If you have been following this blog for some time, you may recall the first move I recommended was the bonds of Bon-Ton Department Stores, which I suggested could be hedged by shorting an equivalent dollar value of the stock. At the time the bonds were at 46 and the stock was at $4. Now, […]
The Greek word for marketplace is “agora,” so the word “agoraphobia” literally means “fear of the marketplace,” and Congress seems to be suffering terribly from it lately. Given what has happened over the last couple of years their reaction is unsurprising. Indexing, long touted as the safe long-term option for the passive investor, has shown […]
As some of you may recall, I called Coinstar an attractive short target some months ago, and it didn’t exactly go so well. In fact, it did go exactly as high as $38.28, when I called for the short at $25.91. Of course, that was during a massive stock market rally; one of the purposes […]
Windstream (WIN) has just announced that they are acquiring yet another phone company, NuVox, for 280 million in cash, about 180 million in stock, and 180 million in assumed debt, total 640 million. NuVox focuses specifically on business, which makes it a desirable fit with Windstream’s plan to offset landline loss with high revenue customers. […]
As I stated yesterday, American Lorain has announced that they have sold stock and warrants totaling 5 million shares for $2.40, 1.75 million shares worth of warrants at a price of $3.70 that become exercisable six months after the transaction closes and have a term of 5 years thereafter, and 500 thousand shares worth of […]
As some of you may recall, I suggested getting out of Capstead Mortgage (CMO) on the grounds that its fat dividend (currently 17%) couldn’t last forever and that, at a price of $14.60 and a book value per share of $11.50, the price represented well over a year of excess dividends, and the Federal Reserve […]
Well, it’s official: Fairpoint has filed for bankruptcy. As Moyer’s Distressed Debt Investing states, the actual filing of a Chapter 11 is never a surprise. Although it may seem curious that its creditors reduced the size of their claim from 2.7 billion to 1 billion, the reality is that the creditors are going to become […]
Warren Buffett once wrote that in financial analysis, having an IQ above 125 is wasted and that success in investing is largely a matter of temperament. This tells us two things, one, that the world’s greatest investor thinks that dispassionate adherence to investing principles is more important than fancy quantitative models, and two, that Warren […]
Damodaran on Valuation claims that unnecessary financial assets, such as stocks or bonds or other securities of other corporations, have no effect on a company’s valuation, since the risk-adjusted discounted cash flow they produce is equal to their present value, so there is no incremental benefit to owning them or decremental drawback from getting rid […]
Those of you who watch Jim Cramer, of whom Seth Klarman said that he is a symptom of everything that is wrong with the financial world nowadays, will recall that last week he expressed approval of the safety of Windstream’s dividend. He also mentioned Fairpoint Communications (FRP), after qualifying his remarks with the fact that […]