+ Watch EXETF
on My Watchlist
Courtesy of Denali Investors the separation of Extendicare's Canadian and U.S. operations should cause the stockto rise. As an added bonus we get paid a massive bonus to wait for the event to happen. Jason
Corporate shenanigans can obscure––or reveal, depending––lots of hidden value. In this case, Extendicare is really two businesses stuck together as one. But one of them, the Canadian half, is much healthier than the American half. When split, a corporate move that is supposedly imminent, the Canadian half will look financially much healthier, and the American half will appear hugely undervalued because of its real-estate value. This is a classic spin-off right out of Joel Greenblatt's book You Can Be A Stock Market Genius. When the corporate ducks align and the two are split, the pop in the stock will prolly be over 100%. And there's even a monthly 0.04 cent dividend while we wait. That's free bananas folks!
The stock price underestimates the combined value of the Canadian and US unit. Once the US unit is spun off the true value will be realized.
Special Situations Portfolio pick:http://boards.fool.com/my-latest-buy-31016231.aspx?sort=whole#31045606This is a low-end, sometimes sleazy seeming operator in an absolutely necessary business - assisted living centers. BUT, the assets (owned real estate of the centers) appear to be dramatically under-recognized by the market - allowing maybe a double or triple from current prices. This is one to hold quietly and collect the 7% dividend until they announce results of their "strategic review", likely a sale or spin-off of assets, and then exit. Relying entirely on Jim Royal's research for the valuation.
Possible Special Situations preparing to divest its American health-care unit through a sale or spinoff... A TMFRoyal pick
Poaching from Jim Royal
Sale or Spinoff Should Create Value
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