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Seth Barkett

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  • Investors Title Offers The Ultimate Margin Of Safety [View article]
    1) Yes, the refinancing boom is largely over. However, more houses are being purchased (title insurance premiums are higher for purchases compared to refinancing), and I expect transaction volumes to increase further back to historical norms (pricing should also continue to rise as inventories remain tight albeit more slowly than the past couple of years).

    2) The Company remains significantly overcapitalized.

    3) Yes, there is interest rate risk. However, the majority of the Company's bond portfolio is parked in investment grade municipal bonds (which in my opinion is the most attractive segment of fixed income currently). Also, the Company has historically done a good job managing interest rate risk. Furthermore, if rates rise, interest-related earnings power from the fixed income portfolio will also increase.
    Jan 26 10:23 PM | Likes Like |Link to Comment
  • Investors Title Offers The Ultimate Margin Of Safety [View article]
    I still own it in size and believe ITIC is now worth between $150 and $160 per share. Housing industry fundamentals are improving and the leadership team at ITIC is stellar.
    Jan 4 02:12 PM | Likes Like |Link to Comment
  • Crawford & Company: Come For The Business, Stay For The Arbitrage [View article]
    There is an error in your article. The "A" shares do not have voting rights. The "B" shares are entitled to one vote per share. The Crawford family controls the "B" shares. They own "A" shares as well.
    Oct 14 02:32 PM | Likes Like |Link to Comment
  • Buhler Industries: A Farm King In The Making [View article]
    Based on a conversation with management, the Company wishes to remain public. If the two large shareholders had wanted to take it private, they would have done so already. As management continues to build value, I expect demand for the Company's shares to increase. If the Company's two large shareholders change their mind sometime in the distant future and decide to take the Company private, I expect a premium to be paid for the 5% public block (not worth the trouble to make an unfair offer for such a small block). If they do not tender for shares and instead purchase shares in the open market, they'll just drive the price up.
    Sep 13 09:29 AM | Likes Like |Link to Comment
  • Conrad Industries: A Value Investor's Pick [View article]
    CNRD is worth over $50 per share now. Conrad's business is booming (as indicated by most recent backlog). The Gulf of Mexico oil & gas business is steadily improving. The BP settlement will also serve as a catalyst.
    Sep 5 12:31 PM | Likes Like |Link to Comment
  • Crawford & Company: A Risk-Free Profit Opportunity [View article]
    The spread could widen... it has maxed out at about $2.68 over the past few years. I guess the wider the spread the greater the profit opportunity though. There are plenty of "B" shares available to short, and the cost is virtually nothing. I don't see a scenario where your shares get called unless the short float increases dramatically. It's a pair trade. On the surface, the "A" shares look cheap, but I'm not comfortable enough with the value proposition to make that recommendation.
    Mar 19 11:17 AM | Likes Like |Link to Comment
  • Crawford & Company: A Risk-Free Profit Opportunity [View article]
    It's not a question of "A" share market capitalization versus "B" share market capitalization. The economic interest of the "A" share is the same as the "B" share (excluding the dividend). The only difference between the share classes is voting rights. The Crawford family, however, controls the Company, so voting rights should not even matter. Therefore, the price differential between the "A" share and "B" share should in theory be zero... or maybe even in favor of the "A" share since it gets a more significant dividend.
    Mar 18 11:26 AM | Likes Like |Link to Comment
  • Crawford & Company: A Risk-Free Profit Opportunity [View article]
    There are plenty of "B" shares out there to short. I'm not sure where you are looking, but everybody I know has had no problems locating shares.
    Feb 22 06:16 PM | Likes Like |Link to Comment
  • McGraw-Hill Ryerson Has Home Run Potential [View article]
    Technically, MHP owns 70% of MHR. The MHR ownership stake will transfer to MHE when Apollo closes the MHE acquisition. Therefore, your logic is incorrect. MHR does not own MHE.

    I'm confused by the lack of upward movement (after the dividend announcement) as well. My only guess is that some long-term shareholders wanted liquidity and this announcement provided it.
    Dec 4 08:55 AM | Likes Like |Link to Comment
  • McGraw-Hill Ryerson Has Home Run Potential [View article]
    It was and continues to be my opinion that regardless of a spinoff or sale that McGraw-Hill Ryerson would be acquired by McGraw Hill Education. Honestly, I think Apollo will have more of an impetus to see this transaction get done. There are significant cost savings and synergies at stake. In terms of valuation, I still think an 8x EV/EBITDA multiple is fair.
    Dec 3 08:56 AM | Likes Like |Link to Comment
  • Presidential Life: Another Example Of Market Inefficiency [View article]
    Historically, the takeover multiple is cheap, but I think management sees the writing on the wall. It's going to be a tough interest rate environment for the foreseeable future (much tougher than I expected earlier in the year). I think it's the best exit shareholders can hope for in the near-term.
    Jul 26 02:11 PM | Likes Like |Link to Comment
  • Gaming Partners Is Catalyzed To Rise [View article]
    Frankly, I was pretty disappointed with the company's stock buyback. I don't know with certainty yet, but I doubt much stock was purchased.
    Jul 11 08:38 AM | Likes Like |Link to Comment
  • Natural Gas Services Group: A Misunderstood Energy Play [View article]
    Rental income has not been choppy. It has been steadily growing. The equipment sales business has fallen off due to lower natural gas prices. As I mentioned in the article, book value is substantially understated. Therefore, you have that much more margin of safety in the balance sheet. ROE is not a good measurement tool in this case. Net income includes significant depreciation. The company has almost no maintenance CAPEX, and all maintenance CAPEX for the rental business is already included in COGS. URI is significantly leveraged... much more risky. NGS would be a great LBO candidate. I could also see a strategic buyer like Gardner Denver acquire NGS.
    May 9 11:39 AM | Likes Like |Link to Comment
  • McGraw-Hill Ryerson Has Home Run Potential [View article]
    Good questions...

    1) I don't know the answer. Although, it is safe to say that digital sales are increasing as a percentage of total sales.

    2) As I stated in the article, I believe it makes sense on a number of levels for MHP to acquire the rest of MHR. As far as I know, MHP has not abused its relationship with MHR.
    May 2 02:17 PM | Likes Like |Link to Comment
  • Presidential Life: Another Example Of Market Inefficiency [View article]
    I'm not convinced the Fed will keep rates this low for another two years. If the economy continues to recover, inflationary pressures will become more apparent and interest rates will likely rise.

    The annuity business has been hurt by low rates. In this environment, people are less likely to lock themselves into low interest rate products. The Company, however, is still making a positive spread on its book of business. A broader footprint will allow Presidential Life to become more competitive in the annuity space. If it can organically grow its book of business now, it will be poised to benefit from spread expansion if/when rates rise.

    Regardless of interest rates, the company is generating positive cash flow, and the margin of safety in its balance sheet is impressive.
    Mar 19 09:00 AM | Likes Like |Link to Comment
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