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Special Situation Investing News - 7/29/2012



July 29, 2012 – Comments (2) | RELATED TICKERS: PDH.DL , NTI.DL

As someone who loves investing and heck even reading about special situation investing, it struck me recently that I have to go all over the place to find news on the subject.  While there are some outstanding blogs on the subject out there, many of them are more value-oriented than special situation-oriented and there really isn't any one single place where investors can go to find out all of the relevant news on the subject.

I would like to ultimately use my blog as a place for investors to share this sort of information with similar-minded people.  Of course, time is always an issue, and as a father who works full-time and does consulting on the side I am somewhat short on spare time, but when I can I plan on sharing any relevant special situation news and articiles that I find here...even if it's just a quick link.  I'd rahtert have someone share a quick link with me on an interesting investment idea without much commentary than not know about it at all.

To anyone who's reading this, both of you ;), I would appreciate it if you would share any interesting special situation investing ideas that you come across in the comments section.  It seems as though special situation investing is a dying breed, I've seen a number of such Morningstar's close recently.  That is actually good news for those of us who are looking to invest in the area because it means that the trades will be less crowded.  Of course, it also means that ideas will be more difficult to come by :).  Hopefully we can change that here.

Here's the interesting articles that I have come across today.  I hope that you enjoy them as much as I do.  Thanks for reading everyone.  Have a fantastic day!

1) Here's an interesting article that quantifies the outperformance by so-called net-nets over the past several years. Many of these stocks at a tad on the small / illiquid side for my personal taste, but you can't argue with the results.  

Oddball Stocks - Where are they now? Part 2


2)  Here's yet another MLP IPO, which historically have significantly outperformed the S&P 500.

Northern Tier Energy tries variable-pay MLP

I realize that its yield is variable, but at its current planned distribution rate Northern Tier Energy has a current yield of nearly 19%.  

I have no love for refining, but the business will continue to exist for quite some time plus NTI owns more than just a refiner, it has storage tanks, a dock, pipeline interests, etc.  

When the yield-hogs realize how huge this company's distribution is, variable or not, they will likely chase the stock and drive up it's price.  

Regarding the variable nature of the dividend payment, let's face it, all dividends are ultimately variable. Either a company is going to earn enough to sustain its payout or it won't. If a company isn't making enough money to maintain its payment it will eventually have to be cut. Paying out a dividend in excess of available cash maintains the illusion of consistency, but ultimately is not sustainable.


3)  PetroLogistics is another recent MLP IPO that I have been keeping tabs on. I have been hesitant to buy into this one, not because of the variable nature of its payment, but because it is more commodity-related than I would like to see in a company that I am looking for dividend payments from (I know that distributions aren't exactly the same as dividends). I just don't know enough about the propy­lene market to determine where the price of this company's main product is headed, but the author of this article and several other people I have seen believe that a recovery in the propy­lene is coming towards the end of the year. Either way, PDH's yield is really high right now.  

PetroLogistics Delivers 9.58% Yield In A Tough Enviornment

The misspelling of the word "Environment" in the title of the article doesn't lend a whole lot of credibility to its contents, but I suppose that we've all made mistakes like that from time to time. I'm not looking for Shakespeare, just good ideas ;).  After all, as the saying goes, "Well Done is Beter than Well Said." 


4)  A lot of smart people have been touting the virtues of investing in Radio Shack (RSH) over the past year or two.  Thanks goodness I stayed far away from this falling knife:

Will RadioShack end up like Circuit City? 


2 Comments – Post Your Own

#1) On July 29, 2012 at 4:41 PM, portefeuille (98.92) wrote:

You might want to look at BB Biotech (BION:SW). It is currently the largest long position of my "fund".

July 13, 2012, BB Biotech rejects proposal by Vontobel Group

July 22, 2012, Vontobel Won’t Abandon BB Biotech Bid, SonntagsZeitung Reports


the fund's largest biopharma gains and largest biopharma losses.



the fund on twitter.

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#2) On July 29, 2012 at 4:55 PM, portefeuille (98.92) wrote:

#1 just posting that table as there are quite a few "special situation stocks" among those listed. And to promote my "fund". I need around 8 more twitter followers to reach 150 ... ;)

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