rolling Posted October 12, 2017 Posted October 12, 2017 Brk.b - reducing downside (and likely upside) in my portfolio. Sold some small cap and micro caps and made it my biggest position at over 40%
bskptkl Posted October 12, 2017 Posted October 12, 2017 CIBY CIBL owns 166,556 shares (43%) of ITCG and controls the vote with 55% ITCG received unspecified bid yesterday http://www.ictcgroup.net/wp-content/uploads/ICTC-PR-re-acquisition-proposal-10-10-17.pdf ICTG is 50 bid x 155 ask now, up from CIBL's cost of $23 caveat - a whopping total of 12 shares traded so far today!
writser Posted October 12, 2017 Posted October 12, 2017 Interesting, looked at it yesterday a bit as I owned CIBY in the past. What is your reasoning? CIBY NAV is ~$1650 with ICTG at $40, every $10 you add to the takeover price adds ~$100 to CIBY NAV. So you expect a takeover at $70 or higher? When I took a quick look at the ICTC financials that's like 10 EV/EBITDA, already taking into account their HQ closing. I don't expect the buyer to pay much more? Maybe I am missing how attractive their business is. Given that CIBY is extremely illiquid and has had a significant idle cash balance for years (and if I remember correctly they even wanted to use it to backstop a SPAC) so I'd only want to buy it at a significant discount. (just my 5 minutes of research, curious about your opinion)
bskptkl Posted October 12, 2017 Posted October 12, 2017 CIBY NAV is ~$1650 with ICTG at $40, every $10 you add to the takeover price adds ~$100 to CIBY NAV. (just my 5 minutes of research, curious about your opinion) I think they marked ICTG at $30 for that $1650 NAV - so the $50 bid currently imples an $1850 NAV = a 20% discount - but yeah it has been value trap in past...arguably not enough of a discount.
writser Posted October 12, 2017 Posted October 12, 2017 afaik CIBL has 16.6k shares outstanding, owns 20.9m cash and 166k shares ICTG per the latest 10Q for a ~$1650 NAV with ICTG at $40.
bskptkl Posted October 13, 2017 Posted October 13, 2017 afaik CIBL has 16.6k shares outstanding, owns 20.9m cash and 166k shares ICTG per the latest 10Q for a ~$1650 NAV with ICTG at $40. Company says they value ICTC at $5.367 million ($32 per share) representing cost of $3.7 and plus its share of ICTC earnings. This matches the elimination number on p 14 of balance sheet.
compoundvalue Posted October 14, 2017 Posted October 14, 2017 Supervalu. (It'll be awesome if it lives up to its name) Do you have a link to a thesis or anything like that ?! There's a write-up on VIC that sums up the thesis pretty well. It's a classic bad biz/good biz story with a bunch of noise in the numbers. It's mostly known as a retailer, but the new CEO is a wholesaler with extensive M&A experience, and the biz is increasingly becoming a pureplay wholesaler (thus setting itself up for multiple expansion). The major event was selling most of the retail biz last yeah to delever, but they still have some 200 company owned retail stores that I expect them to get rid of. They also own some 16 distribution centers (RE value in a retail play - where have we heard that before!) post their last acquisition where they'll have a bunch of sale-leaseback options. So basically, it seems like we have a quiet competent CEO in his best years where the market might not appreciate how the biz is transforming. There's always integration risks, but experience is a huge plus, and in wholesale distribution I think it's pretty straightforward. It's trading at around 4 times this years Ebitda guidance or around 6-7 times wholesale Ebitda, but wholesale should grow nicely with their latest acquisition and customers wins (grew some 12 pct. last quarter) and then you have a bunch of value unlocking options. Sometimes it can take ages for management to unlock value, but the CEO seems pretty intent on pulling the right levers. While retail isn't popular right now, privately negotiated asset prices seems priced to perfection most places, so I'd prefer if he acted swiftly before an eventual downturn. Couldn't find the VIC write up can anyone share a link maybe? After looking into it, I think the market totally misunderstands the company and the transformation strategy punishing SVU with a distressed retail operation multiple. Sale of Save-A-Lot and purchase of Unified Grocers ads a bit to the confusion which is why the opportunity probably exists. EBITDA run rate of ~$515m post Unified Grocers transaction, net debt should be less than $2bn post transaction including pension obligations capital leases and what not. EBITDA should be growing even without a turnaround/divestiture of the retail business, reasonable leverage. Potential catalysts: additional deleveraging (same TEV lower net debt), sale of the losing retail business, continued growth (and as a result multiple expansion) improved capital efficiency by a sale and leaseback of logistic centers and/or disposal of the retail business (and as a result multiple expansion). Downside on the other hand seems to be limited, even if they stop growing, debt levels are manageable and plenty of time to respond. The margin of safety seems adequate. Interesting situation, management seems competent and honest. all told the stock seems to be too cheap.... Thanks for the idea kab60!
John Hjorth Posted October 14, 2017 Posted October 14, 2017 Offtopic: Welcome to CoBF, compoundvalue! Back to topic.
DooDiligence Posted October 16, 2017 Posted October 16, 2017 Sold out of ESRX & put funds in CVS. Tired of losing sleep over something I don’t understand as well as I thought. Still long Jan 2019 $50 Calls & will prob ride them to 0. I fully expect that Amazon will announce they’re buying ESRX & it’ll shoot through the roof now that I’ve taken the loss (in a tax advantaged acct to add insult to injury.)
Rainforesthiker Posted October 16, 2017 Posted October 16, 2017 Over the last month built a large position in BAM (now second largest position). Bought Teekay Offshore Partners (TOO) a few weeks ago; Sold down a lot more EZPW recently
DTEJD1997 Posted October 17, 2017 Posted October 17, 2017 The market put Supervalu (SVU) on markdown...so I bought some more!
TwoCitiesCapital Posted October 17, 2017 Posted October 17, 2017 I've been rolling SHLD puts for the last 9-10 months or so. It's been quite a profitable strategy, but I had been winding down as business results continue to deteriorate with the horizon to have them fixed by shrinking. Following the sell-off over the past week, I have tripled the notional position in puts with strikes extending to December. At $5 a share, it becomes a lot more palatable to roll the dice on the company - particularly if I'm being paid ~10% per month to do so.
kab60 Posted October 17, 2017 Posted October 17, 2017 The market put Supervalu (SVU) on markdown...so I bought some more! Did the same yesterday plus some TRIP
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