Hottest links for Monday October 28th, 2013 the on time edition (see weekend’s edition of hottest links). Get our free daily newsletter (which is being updated currently to make it even better) and never miss a single linkfest.
Top stories for today can be found below. Lots of great value write ups on micro caps, small caps and special situations; Also a bunch of great behavioral finance articles; Also forget BRICs you can just buy BBRC | F-47 ETF now, sounds more like a fighter jet, but its not! Is a company which a famous value investor owns a fraud? The most famous ex fraudster turned good has a new piece out on that topic; Also, a very interesting article on the art market, which ties in nicely with recent activism at Sotheby’s; How do you get rid of Somali pirates? Just call in Britney Spears, that and much more below in today’s hottest links.
Hottest Links: Stories
UNTD – Imminent Spin-off Should Unlock Ftd Hidden Value
I believe FTD represents more than 85% of the value of United Online, Inc. (NASDAQ:UNTD). FTD operates two businesses. Product revenue is mainly derived from the consumer business, while service revenue is mainly derived from the floral network business. [ValueVenture]
The Value Returns To Value Investing
Despite the run-up in equity prices, value investors can find stocks that should outperform, even in a rising interest rate environment. [Kevin Simms, Institutional Investors]
Interview With Tom Brakke
Tom Brakke is a regular font of provocative thoughts, and that can be one of the most useful things in the world. He has also written a number of excellent posts for Inside Investing, including a thoughtful look at how you should consider cash and a post about the most important question to ask about a projected rate of return. [William Ortel, CFA Institute]
Tired Asian Businessmen
Not over Paul Zahra’s shocking announcement on Oct 22, 2013 over his sudden resignation as CEO of upmarket departmental store David Jones Limited (ASX:DJS) (OTCMKTS:DJNSY) (A$1.48 billion) and the even more shockingly frank explanation: Because he is “simply tired” and “burnt out”. [Koon Boon Kee, BeyondProxy]
A Dozen Things from Philip Fisher and Walter Schloss
“I had made what I believe was one of the more valuable decisions of my business life. This was to confine all efforts solely to making major gains in the long-run…. There are two fundamental approaches to investment. [Tren Griffin, 25iq]
Hanover, Still Cheap
Hanover Foods Corporation (OTCMKTS:HNFSA) (OTCMKTS:HNFSB)’s business hasn’t changed since I last posted about them, they are still producing frozen vegetables, snack food, and frozen meals. [Nate Tobik, Oddball Stocks]
Inversion and The Power of Avoiding Stupidity
Charlie Munger, the business partner of Warren Buffett and Vice Chairman at Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B), is famous for his quote “All I want to know is where I’m going to die, so I’ll never go there.” [Shane Parrish, Farnam Street]
Using Spurious Correlations To Justify Trades
Stupid Questions: “An African contact sent a chart of bush-gold vs gold prices,” said the CIO. And having long since overcome my fear of asking stupid questions, I asked what the hell bush-gold is. [Joshua M Brown, The Reformed Broker]
Almost Negative EV, 2013 Insider Buying
Two ideas that meet the criteria of share count reduction in 2013, positive insider buying and high cash per share value creating a low enterprise value to market cap value: Ambassadors Group Inc (NASDAQ:EPAX), Franklin Wireless Corporation (OTCMKTS:FKWL). [Shadow Stocks]
Linta – Everything About It Is Amazing
Liberty Interactive (Interactive group) (NASDAQ:LINTA) presents a unique opportunity to participate in the said proposition. I believe LINTA at $23.70 is trading at less than two thirds of its current conservatively estimated NAV, which coupled with medium term business growth and highly accretive. [ValueVenture]
BBRC Goes Beyond BRICs, Into Frontier
The EGShares Beyond BRICs ETF (BBRC | F-47), a developing-markets equities fund that had an alluring premise from the first, today will add to that allure with an index change that expands the ETF’s exposure to frontier markets for the first time. [Hung Tran, IndexUniverse]
What Do Hedge Funds Spend On Regulatory Compliance?
There are fixed costs inherent in all asset management / trading ventures, and they fall in proportion relative to increase in size. Indeed, the chart below showing the response to the survey — notwithstanding the self-selecting bias inherent thereto — shows the greatest response from smaller funds. [Barry Ritholtz, The Big Picture]
Canyon Capital Gains In UK Shipper, Irish Hotel Debt
The credit focused hedge fund, Canyon Value Realization Fund, has gained over $300 million on its $2 billion investment in the European region in the past one year, and this was achieved without the fund selling any of the original assets. [Tabinda Hussain, ValueWalk]
Margin Debt: Move Along, Nothing to See Here
NYSE Margin Debt just reached another record high, and an increasing number of market skeptics are expressing concerns. [Arthur Schopenhauer, Philosophical Economics] Related; Margin debt is the money borrowed against securities in brokerage accounts. Recently, in the United States, margin debt had risen to its highest level ever, at $384 billion, surpassing the previous peak of $381 billion set in July 2007. [Mani, ValueWalk]
Are CAT Bonds The Answer to Today’s Retirement Planning Woes?
An increasing number of bond funds, pension managers, and other institutional investors are loading up their portfolios with an untested and unproven product about whose long-term performance we know very little: the event-linked security or catastrophe bond (CAT bond). [Anthony Catanach, Grumpy Old Accountant]
Here’s How Corporate America Is Looking
The S&P 500 (INDEXSP:.INX) is trading at all-time highs. Sneider outlines the three biggest takeaways from Q3 earnings reporting so far in a note to clients: “(1) 3Q earnings positively surprise, driven by Financials and higher than expected margins; (2) Revenues have been in line with expectations and trailing four-quarter margins remain stable despite positive surprises in 3Q; (3) Negative revisions to 4Q EPS estimates.” [Matthew Boesler, Business Insider]
The Twitter IPO: Thoughts on the IPO End Game
Twitter, Inc. (TWTR)’s third quarter report contained both good news and bad news. The good news was that revenue growth continued to accelerate, with revenues more than doubling relative to revenues in the same quarter in 2012, but it was accompanied by losses, which also surged. [Aswath Damodaran]
Speaking in Banking Tongues
Bank regulators often speak a language all their own, replete with a host of acronyms amd jargon describing the nuances of different capital buffers. [David Reilly, MoneyBeat]
Is Overstock.com Trying to Cook The Books, Again?
In 2013, Overstock.com, Inc. (NASDAQ:OSTK) quietly changed the useful life of certain fixed assets. The company did not inform investors in its 2013 financial reports that the useful life of its computer software and computer hardware costs was higher in 2013 than it was in 2012, leaving the impression that their useful lives were the same in both years. [Sam Antar, White Colar Fraud]