Whopper Investments
Deep value, special situations, event-driven, arbitrage

Cooper's Warrants: Free Play On Leveraged Upside

Quick summary: Cooper's (COSH.PK) stock is trading at a discount to peers on a variety of metrics. However, their warrants (OTC:COSHW) are trading basically flat to the stock, allowing an investor to pick up warrants at a huge discount to where Black Scholes tells us they should be priced and receive incredible upside from the leveraged business opportunity.

Perhaps my favorite book on investing is Joel Greenblatt's "You can be a stock market genius." The book is filled with interesting nooks and crannies that investors can investigate to alpha potential, but one special area he mentions is leveraged "stubs."

The basic thesis behind these stubs are simple: stubs are the sliver of equity that remain after a...

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