Entries categorized as ‘Update’

New Graham Articles Added to ValueHuntr Collection

December 28, 2009 · 2 Comments

Several new articles, all originally written by Benjamin Graham, have been added to the Valuehuntr Collection under our “Resources” section. Two of the new articles are interviews conducted in 1976, the year Mr. Graham past away. Therefore, these documents provide readers with aclear  glimpse of Mr. Graham’s investing framework towards the end of his career. The added documents are:

Special Situations (1946)

Stock Market Warning: Danger Ahead! (1960)

The Renaissance of Value (1974)

A Conversation with Ben Graham (1976)

An Hour with Mr. Graham (1976)

Categories: Update
Tagged: benjamin graham letters documents warren buffett, partnership, Stocks, Value Investing

Biogen offers $356M for Facet Biotech; FACT Surges 74%; ValueHuntr Closes Position

September 7, 2009 · Leave a Comment

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We have exited our position in Facet Biotech (FACT) for a net gain of 58% since our posting on the company last April.

Biogen Idec Inc. said Friday it offered to buy its partner Facet Biotech Corp. for $356 million, and at the same time criticized Facet for entering a partnership with Trubion Pharmaceuticals Inc. last week.

Biogen said it would pay $14.50 per share for Redwood City, Calif.-based Facet. Biogen said the companies have been working together since 2005 to develop the cancer drug candidate volociximab and the multiple sclerosis drug daclizumab.

We added FACT to our portfolio last April, noting that the company was then trading at 46% of its net cash value (see article here). The big winner of FACT’s offer is Seth Klarman at Baupost Group, who doubled his stake in the company last May to 20% ownership.

In going public with its offer, Biogen was sharply critical of Facet, saying it stated its interest in August and offered to buy the company for $15 per share on Aug. 21. A week after that, Facet announced a collaboration with Trubion on a leukemia drug. Facet acquired the marketing rights to a potential leukemia treatment in return for a $10 million investment, $20 million upfront, and potential payments of as much as $176.5 million.

In a letter to Facet CEO Faheem Hasnain, Biogen said the Trubion deal reduces Facet’s value, noting that Facet shares are down 18.8 percent since the partnership was announced. Facet did not immediately return calls seeking comment.

Facet shares finished at $8.82 Thursday, making Biogen’s new bid a 64.4 percent premium. Biogen said it would not have to borrow money to complete the deal and said the bid would not require approval from its shareholders. It asked for a meeting with Facet’s board of directors.

The ValueHuntr Portfolio is now up 127% since April 2008, compared to -24% for the S&P500. The portfolio consists of secondary companies selling for less than their intrinsic value where a catalyst has been identified. For more information see here.

The performance of our portfolio can be tracked here.

Categories: News · Update
Tagged: facet biotech, FACT

Enpointe Technologies Inc. (ENPT) Completes Merger; Position Closed

August 12, 2009 · Leave a Comment

Enpointe Technologies Inc. (ENPT) has completed its merger transaction with Din Global Corp, and has been acquired for $2.50 per share. Previously, the company and third parties involved had set July 31, 2009 as the deadline for the completion of the merger. The deadline was later extended to August 14, 2009. For more, see SEC filing.

Categories: Arbitrage · Update
Tagged: Arbitrage, enpointe technologies, ENPT, Merger

Update: SOAP Position Closed for 49% Gain

July 30, 2009 · 1 Comment

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We have closed our position in Soapstone Networks Inc  (SOAP).  SOAP was added on March 9, 2009, when the company was trading at a 49% discount to its net cash value (see original report here). On June 15, 2009, the company announced that its Board of Directors had unanimously approved a plan of liquidation. The company declared an extraordinary cash dividend of $3.75 per share, plus $0.25-$0.75 per share in the future. Correcting for the approved initial distribution of $3.75, SOAP is trading at $0.50, which is in the middle range of the future distributions expected by management. We do not think that an additional potential gain of $0.25 justifies the risk of owning the stock, so we have closed our position for a 49% gain.

Categories: Liquidation · Special Situations · Update
Tagged: Liquidation, SOAP, Soapstone Networks

GE Capital Presentation to Investors

July 29, 2009 · Leave a Comment

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Yesterday, GE Capital executives updated analysts and investors on GE Capital’s progress on shrinking its balance sheet and reducing leverage. The presentation can be downloaded below.

ge-capital

Categories: Analysis · Update
Tagged: GE Capital, General Electric

Share the Knowledge

July 21, 2009 · Leave a Comment

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The Valuehuntr Blog is now open to contributors who would like their ideas published. Email us your article or investment idea and if approved, we will publish on our site with all proper credits. Please see the About Us page for more information on our investment philosophy.

Also, if you have any tips or sensitive company information that you would like to publish anonymously, let us know.

 Sincerely,

Valuehuntr Team

 

Categories: Update
Tagged: contributors, valuehuntr blog

Update: Enpointed Technologies Inc. (ENPT) extends Merger Deadline

July 14, 2009 · Leave a Comment

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Enpointed Technologies Inc. (ENPT) has extended its merger completion deadline to August 14, 2009. Previously, the companyand third parties involved had set July 31, 2009 as the deadline for the completion of the merger. For more, see SEC filing.

On March 1, 2009, the company agreed to be acquired for $2.50/share in cash.

Categories: Special Situations · Update
Tagged: ENPT, Merger

Update: Life Sciences Research (LSR) to be Acquired in Going Private Transaction; Valuehuntr Exits Position

July 9, 2009 · 2 Comments

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Life Sciences Research, Inc. (LSR) announced today that it has entered into a definitive merger agreement to be acquired by Lion Holdings, Inc., an entity controlled by LSR’s Chairman and Chief Executive Officer, Andrew Baker, for $8.50 per share in cash. Mr. Baker currently beneficially owns approximately 17.5% of the outstanding shares of LSR.

On our March 16, 2009 post, we specified that LSR was a special situations play with a high probability of realization. We also pointed out that this was not a long-term play, as its mediocre earnings power did not make it a long-term value candidate. We are now closing our position on LSR, for an absolute return of 20%.

Under the terms of the merger agreement, LSR stockholders, other than Mr. Baker and his affiliates, will receive $8.50 in cash for each outstanding share of LSR common stock, representing a premium of approximately 77 percent over LSR’s closing share price of $4.79 on March 3, 2009, the last trading day prior to public announcement of Mr. Baker’s initial March 3, 2009 proposal to acquire the Company for $7.50 per share. The $8.50 per share purchase price also represents a premium of 13% over Mr. Baker’s initial proposal, and a premium of 18% over LSR’s closing share price of $7.18 on July 8, 2009, the last full trading day prior to today’s announcement.

A Special Committee consisting of LSR’s independent directors was charged with evaluating strategic alternatives for the Company and unanimously recommended approval of the merger. Based upon this recommendation, LSR’s Board of Directors (with Andrew Baker and Brian Cass abstaining), approved the merger and resolved to recommend that LSR stockholders approve the merger.

Lion Holdings, Inc. has secured equity and debt financing commitments that provide for the necessary funds to consummate the transactions contemplated by the merger agreement. The transaction is expected to close in the fourth quarter of 2009 and is subject to certain closing conditions, including approval by LSR stockholders.

 

Categories: Arbitrage · Investing · Special Situations · Update
Tagged: andrew baker, LSR, Merger, ValueHuntr

Update: June Performance

July 2, 2009 · 3 Comments

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The month of June marked our first monthly underperformance relative to the S&P500 since inception. Our Valuehuntr Portfolio was down nearly 3% for June vs. 0.02% gain for the S&P500. Five out of the eight stocks in our portfolio were down for the month. Overall, all investments have been profitable with the exception of FACT.

Since inception, the Valuehuntr Portfolio has returned 192% vs. 25% for the S&P500. Since March, additions to the portfolio have become less frequent. This is mostly because bargains have become increasingly harder to find as the market has recovered from its March lows.

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posic

 

chart

Using our CAVM model, we estimate that our portfolio has an expected annual return of 18%, a sharp contrast with the 43% expected returns we estimated back in March. The chart below shows that on average, the possibl payoff for the equities in the portfolio are of asymmetric nature. Namely, we can expect our portfolio to grow at a rate of at least double the US GDP growth, even when the probability of loss is 90%. For more information on our CAVM model, see here.

CAVM

Categories: Update
Tagged: monthly performance, Update, Valuehuntr portfolio

Soapstone Networks submits Preliminary Proxy

June 23, 2009 · Leave a Comment

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Soapstone Networks Inc. (SOAP) just submitted its preliminary proxy with the SEC regarding the Board’s plan to dissolve the company. The section of the proxy we have posted below, in particular, provides some insight on the management’s estimated range of cash distribution to shareholders. Footnotes are included, some of which explain the assumptions behind the specified range.

soap-est

(1) Estimated balance is net of cash used for the period April 1, 2009 through June 30, 2009 for estimated operating expenses ($4.2 million), severance costs ($1.7 million) and accounts payable and accrued liabilities ($1.5 million), partially offset by interest income ($0.1 million).

(2) Estimated Extraordinary Dividend payments of $55.8 million are associated with 14,886,107 shares of our common stock outstanding as of June 16, 2009 and Extraordinary Dividend payments of $1.7 million are associated with 460,828 shares of our common stock subject to currently vested options that are in-the-money at $4.13, the per share closing price of our stock on the Nasdaq Global Market on June 16, 2009, which options are assumed to be exercised prior to the dividend payment.

(3) Estimated proceeds from the exercise of currently vested options for 460,828 shares of our common stock that are in-the-money at $4.13, the per share closing price of our stock on the Nasdaq Global Market on June 16, 2009, which options are assumed to be exercised prior to the dividend payment.

(4) Estimated range of cash proceeds from sale of assets, including technology, intellectual property, furniture, fixtures and equipment.

(5) Estimated operating expenses for the period of July 1, 2009 through June 30, 2010 for personnel, facilities and other expenses to conduct our wind up operations but exclusive of all other line items specifically allocated in the table above.

(6) Estimated severance costs for remaining employees involved in the wind up operations.

(7) Estimated accounts payable and accrued liabilities as of June 30, 2009.

(8) Estimated range of cash payments associated primarily with lease and lease related commitments for our headquarters facility.

(9) Estimated range of cash use for the purchase of insurance, including Directors and Officers liability insurance covering the six years from the date of stockholder approval of the plan of dissolution

(10) Estimated range of cash use for professional fees related to our liquidation and dissolution, as well as ongoing SEC reporting requirements.

(11) Estimated range of cash use for unanticipated claims and contingencies, including potential deductibles and retentions associated with potential insurance claims.

Categories: Liquidation · Update
Tagged: dissolution, estimates, Liquidation, SOAP, Soapstone Networks