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Toby Shute  

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  • Time To Go Active [View article]
    My understanding is that HYLD was overweight energy going into the correction last year, which is the primary reason you are underperforming a passive high yield index by ~1380 bps over the past 12 months, per Morningstar. So you did separate yourselves when the market got volatile, just not in a good way.

    I agree that your active management approach can add value going forward, now that you're being selective with your energy exposure following the big drop in crude prices. That said, the very recent experience of the fund, which weakens your argument that active beats passive in volatile environments, is a bit of a glaring omission.
    May 21, 2015. 05:45 PM | 3 Likes Like |Link to Comment
  • South Korea: Home Of The World's Best Equity Opportunities [View article]
    Some have already cited the concentration in the large conglomerates. Their governance is poor and capital allocation decisions are often troubling. The most flagrant one recently was Hyundai's $10B land purchase in Seoul for its new HQ. Various classes of Hyundai preferred comprised 23% of Weiss' NAV before that event, so that stung when news of the purchase broke and the shares rightly got whacked.

    http://bit.ly/1KevrMg
    May 5, 2015. 04:33 PM | 5 Likes Like |Link to Comment
  • Bad News Is Good News For Tetra Tech [View article]
    Good questions, mtbattie. I'll tell you up front I have no position in the stock currently and haven't scrutinized the latest results.

    I believe the stock is up on results and outlook rather than the acquisition, which was very small at $30M in revenue. But to your general line of inquiry on contingent consideration revaluations, I have a thought or two.

    On the one hand, whenever you have a company writing down an acquisition - either the carrying value or the future contingent consideration - that's rarely encouraging re: the performance of the acquired biz. On the other hand, you have to distinguish between these two very different cases. The former is a pretty unambiguous capital allocation fail, because the acquirer overpaid and is owning up to that fact by writing down the goodwill. The latter case is different, because contingent consideration is to some degree a stretch target. The fact that TTEK is lowering its contingent consideration payable means that the acquired biz is not tracking to that stretch target. That's not to say TTEK didn't overpay - there could be more writedowns in the future - but the contingent consideration built in a buffer to help avoid that outcome. I'm perfectly happy with an acquirer structuring its acquisitions in this way.

    I 'm not following closely enough to address your other questions.
    May 4, 2015. 01:52 PM | Likes Like |Link to Comment
  • MCG Capital +14.5% on tender offer; more on Q3 results [View news story]
    Perhaps, but who in their right mind would vote against the deal?
    Apr 30, 2015. 04:25 PM | Likes Like |Link to Comment
  • MCG Capital finds a buyer [View news story]
    Nice outcome for anyone buying MCGC mid-last year, whether ahead of the tender announcement or afterward.
    Apr 29, 2015. 11:56 AM | Likes Like |Link to Comment
  • MCG Capital +14.5% on tender offer; more on Q3 results [View news story]
    Sale today at an implied $4.75 is well ahead of the conservative wind-up liquidation value we discussed last year. Nice outcome.
    Apr 29, 2015. 11:55 AM | Likes Like |Link to Comment
  • Merger Arbitrage Forum (Though Any Arb Can Be Discussed) [View instapost]
    Yep, that works. Hadn't noticed the "next arrow."
    Mar 9, 2015. 02:23 PM | 1 Like Like |Link to Comment
  • Atlas Financial: This Commercial Auto Insurer Is Just Getting Revved Up [View article]
    Thanks for the comment and questions. On cost ratios, this information would not be so easy to come by as there is no other public pure play in light commercial auto, as far as I know. Most of the competitors are either small and privately owned or part of a larger P&C insurer. Here is a somewhat dated list of competitors from the Form 10 filed in 2012 (they don't list competitors by name in the 10-K):

    In the specialty insurance market ACIC and ASI compete against, among others, American Transit Insurance Company (New York only), Canal Insurance Company, CNA Financial Corporation, Carolina Casualty Insurance Company, Empire Fire & Marine Insurance Company (subsidiary of Zurich Financial Services Ltd.), Gateway Insurance Company, Global Liberty Insurance Company of New York, Grenada Insurance Company, Hereford Holding Company, Inc., Hartford Financial Services Group, Lancer Financial Group, MAPFRE USA, Maya Assurance Company, Mercury General Corporation, National Indemnity Company (subsidiary of Berkshire Hathaway, Inc.), National Interstate Corporation, Northland Insurance Company (subsidiary of Travelers Companies, Inc.), Safeco Corporation (subsidiary of Liberty Mutual), Scottsdale Insurance Company (National Casualty Company) and ULLICO, Inc.

    They've now acquired two of the handful of privately owned competitors on that list: Gateway and Global Liberty.

    Oddly, they do not list Tower Group, their largest competitor according to a major AFH investor who wrote this up elsewhere. Tower Group's commercial lines have since been picked up by AmTrust Financial. I haven't seen them comment on the taxi business specifically in their quarterly calls, presentations, or filings.

    Your second question is easier to answer, and an important point that I omitted. Per the latest slides, insiders own ~10% of the stock. They invested millions at the time of the Kingsway going-public transaction.
    Mar 4, 2015. 04:34 PM | Likes Like |Link to Comment
  • Atlas Financial: This Commercial Auto Insurer Is Just Getting Revved Up [View article]
    Gentle readers: I inadvertently left out a Key Stats section, and am working with editorial to get it added..
    Feb 27, 2015. 12:59 PM | Likes Like |Link to Comment
  • Merger Arbitrage Forum (Though Any Arb Can Be Discussed) [View instapost]
    That is very thin gruel compared to the spread on QTETR last year. It traded in the .60s and .70s for months after the merger announcement. I would personally wait for a better opportunity.
    Feb 27, 2015. 12:04 PM | Likes Like |Link to Comment
  • Chris DeMuth, Jr. Positions For 2015: Banking M&A, Milestone Payments, Litigation Results [View article]
    What's the most likely event path now that BDX has complied with the injunction, rather than buying RVP or settling? Put another way, how long will it take RVP to get paid?
    Feb 17, 2015. 01:41 PM | 2 Likes Like |Link to Comment
  • Harvest Natural withdraws case against Venezuela [View news story]
    Unbelievable.
    Jan 29, 2015. 03:11 PM | Likes Like |Link to Comment
  • Merger Arbitrage Forum (Though Any Arb Can Be Discussed) [View instapost]
    Spoke to a friend who's done a lot of odd lots and in his experience the odd lot provision is usually there from the preliminary filing. He hasn't seen one added in. Has anyone ever seen that happen?

    Having changed my view on the likelihood of an odd lot provision, I am out as of today's close. May come back for a third bite if the volatility keeps up.
    Jan 23, 2015. 04:10 PM | Likes Like |Link to Comment
  • Merger Arbitrage Forum (Though Any Arb Can Be Discussed) [View instapost]
    Carfinco Enters into Letter of Intent with respect to the Sale of its US Business

    EDMONTON, Jan. 22, 2015 /CNW/ - Carfinco Financial Group Inc. ("Carfinco") (TSX: CFN) announces today that it has entered into a non-binding and non-exclusive letter of intent which sets forth the principal transaction terms with respect to the sale of its subsidiary Persian Acceptance Corp. and certain affiliated entities, the disposition of which is a condition of closing the previously announced plan of arrangement (the "Arrangement") with Banco Santander, S.A. ("Santander") (CATS: SAN, NYSE: SAN, BATS-CHIXE: SANE).

    "Remaining closing conditions include the sale of our US business and obtaining the regulatory approval from the Bank of Spain." said Tracy Graf, CEO of Carfinco. "Both Carfinco and Santander continue to work diligently towards completing the sale of our US Business and obtaining the applicable approval from the Bank of Spain. Carfinco remains confident that the Arrangement could be completed within the timelines outlined within the Arrangement Agreement. "
    Jan 22, 2015. 08:24 PM | 1 Like Like |Link to Comment
  • Merger Arbitrage Forum (Though Any Arb Can Be Discussed) [View instapost]
    Yes, I was really surprised to see it hit $50 on the 14th. I think there's a reasonable chance we see an odd lot provision, which makes me comfortable taking a position below $46.
    Jan 22, 2015. 08:23 PM | Likes Like |Link to Comment
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