Polygon Global Investors, LLC reported strong performance for their portfolio in the month of January, according to a letter to investors reviewed by ValueWalk. Solid profits from insurance BPO operator Quindell PLC (LON:QPP) (OTCMKTS:QUPPF), F&C Asset Management plc (LON:FCAM) (OTCMKTS:FCAFY) and the Celesio AG (FRA:CLS1) added up to a 4.31% return for their portfolio during the month of January. The Polygon portfolio is up 9.04% over the last three months.
Quindell up 55% in January
The Polygon Global report points out that strong news flow and growing analyst awareness led to a 55% rise in insurance/BPO concern Quindell PLC (LON:QPP) (OTCMKTS:QUPPF) during the last month. Even with the big move, Polygon believes Quindell still holds value.
“We believe the transfer from AIM to the main board is an important step for the company as it will attract more investor interest and also lead to technical buying pressure due to its automatic inclusion in the FTSE 250 (INDEXFTSE:MCX) index. As much as 25% of the company should over time be owned by index trackers assuming they will hold an equal weighted position. We continue to believe there is significant upside in the name as the shares trade on 6-7x 2014 earnings with approximately 100% earnings growth from 2013 to 2014.”
Polygon Global’s stake in F&C Asset Management
Polygon Global also holds a significant stake in F&C Asset Management plc (LON:FCAM) (OTCMKTS:FCAFY), which was up 35% in January due to an offer from Bank of Montreal (NYSE:BMO).(TSE:BMO) The report makes a case for holding onto the shares as other suitors might step up to the plate to make a bid:
“The shares traded through the offer terms and closed the month at 124.3p as analysts and investors believe others might be interested as well. F&C will not solicit interest from other parties and have recommended the BMO offer, but given the discounted valuation we believe other players might be tempted to get involved. Several newspaper articles have speculated that other North American financial firms might be interested.”
Polygon Global makes a big profit from Celesio
Polygon Global also made a solid profit on Celesio AG (FRA:CLS1) last month. McKesson Corporation (NYSE:MCK) made an offer for Celesio where
Elliott Management was the largest independent shareholder – back in October, but the deal was contingent on 75% shareholder acceptance. Polygon analysts figured that 75% was iffy given the ownership complexities of Celesio, so they stayed on the sidelines. The stock tumbled when McKesson didn’t reach the 75% threshold, and that’s when Polygon jumped in. The stock price has appreciated, and they argue that shareholders are now in the catbird seat no matter which way
the deal eventually works out.
