Top 5 Stock Picks: Safe REITs Yielding 5%


Dane Capital Management wrote up a SPAC that I wrote about as well earlier this week for Seeking Alpha, Capitol Acquisition Corp. $CLAC.

"We believe Capitol Acquisition Corp., a SPAC acquiring Lindblad Expeditions, is far too cheap relative to the premium multiple it will likely garner in the cruise/leisure/travel sector...       

Lindblad has high margins, an excellent ROIC, an unlevered balance sheet, significant barriers to entry via its exclusive National Geographic partnership and will likely accelerate growth through accretive acquisitions...       

This opportunity exists due to Capitol Acquisition's lack of investor visibility as a SPAC coupled with day-1 holders exiting their positions while largely indifferent to share price or fundamental value...       

We are optimistic regarding CLAC/Lindblad's prospects. While we think shares are attractive, we believe warrants offer triple-digit return potential. "

Capitol Acquisition Corp.: All Aboard, This Ship Is Ready To Sail


While I'm talking my book, here's another recent write-up from SA about a stock that I currently own, NiSource $NI:

"Unusually attractive income investment available due to a spin off...Near-term catalyst to revalue...Opportunity to hedge out much of the risk. "

NiSource: Lowest Risk, Highest Return Income Investment In 2015


That's all the time I have for right now.  For more special situation investing ideas like you saw here, make sure to follow me on Twitter @TMFDeej .

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