As anyone who holds Seagate (STX) knows, or at least has had the opportunity to investigate upon seeing the price jumping by 16% overnight, there has been news of a buyout offer from TPG Capital and Kohlberg Kravis Roberts to take Seagate private at a price of $7.5 billion, or about $15.88. So, this naturally […]
I have been greatly interested in junk bonds over my investment career, as they offer some potentially very attractive returns and often without correlation to the broader bond or equity markets. However, I have found that because junk bonds are considered as an asset class best left to the professionals, the literature available on them […]
I have been interested in short ideas lately, and the last two I identified, Red Hat Inc. and Concur Technologies, were demonstrably overpriced and already showing signs of running out of growth. However, there was no catalyst lurking in the wings that had the potential to throw a wrench into the market’s optimism. However, with […]
I have previously expressed an optimistic view on American Greetings (AM), based on its attractive price/free cash flow. Last Wednesday, American Greetings announced earnings that were substantially down from one year ago, and the stock was punished by nearly 10%, although it has recovered somewhat since then. Now, Ben Graham reminds us not to place […]
As I stated last week, I have taken the view of James Montier that a low price/sales ratio is an unreliable indicator of cheap stocks, since it ignores profit margins and capital structure. I have similarly adopted his view that an astronomically high price/sales ratio is a reliable indicator of overpriced stocks, because at a […]
Montier, in his Value Investing, made a spirited defense of value investing by demonstrating, not only that it works in a normal market, but also, based on the history of Japan, that it works effectively in a lost decade scenario. I find this significant because it strikes me that the United States faces a significant […]
Now that the BP well has been finally containmed, it is only natural that market participants have come to expect a great deal of the shrinkage in valuation of Gulf oil producers to reverse itself to some degree. Certainly there will be new regulations, and perhaps more onerous inspection standards, but on the whole it […]
Since my last foray into the taxation arena, where I examined the (most probably nonexistent) link between tax collections and growth, proved so interesting, even though it was a purely statistical analysis and nothing to do with tax policy as such, I thought I would make a modest proposal in some actual tax policy directions. […]
As I seem to be in a mood to find junk bonds lately, I am pleased to present you with the bonds of the Mohegan Tribal Gaming Authority. The Mohegan Tribe operates a massive casino in Connecticut, one of only two casinos in New England, as well as several other ventures. The company has been […]
I have a certain weakness in my heart for junk bonds. Junk bonds, of course, are bonds with a sub-investment grade credit rating, and they can range from just barely on the cusp of investment grade to the point where the purchaser would have to be crazy to consider them. As Ben Graham wrote, an […]