Thursday, December 31, 2009

Position Update

Things continue to not look so hot for RHI Entertainment (RHIE).  Last week they entered into a forbearance agreement (details here).  I also saw that Seth Klarman sold his stake in the company, which is a big eye opener for me as he was one of the reasons I bought the stock. 

The big question now will be the value of their library.  It is quite sizeable and has been their reason for staying afloat.  Can it keep them afloat long enough for the market for their products to improve?  With the amount that the stock has declined, it is something I'm willing to wait out and see.  They are still in a good position in their industry.  Their biggest problem is the large amount of debt, and if they can manage it well enought to stay afloat.  I have such a small position that it really isn't affecting me much.  It was a one of those "if it works, I'll get a decent but not great return; if it doesn't I'm not out much" trades. 

We'll see...

Disclosure: Long RHIE

Wednesday, December 30, 2009

New Purchase

This has been a fairly boring market as we see low volume near the end of the year.  I'm curious as to how 2010 starts off, as January's trading is usually anything but boring. 

I went ahead and bought some Carefusion (CFN) today after a slight pullback.  It is a name I have been following for a bit.  They were spun off earlier this year from Cardinal Health, and I like the prospects for this company.  You can read the profile of the company here.  The bottom line is now that we have a clearer view on how health care reform will affect these companies, its a little easier to make decisions on their stock. 

I'm a fan of spin-offs, as they often create opportunities for companies to realize value.  Management is often motivated to get off on the right foot during their first few quarters on their own.  I did a piece on spin-offs earlier this year, which you can read here.

The company is in a good industry that is growing.  Their earnings are estimated to grow at a solid rate, and shares trade at 1.24x book value.  David Einhorn's Greenlight Capital, one of my favorite investors, owns 8.7 million shares.

The stock isn't far from its high, but I think there will be some value unlocked in the coming quarters that the stock hasn't had a chance to show yet.  I started with about a 1/3 position.

For most other names, I'm just sitting on my hands waiting to see if volume and/or volitility picks up when the new decade starts.

Disclosure: Long CFN.

Monday, December 28, 2009

End of Year Thoughts

This is my 600th post.  Hard to believe.  Even though I haven't been posting as much as I'd like for the past couple of months, I fully expect to ramp back up and keep this thing going.  I enjoy it a lot and am as committed to this journey as I've ever been. 

This has been one interesting year.  It has tested investors resolve and has rewarded those who can look past the noise, and in many cases those who can just go with the flow.  The way I see it is that even though the rules are changing and stocks are reacting to certain events differently than before, the market still is what it is.  There are still opportunities every single day.  That's why we all continue to come back.

I have a lot of good feelings and ambition heading into 2010.  I see lots of great opportunities out there for those who are willing to seize them.  I plan on being one of those people, and I hope to continue to pass some of that along on this site.

Thanks to all those who have followed consistently.  To those stopping by or seeing the site for the first time, I'd be happy to hear your comments and opinions.

Thanks again!

Wednesday, December 9, 2009

Wednesday Afternoon Thoughts

Winter is here and there's lots to talk about in the market.  The overall markets have been see-sawing a bit over the past week, but there are a few stocks on the move that are on my radar screen.

General Growth Properties has continued to climb.  It now appears Brookfield is the most likely partner for them at this point, and the stock just keeps rocketing as more good news is arriving.  We also have plenty of shorts trying to get out.  Shares were near 8.00 when I wrote about it last week.  They touched 11.00 today.  I'm in a very small position at 1.65.  Like many others, I wish I held more.  I could add to my position. 

RHI Entertainment has seen some buying of its shares lately as it seems they may have finally found a bottom.  Lots of volume moving into the stock and while this could just be a bounce off the bottom, these shares are really cheap.  I had an order in around .65 last Friday but didn't get a fill.  I'd add a small amount if shares get back below .70 again. 

I've been growing more bullish as I've been seeing signs the economy is improving.  I'd love to see at least a 10% pullback which would leave me a little more comfortable with valuations, but there are a lot of good stocks out there right now and things are improving, and it may not be the time to get extremely picky as there is a lot more potential upside. 

Disclosure: Long GGWPQ, RHIE

Thursday, December 3, 2009

General Growth Looking Good

Things continue to be looking up for General Growth Properties (GGWPQ) as they organize their plan to emerge from bankruptcy.  I've held a very small position in this since June, where I was able to pick up some shares around $1.80.  Shares are up near $8.00 today, making this my largest percentage gainer ever.  I only wish I had picked up more shares at the time.  But a nice gain nonetheless.  Here are my previous posts on GGP.

An enormous thank you to Todd Sullivan for this one.  He's been all over this trade from day one, and many people have made money on this one, and it appears there is more to come.  Thanks Todd!

Check out his awesome site here.

Disclosure: Long GGWPQ

UPDATE: WSJ Announces that Brookfield and Simon are buying General Growth Debt and are preparing to make a bid for all or part of assets.  More good news, and the stock continues to climb. 

Tuesday, December 1, 2009

Pfizer On Board With Healthcare Reform

Interesting commentary out today from Pfizer CEO Jeff Kindler.  For the most part, Pfizer is on board with health care reform.  As a shareholder, this is one question I was wondering.  How would reform effect Pfizer?  At this point, it seems like it wouldn't have many negative consequences.  He also said there is no news about the much coveted dividend that was cut when the bought Wyeth. 

Personally, I'm on board with the idea of health care reform, but like most large scale projects like this, I'm hesitant to believe the government will get it right. 

Long PFE, and might be adding.