John Chen
Value, contrarian, small-cap, special situations

Forest Oil: Special Situation, Micro Cap, Agency Conflict, Liquidation Scenario - The Value Dream

Forest Oil Corporation (NYSE:FST) is an oil company that is asset rich but debt laden in Texas. Previous public non-pro write-ups have done an average job of describing the company but failed to capture the events in last two months. This post will cover a highly crowded special situations trade by hedge funders that has backfired, resulting in a very attractive opportunity. This is the most interesting opportunity I've seen so far and is worthy to be a case study in a Greenblatt or Klarman book.

In a nutshell, FST has become a huge hedge fund battleground between credit arbs/ quant shops and fundamental investors, The arb trade involves shorting the corporate debt and buying stock to BLOCK...

Join Seeking Alpha PRO to read this archived article and 11,574 other archived articles
IDEA GENERATORXExclusive access to 10 PRO ideas every day
INVESTING IDEAS LIBRARYXExclusive access to PRO library of more than 15,000 ideas
SECTOR EXPERT NETWORKXExclusive access to all sector experts for direct consultation
PERFORMANCE TRACKINGXTrack performance of all PRO stock ideas
PROFESSIONAL TOOLSXProfessional Idea Filters to zero-in based on industry, market cap and more
"In just the first month of using PRO, I used it to generate two ideas which were actionable for me. As a result of these two positions, I have earned more than 20 times the annual subscription costs for PRO."Michael Yagemann, Greenbridge Capital
"I am pleasantly surprised with the scope of small and mid-cap coverage PRO offers. You can't find that any where else."Patrick Rice, Mainstay Capital Management
You may cancel at any time for any reason, and receive a prompt refund for membership on months paid and not used (max. 6 months). Details