Resource America Delivers Good News

| About: Resource America, (REXI)

There was good news from the call for Resource America (NASDAQ:REXI).

This is awesome ... I bought more shares this morning.

Listen to the call. It is only ~20 minutes long. Why? There was not a single analyst on it. Not one. Reminds me of the day when we started buying iGo (OTCPK:IGOI) at $1 a share and nobody was paying attention to the company.

The news from the call:

1 - The company is divesting non-core assets and has a deal in place to do so. This will provide ~$1 a share in proceeds which will be used to buy back stock

2 - The Cohen shareholders will be buying back stock themselves per their 13D filing (do not forget they just got a cool $250 million from the Atlas deal)

3- The Cohen shareholders already own 23% of the stock (fully diluted)

Let’s do some math:

We have 19,049,000 shares outstanding. The Cohen shareholders have 4,846,097 per the above referenced filing. Assuming REXI does in fact receive the expected net proceeds of $1 a share for the divestitures and uses it as they said they would and repurchase shares, that would take ~3.14M shares off the market (assuming a $6.05 share price).

We will call it an even 16M shares outstanding at that point giving the Cohens 30%+ of the company before they begin buying shares themselves. Other holders are Yacktman Asset Management (1,599,466), Tilson’s T2 Partners (1,230,366), and Cooperman’s Omega Advisors (1,195,000). The top four shareholder groups will then hold 8,870,929 shares or ~55% of the company.

This amount of share buying in a small company with a small, stable shareholder base will have an effect on the stock, a good one. Add this to improvements along all business lines and I am excited about the future of this holding.

There is no meaningful short interest.

Resource America Q4 (click to open .pdf)