HCBK, TCM, GIW

HCBK

I purchased HCBK (10% of the equity account) at $9.81/sh. I sense that it qualifies as the beaten-down, out-of-favor value stock so espoused by Buffett.

The idea:

The stock itself hasn’t done anything for years; the price is close to an all time low, whereas the company has done nothing but make money and pay dividends. Certainly the P/E is quite low at 9. We know management is good because they survived the crisis. Above all, commentaries pick on the stock simply because it hasn’t done anything recently and there is some short-term overhang.

GIW

I was only able to get a tiny, tiny position in GIW, a bank, because it’s so illiquid and because I was slightly greedy on my limit order.

The idea:

Shareholder-approved acquisition for $9.50/sh in cash, with ostensible close date 3/31 (<2 weeks). Traded from $9.35-9.40. I got in at $9.37. Helpful fact: On their website, they’re already telling their regular bank customers that they intend to merge and that ATM-type services will be consolidated by April 9th. If that’s not a clear indicator of surety of closing by a certain date, I don’t know what is.
TCM

Reasonable position in a Chinese medicine company being taken private.

The idea:

All cash deal for $4.50/sh with shareholder meeting filed for March 31. I bought at $4.33-4.34. Clearly that’s an enormous premium. I’m worried about the deal going through or being delayed because

  1. huge premium. Who the heck would sell this to me at 4.33?
  2. merger’s been awfully drawn out. The offer came an entire year ago and has just been sitting there.
  3. the acquirer has withdrawn proposals before

Ultimately, I feel okay because

  1. management (the acquirer) has been piling up shares over the past year
  2. there’s only a short timeframe left to cancel the shareholder meeting. They took the time to file the meeting with the SEC after all.
  3. small market cap explains the large premium maybe.
Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s