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Excerpt from Raymond James strategist Jeffrey Saut's latest essay (published Monday, February 14th):

Even though I have been cautious, I still have been able to find special situations to buy. Take Stanley Furniture (STLY/$4.60/ Strong Buy) – our positive rating on Stanley Furniture stems primarily from its strong balance sheet ($25.5 million of cash and zero debt), the shares' inexpensive valuation, and our view that operating performance is likely to improve significantly in 2011 and beyond. Additionally, we believe the shares offer investors a "call option" on the potential receipt of $40 million (or more) of Continued Dumping and Subsidy Offset Act (CDSOA) monies – an amount well in excess of Stanley's current enterprise value. If Stanley receives the CDSOA money it will have in excess of $6 per share in cash, implying you would be getting the operating business for free.

Another potential special situation is Royce Value Trust (RVT/$15.06). A few weeks ago RVT announced it was reinstating the managed dividend distribution policy (MDP) beginning in March. RVT is currently trading at a ~16% discount to its net asset value (NAV). I think the recent news is not being reflected in RVT’s share price. I believe once the distribution becomes active the discount will narrow and the fund will trade closer to NAV. Our Closed End Fund analysts have RVT on their Idea List, as well as in their Total Return Model Portfolio. RVT previously had a 10% MDP, which was suspended when the fund had to start returning principal to comply with its MDP policy. I think a 5% MDP is a much more attainable yield and therefore recommend purchase at these levels.

Source: Saut: 2 Special Situations to Buy, Irrespective of Market Conditions