Tidbits

[KJP]

There's likely $1000 lying around in this odd-lot tender (note Section 7(d)(v) of the Offer to Purchase), but you do have to go through the effort of picking it up:  https://www.sec.gov/Archives/edgar/data/1829959/000119312523282534/d559699dsc13e4f.htm

[Dinar]

2 hours ago, KJP said:

There's likely $1000 lying around in this odd-lot tender (note Section 7(d)(v) of the Offer to Purchase), but you do have to go through the effort of picking it up:  https://www.sec.gov/Archives/edgar/data/1829959/000119312523282534/d559699dsc13e4f.htm

Be careful of withholding taxes!  They are very high in this tender offer.  

[ValueArb]

28 minutes ago, Dinar said:

Be careful of withholding taxes!  They are very high in this tender offer.  

 

My calculation is that the 15% withholding tax will work out to $7, so really only $300 gain for odd-lotters.

[Dinar]

27 minutes ago, ValueArb said:

 

My calculation is that the 15% withholding tax will work out to $7, so really only $300 gain for odd-lotters.

Correct.  I would caveat it though that it may not apply to IRA account, but check with your tax accountant to be sure.

[KJP]

3 hours ago, Dinar said:

Be careful of withholding taxes!  They are very high in this tender offer.  

 

You are right!  I completely missed this.  Following up on your note about IRAs, those interested should see this:

 

https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/t4016/exempt-s-organizations-under-article-xxi-canada-united-states-tax-convention.html

 

I don't think it's just a legal question.  Even assuming IRAs are exempt in theory, it looks like you and your IRA custodian have to file the right paperwork.  I'm going to try this in an IRA to see what happens.  I suspect my custodian will withhold the taxes.

[KJP]

2 hours ago, ValueArb said:

 

My calculation is that the 15% withholding tax will work out to $7, so really only $300 gain for odd-lotters.

 

I'm glad you and @Dinar were paying better attention to the details than I was.  I agree the withholding tax will be very high unless your exempt for some reason.

[Sweet]

Pfizer at 10 year low.

[ValueArb]

On 12/2/2023 at 6:14 PM, KJP said:

 

I'm glad you and @Dinar were paying better attention to the details than I was.  I agree the withholding tax will be very high unless your exempt for some reason.

 

Occasionally tender offers get modified to strip out the odd lot provision when its abused. I've read about the DCBO arbitrage in so many places now that I'm worried about this happening.

[Sweet]

I too have never heard of them.  Looks interesting:

 

 

[ValueArb]

16 hours ago, Sweet said:

I too have never heard of them.  Looks interesting:

 

 

 

Nothing better than finding a good company operating in obscurity. Thanks for sharing!

[Saluki]

I like behavioral economics books like Freakonomics, Thinking Fast and Slow, and The Undercover Economist.  I was talking to a friend recently about the author of one of these books who used to write a Dear Abby type advice column called Dear Economist where people would ask life advice and he would answer from the perspective of an economist. I googled and saw that although he doesn't write the column anymore, he has the old articles on his blog.  Here's a sample:

 

Can a cheap wine be a winner at dinner? | Tim Harford

 

Enjoy. 

[ValueArb]

https://www.bloomberg.com/news/articles/2023-12-19/demise-of-small-caps-haunts-wall-street-in-the-age-of-big-tech?srnd=markets-vp

 

Quote

Since markets soured at the start of 2022, the Russell 2000 is still down roughly 12%, while the S&P 500 and Nasdaq 100 have more or less recouped their losses.

 

Quote

All that emboldened a Furey Research Partners strategist to sum up the threat to the asset class in blunt terms in a recent note: “It is time to face the facts — the “Death of Small Cap Equities” is upon us...

 

He still sees a resurgence for the cohort fueled by wide valuation discounts. Yet Burton understands the challenges that have spurred investor apathy. At the center of the concern is evidence of impaired profitability that some worry has become a permanent feature of the market landscape. According to Verdad, the median American small cap in 1995 posted gross profits of about 29% over assets. Now it’s just 14% — even excluding health care, with its share of profitless biotech and pharma stocks.

 

The contrast in balance sheets among big and small businesses has also become stark. Over the past two decades, the largest US companies doubled their earnings relative to interest payments, Societe Generale SA data show. That fortified them against the impact of rising interest rates. Small caps are nowhere near matching the feat.

 

Stranger still, this deterioration has been mostly an American phenomenon; in Japan and Europe, little has changed, according to Verdad.
 

“We see secular reasons why it won’t re-rate back to those high levels,” said Thushka Maharaj, a multi-asset strategist at JPMorgan Asset Management, referring to the long-term outlook for US small-caps. “It’s more profitable companies staying private because they have financing privately, but also large established companies growing their revenue because of this concentration in new innovative technology.”

 

[ValueArb]

On 12/2/2023 at 12:38 PM, KJP said:

There's likely $1000 lying around in this odd-lot tender (note Section 7(d)(v) of the Offer to Purchase), but you do have to go through the effort of picking it up:  https://www.sec.gov/Archives/edgar/data/1829959/000119312523282534/d559699dsc13e4f.htm

 

On 12/2/2023 at 2:51 PM, Dinar said:

Be careful of withholding taxes!  They are very high in this tender offer.  

 

Update to you and anyone else who might be playing the DCBO tender offer, if you have not tendered yet you can sell your shares right now for a little over $51.50. I actually got out at $51.29, figure its worthwhile to avoid the hassle of tendering and the minor risk they pull the odd lot provision or that I get stuck paying withholding taxes even though shares were all from IRAs. Thanks to Interactive Brokers for not getting their corporate transaction forms ready yet so I could still sell my shares.

 

My guess is that because so many shares are locked up in the tender that there is a lack of sellers, so I might be premature in getting out. I'm putting on some popcorn and watching to see if it busts over $55 this week, which would be both hilarious and painful to anyone locked into the tender.

[nafregnum]

On 10/31/2023 at 5:47 PM, Spekulatius said:

Sarepta Risk and the FDA (Drugs that don’t work but get approved anyways due to pressure from orchestrated patient advocacy groups)

https://open.substack.com/pub/johnhempton/p/sarepta-risk-and-the-fda?utm_campaign=post&utm_medium=web

 

From a book I just read, here's some supportive evidence of this kind of thing happening:

 

“Aducanumab is the first new drug to be approved for Alzheimer’s treatment in nearly twenty years. The FDA’s approval of aducanumab proved to be one of the most controversial in recent memory. Not only has the drug been considered to be clinically ineffective, a third of patients getting aducanumab suffered swelling or bleeding in the brain. Not a single member of the FDA expert advisory panel voted in favor of its approval, and three of the committee members resigned in protest, one calling it “probably the worst drug approval decision in recent US history.” The response from the scientific community may best be summed up by a commentary written by the head of the American Geriatrics Society titled, “My Head Just Exploded.…”

Check out the whole fascinating saga in https://see.nf/aducanumab. A congressional investigation concluded the approval of aducanumab was “rife with irregularities,” raising “serious concerns about FDA’s lapses in protocol and [the drug company] Biogen’s disregard of efficacy.  That didn’t stop the FDA from its 2023 accelerated approval of a similar antibody, lecanemab (Leqembi), of similar questionable efficacy and safety.” 

 

Excerpt From
How Not to Age
Michael Greger, M.D., FACLM

 

[Sweet]

I once read the results of a product in clinical trials for heart diseases.  I couldn’t see any evidence that it produced a desirable effect.  Believe it was approve by the FDA anyway.  I was surprised by that decision. 

[Sweet]

Got the table below from https://microcapclub.com/multibaggers/ which is run by Ian Cassel.

 

They look for small caps that are many multibaggers.

 

It’s the second time today I’ve seen XPEL.

Might be of interest to some.  Hopefully the table formats ok

 

1	Company	Symbol	DWP	PWP	Price Today/  *Takeout Price	Currebt Return
2	XPEL	XPEL	6/10/13	$0.36	$56.16	13597.56%
3	Celsius Holdings	CELH	7/10/19	$4.25	$50.04	3423.94%
4	Straight Path Communications	STRP*	10/2/13	$5.58	$184.00	3197.49%
5	Napco Security Technologies	NSSC	12/18/11	$2.15	$34.72	3144.86%
6	HemaCare	HEMA*	2/23/17	$1.00	$25.40	2440.00%
7	US Concrete	USCR*	11/17/11	$3.12	$74.00	2271.79%
8	Heska Corp	HSKA*	10/22/13	$5.74	$120.00	1990.59%
9	Smith Midland	SMID	1/25/13	$1.89	$38.00	1910.58%
10	Willdan Group	WLDN	8/28/12	$1.21	$21.69	1692.56%
11	BioSyent	CVE:RX	2/17/12	$0.55	$9.05	1408.33%
12	Zynex	ZYXI	11/16/11	$0.75	$10.64	1318.67%
13	BlueLinx Holdings	BXC	9/29/16	$9.87	$113.59	1192.26%
14	EVI Industries	EVI	11/16/12	$1.89	$23.99	1169.31%
15	Neogenomics	NEO	7/13/12	$1.80	$20.73	1051.67%
16	NV5 Holdings	NVEE	4/23/14	$10.00	$112.28	1033.00%
17	Positron	POSC	3/29/20	$0.13	$1.45	1015.38%
18	Goeasy	TSE:GSY	2/3/14	$15.10	$160.57	962.67%
19	FitLife Brands	FTLF	7/4/14	$2.09	$21.06	907.66%
20	KORU Medical Systems	KRMD	6/11/14	$0.29	$2.38	852.00%
21	Transcat	TRNS	5/17/17	$11.90	$107.65	812.29%
22	Centrus Energy	LEU	4/24/20	$6.18	$54.17	776.54%
23	Galaxy Gaming	GLXZ	10/3/11	$0.24	$2.05	754.17%
24	UFP Technologies	UFPT	6/28/16	$21.16	$176.60	753.14%
25	Ergomed PLC	LON:ERGO	1/18/16	$166.00	$1,346.00	710.84%
26	Amryt Pharma	AMYT*	11/22/20	$1.58	$12.50	689.14%
27	Photon Control	PHO.TO*	7/23/14	$0.47	$3.60	665.96%
28	Pro-Dex	PDEX	7/19/14	$2.14	$17.21	661.50%
29	Impinj	PI	2/17/18	$11.07	$88.01	629.77%
30	Caesars Entertainment	CZR	4/14/15	$6.62	$46.82	607.25%
31	InfuSystems	INFU	3/19/13	$1.58	$10.70	603.95%
32	OneSoft Solutions	CVE:OSS	8/6/15	$0.11	$0.75	581.82%
33	Evergreen Gaming	TNA.V*	5/15/16	$0.13	$0.89	581.06%
34	Misonix	MSON*	11/7/12	$4.12	$28.00	579.61%
35	Where Food Comes From	WFCF	3/2/12	$2.00	$13.51	575.50%
36	TechPrecision Corp.	TPCS	1/25/16	$0.68	$5.50	570.73%
37	Global Atomic	TSE:GLO	2/29/20	$0.40	$2.74	568.29%
38	Gentium SpA	GENT*	2/2/12	$8.45	$56.00	562.72%
39	Luna Innovations	LUNA	6/12/15	$1.10	$7.10	551.38%
40	DocGo	DCGO	5/16/21	$9.99	$5.39	539.00%
41	RCI Hospitality Holdings	RICK	5/26/14	$10.50	$66.45	532.86%
42	Score Media and Gaming	SCR.TO*	11/11/19	$5.90	$36.51	518.73%
43	Attunity	ATTU*	4/26/12	$3.80	$23.50	518.42%
44	Total Telecom	CVE:TTZ	12/20/16	$0.07	$0.49	512.50%
45	Green Brick Partners	GRBK	12/5/14	$8.31	$52.57	511.28%
46	Tornado Global Hydrovacs	CVE:TGH	1/5/17	$0.08	$0.48	500.00%
47	Dot Hill Systems	HILL*	4/12/13	$1.67	$9.75	483.83%
48	Simulations Plus	SLP	7/12/16	$7.77	$45.41	470.48%
49	Trisura	TSE:TSU	7/16/17	$23.71	$33.86	467.17%
50	Kneat.com	TSE:KSI	1/8/17	$0.50	$3.00	445.45%
51	Optex Systems	OPXS	7/18/18	$1.10	$5.99	444.55%
52	AMREP Corporation	AXR	1/13/16	$4.10	$21.75	437.04%
53	EACO Corporation	EACO	4/4/15	$6.25	$33.85	428.08%
54	Idaho Strategic Resources	IDR	12/19/13	$1.26	$6.20	421.01%
55	Genie Energy	GNE	8/12/21	$6.06	$29.50	386.80%
56	Sono-Tek	SOTK	7/8/14	$1.20	$5.52	375.86%
57	Liberator Medical	LBMH*	1/11/13	$0.71	$3.35	371.83%
58	Collectors Universe	CLCT*	4/22/20	$19.57	$92.00	370.11%
59	Alphatec Holdings	ATEC	10/2/17	$2.65	$15.09	368.63%
60	Clinuvel Pharmaceuticals	CLVLY	4/28/15	$2.35	$10.97	366.81%
61	Viemed Healthcare	TSE:VMD	1/4/18	$2.10	$10.45	366.52%
62	Docebo	TSE:DCBO	10/10/19	$11.41	$67.97	344.25%
63	Arcturus Therapeutics	ARCT	8/17/17	$7.14	$31.70	343.98%
64	Torotel	TTLO*	8/28/19	$1.40	$6.17	340.71%
65	Ducommun	DCO	4/5/12	$11.77	$51.75	339.68%
66	OptimizeRx	OPRX	3/8/12	$3.30	$14.00	324.24%
67	Electromed	ELMD	3/24/15	$2.50	$10.64	320.55%
68	eXp World Holdings	EXPI	5/28/17	$3.65	$15.19	316.16%
69	LiveChat Software	WSE:LVC	8/9/19	$35.60	$147.80	315.17%
70	Fab-Form Industries	CVE:FBF	3/9/17	$0.40	$1.66	315.00%
71	Sapiens	SPNS	2/10/14	$7.30	$29.20	310.69%
72	Hamilton Thorne	TSE:HTL	11/30/14	$0.36	$1.35	309.09%
73	Mama's Creations	MAMA	7/24/17	$1.15	$4.66	305.22%
74	Valeura Energy	TSE:VLE	3/28/16	$0.72	$2.91	304.17%
75	Energy Fuels	UUUU	11/11/19	$1.96	$7.68	291.84%
76	Research Solutions	RSSS	3/2/16	$0.60	$2.65	289.71%
77	ADF Group	TSE:DRX	2/16/21	$1.72	$7.01	289.44%
78	Propel Media	PROM	7/27/18	$0.21	$0.89	286.96%
79	Solitron Devices	SODI	11/30/20	$4.12	$15.89	285.68%
80	PharmChem	PCHM	12/5/16	$0.69	$2.65	284.06%
81	IBEX Technology	CVE:IBT	2/11/21	$0.29	$1.14	280.00%
82	IMImobile PLC	IMO.L*	12/28/16	$157.00	$595.00	278.98%
83	Butler National Corporation	BUKS	2/24/15	$0.18	$0.72	278.95%
84	Hudson Technologies	HDSN	7/24/12	$3.50	$13.19	276.86%
85	FitLife Brands	FTLF	12/30/13	$5.63	$21.06	274.07%
86	Leatt Corp	LEAT	3/30/15	$2.30	$9.35	274.00%
87	Monarch Cement	MCEM	11/23/16	$42.06	$153.00	263.77%
88	IEC Electronics	IEC*	2/22/16	$4.27	$15.35	259.48%
89	Alter NRG Corp	NRG.TO*	12/8/12	$1.40	$5.00	257.14%
90	Performant Financial	PFMT	12/20/20	$0.76	$2.92	256.10%
91	Cogstate	ASX:CGS	1/27/20	$0.42	$1.46	256.10%
92	Escalade	ESCA	2/25/13	$5.83	$20.74	255.75%
93	PDC Energy	NASDAQ:PDCE*	7/2/11	$20.25	$72.00	255.56%
94	ARI Network Services	ARIS*	12/3/12	$0.39	$1.35	246.15%
95	SharpSpring	SHSP*	4/21/15	$4.98	$17.10	243.37%
96	Quest Resources	QRHC	12/13/17	$1.96	$6.96	241.18%
97	Innodata	INOD	11/23/15	$2.53	$8.58	239.13%
98	Crawford United	CRAWA	8/14/17	$9.40	$32.00	236.84%
99	Trupanion	TRUP	3/28/16	$9.29	$30.98	233.48%
100	M-Tron	MPTI	1/23/23	$10.10	$33.46	231.29%
101	Rosetta Stone	RST*	9/12/14	$9.07	$30.00	230.76%

[Dalal.Holdings]

On 12/19/2023 at 10:50 PM, nafregnum said:

 

From a book I just read, here's some supportive evidence of this kind of thing happening:

 

“Aducanumab is the first new drug to be approved for Alzheimer’s treatment in nearly twenty years. The FDA’s approval of aducanumab proved to be one of the most controversial in recent memory. Not only has the drug been considered to be clinically ineffective, a third of patients getting aducanumab suffered swelling or bleeding in the brain. Not a single member of the FDA expert advisory panel voted in favor of its approval, and three of the committee members resigned in protest, one calling it “probably the worst drug approval decision in recent US history.” The response from the scientific community may best be summed up by a commentary written by the head of the American Geriatrics Society titled, “My Head Just Exploded.…”

Check out the whole fascinating saga in https://see.nf/aducanumab. A congressional investigation concluded the approval of aducanumab was “rife with irregularities,” raising “serious concerns about FDA’s lapses in protocol and [the drug company] Biogen’s disregard of efficacy.  That didn’t stop the FDA from its 2023 accelerated approval of a similar antibody, lecanemab (Leqembi), of similar questionable efficacy and safety.” 

 

Excerpt From
How Not to Age
Michael Greger, M.D., FACLM

 

 

Even better is that if Aducanumab got full medicare support, it would become the most expensive drug ever for medicare at tens of thousands of dollars per year per patient (and medicare is already a massive expenditure as it is)...a massively expensive drug that probably doesn't work paid for by the U.S. taxpayer...absolutely disgusting.

 

https://www.nia.nih.gov/news/experts-estimate-future-spending-medicare-aducanumab-treatment#:~:text=The analysis revealed that if,impact on Medicare's annual budget.

 

I remember supposedly intelligent investor types were pumping BIIB when it was approved. Reminds me in many ways of Valeant...

 

Edited December 24, 2023 by Dalal.Holdings

[Sweet]

Has anyone looked at the UK company Legal and General?

 

It is an insurance company (among other things) and has a fat dividend and a relatively low PE.

 

It has negative revenue in the past few years, something I cannot get my head around.  The details of this company are over my head unfortunately.

 

[gfp]

17 minutes ago, Sweet said:

Has anyone looked at the UK company Legal and General?

 

It is an insurance company (among other things) and has a fat dividend and a relatively low PE.

 

It has negative revenue in the past few years, something I cannot get my head around.  The details of this company are over my head unfortunately.

 

 

A big annuity business like L&G with a big traditional corporate bond investment portfolio will trade in the short term with the direction of interest rates.  So keep in mind your expectations for UK & US interest rates going forward.

 

[Sweet]

On 1/4/2024 at 12:33 PM, gfp said:

 

A big annuity business like L&G with a big traditional corporate bond investment portfolio will trade in the short term with the direction of interest rates.  So keep in mind your expectations for UK & US interest rates going forward.

 

 

Thanks GFP.  It’s too hard for me so decided to just move on.

 

[Sweet]

I like John Huber’s writing, he makes the complex simple.  I don’t have a subscription though.  Anyone know what company he is referring to?

 

https://basehitinvesting.substack.com/p/a-royalty-on-the-growth-of-others

 

Edited January 5 by Sweet

[ValueArb]

23 minutes ago, Sweet said:

I like John Huber’s writing, he makes the complex simple.  I don’t have a subscription though.  Anyone know what company he is referring to?

 

https://basehitinvesting.substack.com/p/a-royalty-on-the-growth-of-others

 

 

My first guess is NRP.

[Sweet]

8 minutes ago, ValueArb said:

 

My first guess is NRP.

That was my thought too because he had a large new holding in it:

https://whalewisdom.com/filer/saber-capital-managment-llc

 

Thermal coal doesn’t much interest me, and as I’ve learned from investing in energy, expectations that management will pay out nearly always disappoint.

[gfp]

Yes that is a good guess and I assume it is correct.

[Spekulatius]

1 hour ago, Sweet said:

 

Thanks GFP.  It’s too hard for me so decided to just move on.

 

Besides, all UK stocks suck, doesn't matter what business they are in (tongue in cheek comment)