Investment Idea Sharing – Sept. 6, 2014:
See below for my personal stock market Buys or
Sells this week:
Buy Stock: PGN
Last week, the world market indices were all pretty
flat except Russia was up 5%
due to the continued unrest in Ukraine
Over the past 3 weeks I have been following a
buy-out battle among three of the dollar store companies, FDO, DG, DLTR. Here is what I know so far, in June 2014, Carl
Icahn (read bio here: https://en.wikipedia.org/wiki/Carl_Icahn
) bought a 9% stake in Family Dollar at prices ranging from the high $50’s to
low $60’s/share. This cost Mr. Icahn
about $600 million. Icahn then started
pushing the FDO management to sell FDO.
On July 28, FDO agreed to be bought by Dollar Tree Stores DLTR at
$72/share. It was a cash and stock offer
because DLTR did not have enough cash to just do a straight buy out. DLTR will leave the FDO CEO (Howard Levine,
son of the FDO founder) in place to continue running FDO.
This bid held for 3 weeks until Dollar General
DG entered the bidding war at $80/share for FDO. Dollar General is making an all cash bid, and
will replace Mr. Levine with their own manager.
Also, since DG is the largest of these 3 companies, they may have to
sell 1,500 stores to stay clear of any anti-trust issues with the US
Government.
FDO does not like the DG offer of $80/share
and still wants to continue to sell themselves to DLTR for only $72/share. This will make a whole lot of FDO share
holders mad, and probably cause those buy out attorneys to come running to
place class action lawsuits for breach of fiduciary duty at FDO. But Mr. Icahn is now dancing to the bank
because, this week, he sold all his FDO shares while they were at $80/share. This means he made a 30% profit on his
original investment of $600 million, in a few months, and can walk away from
this big hornet’s nest he stirred up.
Here is a list of Icahn’s holdings as of June
30, 2014: http://www.stockpickr.com/pro/portfolio/carl-icahn/
I checked them to see if he holds any other
companies that have not gone up since he bought them, but may be poised for
greatness. None of them look good to me,
but then I am no Carl Icahn! Check them out yourself.
Here is the current story on FDO not accepting
the Higher Offer: https://finance.yahoo.com/news/family-dollar-rejects-dollar-generals-132931653.html
Wikipedia bio on FDO (Family Dollar):
Wikipedia bio on DLTR (Dollar Tree):
Wikipedia bio on DG (Dollar General):
Yahoo 2 year chart for FDO (Family Dollar): https://finance.yahoo.com/echarts?s=FDO+Interactive#symbol=fdo;range=2y;compare=;indicator=rsi+volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=;
Yahoo 2 year chart for DLTR (Dollar Tree): https://finance.yahoo.com/echarts?s=DLTR+Interactive#symbol=dltr;range=2y;compare=;indicator=rsi+volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=;
Yahoo 2 year chart for DG (Dollar General): https://finance.yahoo.com/echarts?s=DG+Interactive#symbol=dg;range=2y;compare=;indicator=rsi+volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=;
Yahoo 2 year chart for IEP (Icahn Enterprise
Partners)
Stock Evaluator spreadsheet comparing the
fundamental values of FDO, DLTR and DG:
(Note: 99 Cents Only Stores are privately
held)
On this sort, DLTR sorts to the top because
they have the least red cells. See that
DG already has Goodwill to Equity of 103% v.s. DLTR Goodwill to Equity of only
14%. This shows that Dollar General has
gotten big by simply buying their competitors instead of actually growing their
store count and revenues by good marketing.
I continue to look for stocks that have good
fundamental financial values, but stock prices near 52 week lows.
Summary Table of Worldwide Market Index
Closing values for this week:
Next Monthly Meeting 2nd Tuesday of Each Month:
No meeting for September.
Here are my Stock BUYs for This Week:
Stock Symbol: PGN
Buy Date: 9/5/2014
Buy Price: $8.50
Target Sell Price: $10.00
PGN (Paragon Offshore Ltd.) was spun off in
early August 2014 from NE (Noble Corp).
I had been following NE this summer because
they were at $28 which was flirting with 5 year lows, and they pay a nice 5%
dividend and have good fundamental values.
Holders of NE received 1 share of PGN for every 3 shares of NE, and
after the spin off, PGN was selling for $10/share. This seemed high to me given that NE by
itself was selling for $28 to $30 prior to the spin off and after the spin-off
only went down to $27.50. I put in two
buy orders, one for NE at $8.50 and one for NE at $25. NE went up and never came near to my $25
target, but PGN continued on down and hit my $8.50 so I bought it.
Here are my Stock SELLs for This Week:
Stock Symbol:
Sell Date:
Sell Price:
Buy Price:
Buy Date:
Here are my Mutual Fund BUYs for This Week:
Fund Symbol:
Buy Date:
Buy Price:
Target Sell Price:
Here are my Option (CALL or PUT) Sells/Buys for This Week:
Option: Covered CALL
Stock Symbol:
Sell to Open Date:
Expiration Date:
Strike Price:
Option Price:
Option: Cash Secured PUT
Stock Symbol:
Sell to Open Date:
Expiration Date:
Strike Price:
Option Price:
Visit www.ultimatestockfinder.com to
download our Stock Evaluator and Mutual Fund Evaluator spreadsheets, read
training articles and check out all our web links for investing information.
NOTE: Spreadsheets will NOT be updated from
Sept. 1 until Sept. 20 because I am on vacation.
StockEvaluator ‘Short List’
Download ‘Short List’ here: http://www.ultimatestockfinder.com/stockevaluator_short_list.xls
‘Short List’ screens using 12 fundamental
value limits that I want to see in a stock before considering it as a possible
buy.
View our training video that shows how to
enter your preferred values for each of these ‘Short List’ screening limits:
View the Stock Evaluator ‘Short List’
screening criteria and target limit values here: http://www.ultimatestockfinder.com/short_list_12_criteria.JPG
Mutual Fund Evaluator ‘Short List’
Download ‘Short List’ here: http://www.ultimatestockfinder.com/mutualfundevaluator_short_list.xls
View the Mutual Fund Evaluator ‘Short List’
screening criteria and target limit values here:
Please remember to send me any other
investing ideas, information or questions that you want to share with the group.
Thanks,
John D.
Disclosure: The author has no positions in any of the
stocks or mutual funds mentioned in this article unless clearly stated above. We
certify that except as cited herein, this is our work product. We received no
compensation or other inducement from any party to produce this article. Please see our full legal disclaimer at: http://www.ultimatestockfinder.com/stockevaluator_disclaimer.html
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