Your 2017 Best Ideas

[BG2008]

Seeing how sucessful the 2016 Best Ideas are, I propose that we start a 2017 Best Idea

 

Mine is still FRPH - The company trades at $44 and is worth $63 according to my estimate. Near term catalysts includes consolidation of the multi-family results into Q3 2017 financials.  The company has set up all the ground work to convert into a REIT pending Trumps tax legislation.  If corporate tax cuts pass through, then no REIT conversion.  If no corporate taxes, then will convert into REIT.  Win-win either way.  If converted will pay a $2.40 per share cash dividend. 

 

Although the upside is no where near the Dec 2015 price of low $30, it's good to invest along good capital allocators and sleep well at night. 

[ukvalueinvestment]

Would be great if people could not use tickers and just state the name of the stock.

 

Mine is Emergent Capital.  Formerly Imperial Holdings, it owns a large portfolio of secondary life settlements - face value over $3bln.

Having gone through a recapitalisation, it's liquidity issues are behind it and it is trading at a fraction of a book value which is guaranteed to grow over the long term.  I think we have a base case double or triple if management messes up and does stupid thing or ten bagger or more over the long term if management is sensible.

 

Only problem is, it's OTC micro cap and might be hard to pick up.

[Gamecock-YT]

http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/your-2017-best-ideas/

 

Maybe given it's almost September, you should be working towards the 2018 thread...

[HJ]

Would be great if people could not use tickers and just state the name of the stock.

 

Mine is Emergent Capital.  Formerly Imperial Holdings, it owns a large portfolio of secondary life settlements - face value over $3bln.

Having gone through a recapitalisation, it's liquidity issues are behind it and it is trading at a fraction of a book value which is guaranteed to grow over the long term.  I think we have a base case double or triple if management messes up and does stupid thing or ten bagger or more over the long term if management is sensible.

 

Only problem is, it's OTC micro cap and might be hard to pick up.

 

ukvalueinvestment, Don't know if you had the chance to vet and get a view on the management, or if your basis of investment is based solely on public filing.  But several years ago, there was a market wide issue surrounding the life settlement contracts.  It turns out that the contracts that were traded underperformed the actuarial table terribly (not a surprise as the contracts that actually traded were sold by the life insurers who have a view on which contracts to sell, and went through a round of adverse selection).  Some of the companies that were involved in the business on leverage actually got stressed.  Plus,  the business of taking out insurance on other people's life invites some shady characters in the business.

 

In any case, I have no view on the specific company, but do want to suggest that without a view on the character of the management, this is a tricky business.  As the saying goes, "price is what you pay, value is what you get."

[ukvalueinvestment]

That's why it's trading at a massive discount.  My thesis is that all of those issues are more than priced in - the policies are discounted at 16%, and a lot of the write downs have occurred.

[Guest Cameron]

US Neurosurgical.

[TBW]

I too have been buying Emergent.  Its very cheap here.  Def not a stock for everyone but I think more than compensated.

 

I see upside of 4x if management intelligently puts this into run-off.  UK how do you get to 10x?  Is that assuming they can grow the biz when they are on more stable footing?

 

One concern I have is tax, can they still use NOL's?  If, not then my upside is more like 3x

[james22]

BAM, cash.

 

BAM +19.72% YTD

[Picasso]

MX

[John Hjorth]

I hope that you'll open a separate topic in the investment ideas forum for MX, Picasso. The numbers for MX looks so weird to me, that it caught my interest. And yes, I'm bored.

[NoCalledStrikes]

 

One concern I have is tax, can they still use NOL's?  If, not then my upside is more like 3x

 

I wouldn't lose any sleep worrying about the NOLs.  In my history with Emergent, only the secured creditors charging 18% interest will have to worry about paying taxes.

[ukvalueinvestment]

 

One concern I have is tax, can they still use NOL's?  If, not then my upside is more like 3x

 

I wouldn't lose any sleep worrying about the NOLs.  In my history with Emergent, only the secured creditors charging 18% interest will have to worry about paying taxes.

 

The high interest debt disappeared with the recapitalisation

[villainx]

I hope that you'll open a separate topic in the investment ideas forum for MX, Picasso. The numbers for MX looks so weird to me, that it caught my interest. And yes, I'm bored.

 

I've been following MX too.  Been tempted to pick some up several times, but laziness and insufficient understanding has stopped me.

[Paarslaars]

MX

 

Would have been a great call 6 months ago...  ;)

[Patmo]

GNW

[Hielko]

I don't think I really have a favorite idea right now. I have a couple positions that I have liked for years now (Beximco and Conduril among others), and there are some nice special situations out there, but nothing extremely awesome is on my radar right now.

[NewbieD]

Not as many or strong favorites this year.

 

DDM Holding and Ferronordic Machines (spec sit) currently.

 

 

[gurpaul88]

GNW

 

Are you concerned about a repricing of the takeover?

[StevieV]

On GNW, my relatively uninformed guess is that the takeover is not going to go through.  Obviously, given the spread, the market doesn't believe it will go through.

 

I am not sure about management.  Two big questions:

 

(1)  Will they handle the buyout well?  To gurpaul88's question, would they accept a lower price from China Oceanwide?  There has been some chatter, but I don't particularly see that happening.  I think the bigger risk to the buyout is from not getting approvals rather than selling to China Oceanwide at a lower price.

 

(2) Is management preparing in case the buyout doesn't go through?  As alluded to by Patmo, operations seem to be going better, but management's comments have been all-in on the buyout.  Not sure if they are properly preparing for the possibility it is not approved.

 

[valcont]

MX

 

Would have been a great call 6 months ago...  ;)

 

I bought a small stake earlier this year after reading aviclara's (one of my favorites) thesis at VIC. I agree it was a low hurdle until now . They only have to meet the margins that they have been advertising since last year. But the Amoled growth story is still intact and they are the only independent provider. The back half of this year should see more growth.

[rolling]

My 2017 better idea: august is already ending but since i picked up as many as i could at and before the start of the year making it over 30% of my portfolio back then, I believe there is no hindsight bias:  Estoril Sol sgps

 

https://www.euronext.com/pt-pt/products/equities/PTESO0AE0000-XLIS

 

Operates 3 casinos in Portugal, won an online license to operate an internet casino in Portugal last year (sold 50% of the stake so that the other part entered with the software for free) and won an online sports betting license in Portugal last month (with that joint venture, the other part likely entered with the sofware again)

 

Quoted at 2,66€ to 3,2€ in the first 3 months 2017, has since distributed 0,335€ in dividends and is quoting at 11,2€. I stared my position at 1,15 last year and accumulated on the way up. Started selling a month ago (keeping it under 50% of the portfolio). The funny thing: after last thursday presentation of 1S2017 results I recalculated and reached the conclusion it was still cheap and it was a huge mistake to start selling a month ago, and even now it probably is still a good buy :)

 

My recalculated conservative estimate is that it is worth 17€/share. It might be worth more (or much more) if I am a little more optimistic (some would say realistic)

 

Ps: sorry if it sounds like bragging, but I can't help being happy :)

[ukvalueinvestment]

Congratulations.  How did you find it?

[rolling]

Congratulations.  How did you find it?

A guy mentioned it in a forum, since I took him for a good investor I researched it and went crazy and started accumulating every share i could buy... It was a no brainer, and some better than expected news made it an even better investment to the point of it still being cheap by now...

 

The funny thing is that while i valued the guy highly (I still do), he was still a youngster and had no money available to invest himself back then (i believe he is currently taking CFA level 2)... But I'm pretty sure he will end up well...

[Patmo]

GNW

 

Are you concerned about a repricing of the takeover?

 

No

[rkbabang]

My best investments this year haven't been stocks at all. It has been Ethereum (ETH) and Monero (XMR), my cost basis in both is in the single digits $USD.  Not to mention BTC which has done well too.

 

As far as stocks I'm currently accumulating WFCF and POEFF.