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Jason Knapp

Special Situation Investing News - 7/28/2015

Good morning and welcome to another edition of the Special Situation Investing News. I know what you're thinking, two in one week...impressive.  I'd like to start the day off by taking a minor victory lap.  An investment idea that I got from the excellent Chris DeMuth Jr. of Rangeley Capital knocked the ball out of the park yesterday.  After I have owned the company for only a couple of months, Magnetek Inc. $MAG received a takeover offer yesterday and its stock soared 53.5%.  The investing thesis for the company was fascinating...that contributions an underfunded pension were obscuring the company's true earnings power and that when those contributions ended soon it would be able to either buy back a significant amount of stock or reinitiate its dividend.  

On a related side note, take a look at the company's news some place like Yahoo! Finance.  I count no fewer than eight ambulance-chasing lawyers who are "investigating" the sale of Magnatec "on behalf of shareholders."  Enough with these frivolous lawsuits already. We all know that the only people who have the potential to profit from them are the scummy lawyers who are involved.  These cases should be thrown out by the courts instantly rather than wasting everyone's time and money.

Columbus McKinnon to Acquire Magnetek, Inc. - http://finance.yahoo.com/news/columbus-mckinnon-ac...

Spinoffs

Chemours and the 10-Foot Pole - The excellent blog Oozing Alpha recently had an interesting post on the recent DuPont spinoff Chemours $CC.  It contains a ton of special situation information, though I personally disagree with its conclusion that the company is a buy.  The author presents a strong case about a hated company with post-spinof selling creating an interesting entry point, but to me Chemours' core Titanium Dioxide business is so commoditized and horrible and the company's environmental liabilities are so great that to use his words I personally would not touch it with a ten-foot pole.  Not to mention my personal distaste for both this company and its former parent.  Its former munitions plant in my state has created a massive cancer cluster.  Even if its current management is not responsible for the company's past misdeeds I personally find profiting from it distasteful. http://www.oozingalpha.com/chemours-and-the-10-foo...

Lockheed Martin To Buy Sikorsky; May Spin Off Its IT & Technical Services - http://www.stockspinoffs.com/2015/07/27/lockheed-m...

Yahoo: Aabaco Spin-Off Is A Highly Unattractive Investment - http://www.insidermonkey.com/blog/yahoo-aabaco-spi...

New trend in purchasing pushed Johnson Controls' spinoff of seat making business - http://www.crainsdetroit.com/article/20150727/NEWS...

Why Ferrari May Be Worth $11 Billion - http://www.foxbusiness.com/industries/2015/07/24/w...

Pinnacle to sell 15 casino properties to GLPI - http://news.worldcasinodirectory.com/pinnacle-to-s...

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Activist Investors

Barron's 13D: Voce Talks With FBR. http://online.barrons.com/articles/voce-talks-with...

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NOLs

Volt Information Sciences: The Turnaround Could Yield 100%+ Over 12-18 Months. Hot off the press, here's a new article from one of my favorite Seeking Alpha Authors, Dane Capital Management.  If you're only going to read one article in today's SSIN, this should be it. http://seekingalpha.com/article/3358535-volt-infor...

Einhorn-Controlled Homebuilder Expands Ops - http://www.oozingalpha.com/einhorn-controlled-home...

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SPACs

Del Taco was down slightly in after hours trading after reporting its latest quarterly results. Restaurants, Inc. Announces Fiscal Second Quarter 2015 Financial Results for Del Taco Holdings, Inc. - http://finance.yahoo.com/news/del-taco-restaurants...

Del Taco: Solid Results Should Draw Investor Attention - http://seekingalpha.com/article/3358675-del-taco-s...

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Other Investment Write-Ups

Investors Able to Get Biogen’s Pipeline for Free? - http://blogs.wsj.com/moneybeat/2015/07/27/investor...

Will Oil Or Interest Rates Rebound First? Here's an interesting quick Chris DeMuth Jr. article about how out of favor MLPs have become, making them an interesting investment.  Justy stay away from production MLPs and focus on the pipelines. - http://seekingalpha.com/instablog/957061-chris-dem...

A nat gas investing idea that most people are missing.  Another bull case for investing in pipelines. - http://www.cnbc.com/2015/07/23/a-natgas-investing-..

With Fantastic Fundamentals, Ventas Beat And Raised In Q2, And More Is Coming - http://seekingalpha.com/article/3357395-with-fanta...

Ventas Beats Senior Housing ‘Headwinds,’ With Spin-Off Ready to Roll - http://seniorhousingnews.com/2015/07/26/ventas-bea...

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Merger Arb

Orbitz Opportunities. As I have said in the past, I am not a huge fan of merger arb, but this one does look fairly interesting. - http://seekingalpha.com/instablog/957061-chris-dem...

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Liquidations

Opportunity Missed? (EPAX) - https://longtermvalue.wordpress.com/2015/07/24/opp...

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Economics / Other Interesting Investing News

Syngenta says Monsanto's $2 billion break-up fee comes with caveat - http://www.reuters.com/article/2015/07/27/us-synge...

Disney CEO Iger: ESPN could one day be sold direct - http://finance.yahoo.com/news/disney-ceo-iger-espn...

The untold tale of Compuware, Karmanos and a bitter breakup - http://www.freep.com/story/money/2015/07/25/karman...

Puerto Rico Lacks Cash for Aug. Bond Payment, Official Says - http://www.bloomberg.com/news/articles/2015-07-27/...

Hedge Funds: Puerto Rico Will Be Fine If Puerto Ricans Just Pay Their Taxes - http://dealbreaker.com/2015/07/hedge-funds-puerto-...

Canada Stocks Slump a 7th Day in Worst Losing Streak in 4 Years. The slump in natural resource prices has hit the Canadian Markets hard.  Combine that with what many believe is a housing bubble that's about to pop and Canadian stocks could be in for a bumpy ride. http://www.bloomberg.com/news/articles/2015-07-27/...

Oil Prices Fall to Four-Month Low Amid Chinese Stocks Rout. I sure am glad that I wasn't buying any oil-related stocks thinking that the rout was over.  Commodity price exposure is something that I try to stay away from in equities. http://www.wsj.com/articles/crude-oil-futures-slig...

China Learning Stock-Market Lessons the Hard Way. Geee, who would have thought that temporarily banning the sale of stocks would fail to prevent a correction in a market that had doubled in a matter of months on the back of margin-fueled speculation. Chinese equities fell another 1.7% today. - http://blogs.wsj.com/moneybeat/2015/07/27/china-le...

The going gets tough for value managers - http://www.ft.com/intl/cms/s/0/23bc0b7a-2fac-11e5-...

Despite the myriad of bull cases out there from a number of intelligent people, I have been bearish on Sears Holdings for quite some time.  It isn't even based upon any fancy calculations...just a gut feeling or perhaps common sense.  Everything Sears touches turns to mush.  Bulls point to the excellent long-term returns for the company, but what they neglect to mention is that its most attractive assets were monetized long ago.  Out of principle, I personally don't short stocks, but if there ever was an attractive short $SHLD is it.  Here's a hilarious commentary on the company courtesy of SecretCaps ‏@Toms_119 10h.

A hilarious cartoon courtesy of @PlanMaestro:

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 take a second to give back by sharing 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.

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 day!

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