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National Penn Bancshares: A Strong Bank With A Healthy Path To Growth And An Attractive Dividend
- Acting as a consolidator in a highly fragmented market of Mid-Atlantic regional banks, National Penn Bancshares has a clearly defined and logical path to growth.
- The bank is currently in the early stages of building out its multi-state geographic footprint through acquisitions, extending outward from its core geography of Pennsylvania into neighboring states.
- With a dividend yield exceeding 4%, a diversified revenue base and above average growth prospects, National Penn Bancshares represents a compelling long term opportunity.
- Legendary private equity firm Warburg Pincus, having provided financing after the financial crisis, retains a significant stake in the bank.
- Despite recently selling shares back to National Penn, Warburg Pincus still retains over 8% of the company's shares and a board seat, aligning the firms interests with minority shareholders.
Kirby Corporation: Take Note Of This High-Quality Business Being Offered At A Fair Price
- Having been sold off intensively due to oil market volatility, shares of Kirby Corporation are now offered to investors at an attractive and fair price.
- Kirby Corporation is the largest operator in the water transportation of petrochemicals, a method of transportation that is cost competitive with pipeline and vastly superior to other alternatives.
- Though "oil by rail" has received significant attention by media, transporting oil via tanker barge is both safer and more economic than rail or truck by several orders of magnitude.
- Kirby operates in a fragmented industry and has acted as a consolidator, with an enviable track record of past returns and a clear path to growth through bolt-on acquisitions.
- In addition to growth by disciplined acquisitions, management has reduced debt, repurchased substantial amounts of stock at current prices and maintains the only investment grade balance sheet in its industry.
First Republic Bank: This High Quality Business Flies Under The Radar But Punches Above Its Weight
- With a limited geographic footprint and very little advertising, First Republic might just be the best bank you have never heard of.
- Focused on coastal markets and catering to the needs of High Net Worth Individuals, First Republic is a unique and high quality bank.
- First Republic enjoys an excellent reputation, a strong franchise, a high quality asset base and a solid growth runway.
- Acquired by Merrill Lynch in 2007 and spun-out by Bank of America in 2010, the company was "lost in the shuffle" during the aftermath of the crisis.
- Though shares command a premium valuation, the long term prospects of the business are excellent due to the strength of the banks franchise.
Computer Task Group: With No Debt And A Growing Dividend, This Name Is Getting Too Cheap To Ignore
- With shares trading near five-year lows, Computer Task Group offers investors a compelling mix of value, yield and potential catalysts.
- Operating in the IT sector, CTG is well-situated to benefit from the growth of IT solutions spending in the coming years, particularly in the Healthcare IT sector.
- In addition to a healthy and growing dividend, CTG has no debt, a large cash position, robust free cash flow and trades close to book value.
- The company's strong balance sheet and lack of debt coupled with the tragic passing of the company's chairman also raises the possibility of the company being acquired or going private.
- As a standalone entity, investors will benefit through share repurchases, dividends and growth in profitability as the business wins new business, including a recently announced contract with Boeing.
Facing A Take-Private, Books-A-Million Deserves Your Attention
- Facing significant headwinds in its core business of book retail, Books-A-Million has received a take-private proposal by the Anderson family who hold a majority of the company's shares.
- Though the Anderson family bid two years ago and met with significant shareholder resistance, this bid is attractive in the face of industry economics permanently altered by the internet.
- Investors at current price levels stand to receive a 9% return should the company be purchased at the offered price of $2.75 per share.
- The transaction is contingent on a "majority of the minority" vote from shareholders in order to close.
- There is a strong possibility of a sweetened bid from the family in order to ensure minority shareholders vote yes, turning an already attractive situation into potentially "home run" arbitrage.
Urban Edge Properties: Freshly Spun Out And Ready To Shine
- Recently spun-out from REIT giant Vornado Realty Trust, Urban Edge Properties offers investors a compelling value proposition.
- Freely traded for less than two weeks, the market has yet to fully appreciate the potential of Urban Edge's portfolio of high quality retail properties.
- Primarily concentrated in the Boston-NYC-DC corridor with minority holdings in California and Puerto Rico, the properties held by Urban Edge enjoy highly attractive demographic and operating fundamentals.
- In addition to strong geographic fundamentals, Urban Edge enjoys an attractive debt maturity profile, one of the lowest costs of debt in the sector and a significant development pipeline.
- In addition to appreciation from Index purchases, the company stands to benefit from significant redevelopment & repositioning pipeline of its underutilized legacy properties as well as potential acquisitions.
Matson: This Wonderful Business Is About To Get Even Better In 2015
- Occupying a profitable niche in Jones Act and American Flag Shipping, Matson has been in business for over 100 years and shares are conducive to long term holding.
- Providing an essential service and operating in a business with extremely high barriers to entry, Matson's competitive position is secure for the long term.
- The company's expansion into Alaska in 2015 will significantly increase the profitability of an already attractive business in the coming years and will generate significant free cash flow.
- Further expansion after the Alaska transaction is limited, but this is not a bad thing.
- Excess cash flow will likely be returned to shareholders in the form of repurchases and dividend increases, significantly increasing the profitability of the business on a per share basis.
Cheaply Priced After Intensive Selling, Chart Industries Deserves A Spot On Your Watchlist
- Shares of Chart Industries have been sold down close to book as recent irrational selling of "all things energy" has impacted companies peripherally related to Oil & Gas.
- A producer of equipment used to liquefy and store industrial gases including LNG, Chart Industries remains well situated to benefit from a long term global build out of LNG infrastructure.
- A sizable order backlog and diversified revenue sources help furnish investors with a margin of safety.
- Fixed income investors stand to significantly benefit from purchasing the company's short term convertibles which are currently priced below par, enjoying superior yields and optionality on equity appreciation.
The Pending Takeout Of Horizon Lines' Equity Offers Potential For 'Home Run' Arbitrage
- After years of struggling, Horizon Lines has recently agreed to wind itself down and sell off its assets.
- Matson will be assuming the outstanding debt of Horizon Lines and purchasing all outstanding shares of the company's withered equity position.
- Trading over the counter, the equity of Horizon Lines will be taken out at a 12%+ premium to current market prices with the transaction expected to be concluded in 2015.
- With financing secured by all parties involved, an agreement inked and a voting majority already secured from Horizon Lines' shareholders, this deal is very close to a "sure thing."
- Should the deal take less than one year to close, investors are looking at "home run returns" from an annualized perspective.
Landmark Bancorp: This Regional Offers Value, Yield And Momentum After A Successful Acquisition
- Fairly priced in an expensive market, Kansas based Landmark Bancorp offers investors a blend of value, yield and moderate growth.
- Landmark is currently experiencing record earnings after a successfully completed acquisition in 2013, providing an above average growth profile for the company in the future.
- Investors seeking income benefit from a combined stock and cash dividend yield amounting to over 8% at current prices.
- As Landmark continues to build its statewide franchise, the company becomes increasingly attractive both as a stand alone entity and to acquirers.
- BOK Financial, a large multi-state bank, holds slightly less than 1% of Landmarks shares and has recently made acquisitions in the Kansas market, raising the possibility of M&A activity.
New Ulm Telecom: This Obscure Regional Telecom Offers Cheapness, Yield And An Embedded Catalyst
- New Ulm Telecom, an obscure regional telecommunications company, furnishes investors with a favorable risk/reward profile and attractive dividend yield.
- Investors enjoy downside protection through the cheapness of shares, which are priced significantly below book and the essential nature of the company's business.
- A wave of consolidation is sweeping through small-cap telecom in recent years, raising the possibility of New Ulm being taken out in the near-to-medium term.
- A similar situation currently unfolding with another regional telecom, the LICT Corporation, indicates significant upside potential should a bid emerge from an acquiring party.
- Should New Ulm Telecom be acquired at book value, investors at current prices will enjoy over 50% upside in addition to dividends.
Alteva: After Rejecting A Buyout Offer, This Cash Rich Microcap Is Worth A Look
- Alteva, a microcap telecommunications company, was recently approached by a private equity group to be acquired at $8 per share, an offer it rejected as being too low.
- Alteva is currently offered below book value with a huge cash position and almost no debt, furnishing investors with a significant margin of safety.
- Investors have an embedded call option in the form of a higher bid from the Juniper Investment Company another TelCo operating in the Unified Communications as a Service (UCaaS) sector.
- Even if the company is not acquired, Alteva's management has authorized a share repurchase program and is well positioned to deploy capital or return it to shareholders.
- The operating fundamentals of the company's unified communications business are also steadily improving and will provide a substantial catalyst to the company's share price once it returns to profitability.
E.W Scripps: An Upcoming Merger Makes This Company Attractive To Special Situations Investors
- The E.W Scripps Company recently announced an agreement to merge with Journal Communications via a stock swap.
- In a relatively unusual transaction, the two companies will combine their broadcasting assets and distribute their publishing assets to shareholders in the form of a newly spun out company.
- After E.W Scripps sheds its publishing assets, the company will enjoy an improved growth profile as it is able to focus on higher margin broadcasting operations with less regulatory encumbrance.
- Shareholders of both companies will receive a debt free publishing company, the Journal Media Group, focusing on local newspapers. Additionally, E.W Scripps shareholders will also receive a special cash dividend.
Lake Shore Bancorp: Monitor This Attractively Priced Regional For Value & Second-Step Conversion Potential
- With zero analyst coverage, Lake Shore Bancorp is likely to engage in the "Second-Step" of a thrift conversion in the near to medium term due to prevailing industry dynamics.
- Having completed the "First-Step" of the demutualization process, the company will likely offer the remainder of its mutually held shares in a "Second-Step" offering to complete the thrift conversion.
- Often ignored by the mainstream investing community, thrift conversions offer upside and limited downside risk due to the simplicity and conservative balance sheets of regional banks.
- Patient investors at current prices are positioned to benefit significantly from many potential catalysts over the long term as Lake Shore Bancorp accesses capital from demutalizing.
- Even if a Second-Step offering does not manifest in the near to medium term, upside is likely due to the bank's improving operating fundamentals.
Meredith Corporation: Niche Brands, Strong Local Media Presence And Shareholder Orientation Make This Company Worth Watching
- The Meredith Corporation offers investors a combination of brand value, dividend yield and growth potential.
- The company has proven itself adaptable to the changing media landscape by focusing on local broadcast media and investing in digital assets in addition to its strong portfolio of publications.
- As other media companies shed broadcasting assets, Meredith is situated to benefit from the fallout as the company can acquire broadcasting assets with less regulatory oversight from the FCC.
- Management has taken steps to maintain the value proposition of the company's magazine titles through the "Meredith Sales Guarantee," a program designed to provide a guaranteed RoI to advertisers.
- Growth in local broadcasting assets and digital consumption of the company's publication portfolio, combined with measures taken to preserve the value of the company's print business makes this company attractive.
TransAct Technologies: After A Sell-Off, Investors Have A Great Opportunity To Own This Debt-Free 4% Yielder
- After a heavy sell-off earlier this month an underfollowed microcap, TransAct Technologies, is now on sale.
- Recent selling can be attributed to the market's misunderstanding of the company's product cycle and investments in new sectors of business.
- TransAct is debt-free and offers investors a dividend yield over 4% which has been increased twice since being initiated a year and a half ago.
- Management has also recently engaged in massive share repurchases, with a new $7.5 million share repurchase program announced producing an extremely favorable Total Shareholder Return profile.
- Investors at current prices stand to benefit over the next year from the company's investment in new product deployment and will enjoy higher per share earnings due to share repurchases.
Northrim BanCorp: Making All The Right Moves That The Market Won't Be Able To Ignore For Much Longer
- Northrim enjoys a high quality asset base, advantageous market position, strong returns on assets (RoA) and is offered to investors at an attractive valuation.
- Over the past year, the company's management has taken significant steps towards franchise building through two acquisitions, expanding the company's geographic footprint and revenue base.
- Northrim's acquisition of the remaining equity of Residential Mortgage is both low-risk and will significantly increase the earnings power of the company in the years to come.
- While Northrim remains attractive as a standalone business, its large market share in Alaska relative to its size makes it an attractive candidate for acquisition at a premium.
- Investors currently have the opportunity to purchase a quality, growing business largely ignored by the investing public at a fair price.
Gaming Partners International: A Company With A Strong Balance Sheet Putting Cash To Work In A Hot Sector
- A global company, Gaming Partners is situated to benefit macro trends including the growing popularity of gambling in Asia as well as more casinos opening in the United States.
- Gaming Partners owns attractive brand assets and has a strong presence in numerous niche gaming markets including casino currency, dice and playing cards.
- With zero debt and a large cash position, Gaming Partners International is reasonably priced in an expensive market, raising the possibilities of a near to medium term catalyst.
- The gaming sector has experienced significant M&A interest recently, with a fund known for small and micro-cap buyouts owning a significant stake in Gaming Partners.
- The company has begun deploying excess capital through acquisitions and is situated to benefit from further consolidating niche markets and organic growth.
Exploring Asset Separation After Activist Pressure, LSB Industries Deserves A Spot On Your Watch List
- The management of LSB Industries is exploring a separation of the company's Chemicals and Climate Control divisions.
- If separated, the "conglomerate discount" will be gradually resolved by market forces as the market is able to independently value the business units on a separate basis.
- The company's Chemicals division is subject to commodity price fluctuations, and requires substantial capital expenditure, potentially stifling the true value of the Climate Control unit.
- Due to the phenomenon of forced selling in the aftermath of a spin-off, investors will also likely have the opportunity to make bargain purchases on near-term volatility.
- Management is exploring placing Chemical assets into an MLP structure, promising investors significant income potential, should a spin-off occur.
First West Virginia: 4.4% Yield, Priced Below Book, Takeout Potential -This Regional Deserves Attention
- With zero analyst coverage, First West Virginia is a rare bargain that offers yield, cheapness, safety and an embedded catalyst.
- With a "Fortress-Like" Tier 1 Capital Ratio of over 20%, the bank is conservatively managed and offers a high margin of safety to risk averse investors.
- The company's cheap valuation and high capital ratio make it a take-out target for a larger regional bank which can better deploy First West Virginia's "pent-up" capital.
- Observation of recent comparable deals indicate a 30% to 40% premium to book should the bank merge with a peer or be acquired by a larger regional nearby.
- Investors are paid to wait as the bank enjoys both high insider ownership and amply rewards shareholders through both growing cash and periodic stock dividends.
CSS Industries: Cash-Heavy, Debt-Free And Below Book, This Company Deserves Attention In An Expensive Market
- The recent decline in the share price of CSS Industries provides risk averse investors a substantial opportunity in an expensive market.
- The company carries no debt and nearly half of its market capitalization is in cash.
- The company is in the process of repositioning its assets, having divested unprofitable segments and making complimentary acquisitions.
- Because of this cheap valuation, investors are positioned to benefit in the near term through multiple potential catalysts including a special dividend or take-private.
- In the long term, investors can expect earnings growth as the company puts cash to work and repositions assets.
State Auto Financial Corporation: Attractively Priced, Moving Towards Profitable Underwriting And A Little Something Extra For Investors
- Close to book value, shares of this insurer offer value in an expensive market.
- After shuttering unprofitable areas of business, management is returning the company to profitable underwriting.
- As the company returns to profitable underwriting, investors can expect growth of book value and dividend increases in the medium term.
- With a majority of the company's shares controlled through a mutual structure, there is significant potential for a special situation known as a "mutualization" to occur.
- Should the company mutualize, minority shareholders will be taken out at a premium, as the company effectively takes itself private.
Ampco-Pittsburgh: Sporting A Low Valuation With Numerous Potential Catalysts, A Special Situation Is Taking Shape
- Noted value investor Mario Gabelli has accumulated a significant stake in Ampco-Pittsburgh, a small industrial company lacking analyst coverage.
- The large cash holdings and minimal debt of the company paves the way for several catalysts, including massive share repurchases or a Go-Private transaction.
- Ampco-Pittsburgh is also a candidate for a spin-off to unlock value due to diverse operating segments.
Banco Popular: Trading Under Par, The Preferred Stock Of This Regional Bank Is Attractive
- Banco Popular, a regional bank serving Puerto Rico and portions of the mainland United States, is in the process of repositioning itself.
- An outstanding issue of the company's Trust Preferred Securities offers nearly an 8% yield with cumulative protection and currently trades below par value.
- Other regional banks have proactively redeemed similar types of high interest securities in order to take advantage of historically low interest rates.
- Should Popular call back its Trust Preferred Securities at par, investors will receive nearly a 19% capital gain in addition to an almost 8% annual yield at current prices.
- As Popular sheds assets, redeploys capital and repays TARP money, its preferred stock will also appreciate closer to par value to reflect this improving financial position.
Beasley Broadcast Group: After A Pullback, This Underfollowed Name In Terrestrial Radio Merits Attention
- The recent decline in the share price of the Beasley Broadcast Group provides investors with an opportunity in an unloved sector often ignored by investors.
- Terrestrial Radio remains an attractive industry due to robust free cash flow and a strongly entrenched local presence.
- Due to high free cash flow, dividend increases and share repurchases are likely outcomes in the near to medium term.
- The founding family and Mario Gabelli, a renowned Value Investor, hold over 65% of the company, raising the possibility of a liquidity event such as a go-private.
Pathfinder Bancorp: This Unfolding Special Situation Offers Investors Substantial Upside With Limited Risk
- An under-followed regional bank with zero analyst coverage, Pathfinder Bancorp announced it intends to initiate the "second step" of a process known as a Thrift Conversion.
- Often ignored by large institutions and mainstream investors, Thrift Conversions promise investors significant upside and little downside risk due to the simplicity and conservative nature of regional savings institutions.
- A long time favorite of investors including Peter Lynch and Seth Klarman, Thrift Conversions are enjoying a resurgence as post-crisis regulation alters the dynamics of the banking industry.
National Security Group: After Years Of Difficulty, This Insurer Is Turning The Corner
- National Security Group is finally turning the corner after years of headwinds including natural disasters and litigation.
- The company is now positioned to benefit from more disciplined underwriting and deferred tax assets generated from the settlement of a lawsuit.
- Shares of the company are trading at a significant discount to book value, offering investors a chance at a bargain purchase.
- The company is not covered by any analysts on Wall Street despite being attractively valued.
C.H. Robinson Worldwide: Trading At Multi-Year Lows, This High Quality Company Is Now On Sale And Merits Attention
- C.H. Robinson Worldwide is known as a "Best of Breed" logistics company.
- Shares of C.H. Robinson Worldwide are currently trading near four-year lows.
- The company is positioned to benefit from tailwinds including regulatory changes in the transportation industry.
- Home Loan Servicing Solutions: This Complicated Business Is Worth Understanding
- R.G Barry: The Current Spread Between A Buyout Offer Provides Potential For A 'Home Run'
- Genesee & Wyoming: Benefiting From Regulation, Acquisitions, And Oil By Rail
- The Daily Journal Corporation: Recent Hype Around The Company's Marketable Securities Obscures Quiet Expansion Into Legal Software