Hottest links for Saturday – Sunday, February 15th – 16th, the weekend edition. Get our free daily newsletter and never miss a single linkfest. Also, now if you sign up you will get our new e-book on value investing. Top stories are included below.
Lots of great value/behavioral write ups for today. NOTE: We hope to have linkfest for Monday 2/17, but the status is uncertain so stay tuned. First, in some big news which got overshadowed by 13Fs Dan Loeb’s Third Point has taken a big stake BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB), a big boost of confidence for a company facing many challenges, ValuePlays explains the case for buying Sears Hometown and Outlet Stores Inc (NASDAQ:SHOS), There seems to be a growing consensus on the ‘right’ and ‘left’ that Fannie and Freddie shareholders SHOULD receive some profits from the GSEs, that and much more in today’s hottest links.
Hottest Links: Stories
Value Investing
A template for a perennial net-net: Alco Stores
When most investors think of a net-net they’re thinking of Alco Stores Inc (NASDAQ:ALCS), knowingly or unknowingly. A chain of retail stores that could be described as the modern day general stores. I wanted to show how even a very small change with the company’s gross margins or SG&A could result in a much higher valuation. [Nate Tobik, Oddball Stocks]
Micro Cap Value Creation
Micro cap value creation with debt, share count and stock price reductions from 2010. [ShadowStock]
Associated British Foods PLC: A quality company with a share price to match
Associated British Foods plc (ADR) (OTCMKTS:ASBFY) (LON:ABF) is a solid defensive company. It’s exactly the sort of company I’d be happy to buy; just not at the current price. [John Kingham, UK Value Investor]
Big Buy Signal
Now marketing himself as a “rogue economist,” Harry Dent is forecasting “gold down to $750 an ounce, housing down 35%, oil down to $10 a barrel, the Dow down to 6,000, [and] a war between inflation and deflation” this year. [Robert Seawright, Pregmatic Capitalism]
Badges, We Don’t Need No Stinkin’ Badges
I have nothing against “chunks” but I do have a hard time circling back to previous posts before moving onto something else that has caught my attention. I think that’s what makes this work so interesting. [Christopher Pavese, The View from the Blue Ridge]
Funds
The biggest loser?
The start of 2014 has seen a flood of commentary regarding the Chinese non-bank (trust) financial sector – with the last minute bailout of the oddly named “Credit Equals Gold” trust fund (sold through ICBC branches) in late January and a number of predicted defaults of trust funds linked to the coal sector (or actual default in the case of Jilin Trust) in February. [China Meltdown]
Pzena Quarterly Newsletter: Record Profit Margins?
Pzena Investment Management, Inc. (NYSE:PZN) points out that although profit margins are at all time highs, ROEs are only average. In mature economies, capital replaces labor, so even as profit margins rise, ROE remains stable as more capital is required. [KK, The Brooklyn Investor]
Nam Tai: A net-net with multi-bagger upside
Nam Tai Electronics, Inc. (NYSE:NTE) is a contract electronics manufacturer with factories located in China. It has a market cap of $270m and no debt. It’s been in business for 40 years and listed on NYSE since 2003. [John, Portfolio14]
CNBC Talking Head Survival Guide
Presented with no comment…[Tyler Durden, Zero Hedge]
S&P 500 Relative Value by Sector
Savita Subramanian’s latest S&P 500 Relative Value Cheat Sheet came out this week and the Equity and Quant Strategist at BofA Merrill Lynch notes the following.. [Joshua M Brown, The Reformed Broker]
The Untouchable Profits of Fannie Mae and Freddie Mac
Would you buy stock in a company that barred you from sharing in its future earnings? Of course not. Participating in the upside is what stock ownership is all about. And yet, as of December 2010, holders of Fannie Mae / Federal National Mortgage Association (OTCBB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC) common stock were subject to such a restriction by the United States government. [Gretchen Morgenson, The New York Times]
New York hedge fund acquires 2 per cent of BlackBerry
A filing with the U.S. Securities and Exchange Commission shows the New York firm, founded by value investor Daniel Loeb, controlled 10 million BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) shares at the end of 2013 with a current market value of $92 million (U.S.). [thestar.com]
Sears Hometown Outlets $SHOS
Sears Hometown and Outlet Stores Inc (NASDAQ:SHOS) has a unique franchise model and is set for growth after being spun from Sears Holdings Corp (NASDAQ:SHLD). [Todd Sullivan, Harvest]
Hottest Links: Not The Onion
Child Abuse? 17-Year-Old Drops After Eating Only Chicken Nuggets Since Age 2
Stacey Irvine looks surprisingly well for a 17-year-old who’s eaten only chicken nuggets since she was 2. But when she recently went to the hospital after passing out from struggling to breathe, doctors told her that she absolutely had to eat more healthily. [Sarah Fuss, Takepart]
