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What I've been up to & a new pick

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August 25, 2010 – Comments (11) | RELATED TICKERS: LCAPA.DL

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Hi everyone.  I figured that I would drop in for a few seconds to say hello.  I've been very quiet on my blog this week because I am on vacation at my cabin in the mountains of Wyoming.  I've been coming out here all my life.  This is my 20-something-ish trip to Medicine Bow National Forest.  It's absolutely amazing how much things have changed over the years.  When I first started coming out we didn't even have a land-line in my cabin.  To use the telephone, one had to drive half an hour to the nearest pay phone.  Flash forward to today and I am able to access the Internet right here on my front porch on my iPhone.  I took the picture above on my phone the other day.

It's nice to take a break from the every day grind and forget about the daily fluctuation of the markets.  Having said that, as an investing junkie, I have not been completely ignoring things.

I came across a fascinating write-up on Liberty Media Capital (LCAPA) the other day over at Minyanville (which I actually usually find pretty annoying, but kudos to them for a solid article.  

Why Investing in Liberty Capital Is Almost a Sure Bet

http://www.minyanville.com/businessmarkets/articles/stock-market-liberty-capital-media-tracking/8/19/2010/id/29686 

In short, Liberty Capital is one of those funky tracking stocks that John Malone likes to use within his empire.  It represents a group of assets, mostly stakes in public companies, that Liberty Media owns.  This includes large positions in Time Warner Cable (TWC), Time Warner (TWX), Sprint Nextel (S), Viacom (VIA), Motorola (MOT), AOL (AOL), Live Nation Entertainment (LYV), CenturyLink (CTL), and Sirius XM Radio (SIRI).  At its current share price, Liberty Capital is trading at an astounding 58% of the value of the sum of its parts.  Now that's cheap.

Are these my favorite companies in the world?  AOL sucks, CenturyTel's land lines aren't great, and while I like Sirius / XM's product the debt-loaded company is constantly teetering on the verge of bankruptcy.  But at $0.50 on the dollar I'm definitely interested in them.   Plus, a number of the assets are solid.  Time Warner Cable, Motorola, and Live Nation all have some attractive qualities.

Using their recent market values, LCAPA's stakes in these companies are currently valued at $107/share (at the time the article was written...probably a little lower today).  After backing out $25/share, the value of these assets comes out to around $82/Liberty Capital share.  Compare that to its LCAPA's current share price of around $44.  

I don't see any immediate catalyst that will close this valuation gap, but Liberty recently announced that it is officially completely spinning-off some of its other tracking stocks, such as Starz.  Such a move will likely eliminate the discount that tracking stocks usually trade at.  I wouldn't be surprised in the least if Liberty did the same thing with Liberty Capital at some point in the future as well.

I decided to go long LCAPA here in CAPS the other day at $45.85/share.

That's all I have for now.  I'm taking it fairly easy this week, but I'll probably be back to regularly blogging during the first week of September...which is one of my favorite months.  I love the fall.  Cool weather.  Football.  Ahhhhh.

Deej 

11 Comments – Post Your Own

#1) On August 25, 2010 at 12:22 PM, chk999 (99.97) wrote:

For some reason the picture displays for second and then vanishes.

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#2) On August 25, 2010 at 1:01 PM, TMFDeej (99.26) wrote:

Hey chk999.  Strange.  Darn mountain Internet access ;).  Let's try it again.  Here's a bigger version.

IMG_0117

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#3) On August 25, 2010 at 1:13 PM, SweetMircha (91.14) wrote:

It's nearly as beautiful as Vancouver Island, BC, Canada or the Rocky Mtns also in BC. The only difference is, I live amidst the beauty everyday. You should see it for yourself one of these good days.  In the meantime DEEJ, keep enjoying your beauty at your cottage. It's really good for your health to experience such wonder.

Mary

 

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#4) On August 25, 2010 at 1:19 PM, TMFDeej (99.26) wrote:

Thanks Mary.  I've heard that Vancouver is absolutely beautiful.  I definitely need to get there one of these years.

I've got a ton more pictures that I'll try to upload if I have the time.  

Deej 

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#5) On August 25, 2010 at 1:45 PM, TMFDeej (99.26) wrote:

IMG_0099

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#6) On August 25, 2010 at 1:57 PM, TMFDeej (99.26) wrote:

IMG_0117

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#7) On August 25, 2010 at 6:30 PM, Option1307 (30.06) wrote:

I love Medicine Bow, but prefer Grand Teton National Park slightly more. Jackson, WY is one on the prettiest places on earth.

Enjoy your vacation!

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#8) On August 26, 2010 at 1:30 AM, walt373 (99.85) wrote:

LCAPA... ridiculous stock. Up 1700% and still has potential to double? How could people be so wrong lol... this was the legendary value stock selling at 3% of intrinsic value, I'm guessing I'll probably never see anything like this again. =(

I remember back in 08, when I read that some value investors were interested in this stock, and I never got around to researching it. But no use in regretting missed opportunities when there's still money to be made. So thanks for the info.

Btw, that's some gorgeous scenery. Living among that and still having internet access to research stocks, that's the life haha...

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#9) On August 26, 2010 at 11:45 PM, rofgile (99.43) wrote:

Beautiful photos, TMFdeej.

 Are there any other cabins out there for sale..?

 best wishes,

  Rof 

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#10) On August 29, 2010 at 3:19 PM, SockMarket (36.26) wrote:

great photos Deej. It is really a shame that you can't swim in there (w/o a wetsuit) but it is still gorgeous.

My personal favorite spot is in the Adirondacks, but to each his own.

 

- danielthebear 

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#11) On August 29, 2010 at 5:23 PM, TMFDeej (99.26) wrote:

Thanks everyone.  It certainly is beautiful there.  I got back home last night.  It's nice to go on vacation to the wilderness, but it's nice to come back home to civilization too :).

See you around CAPS...I've got a HUGE bunch of new picks ready to go for Monday.

Deej 

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