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  • National Penn Bancshares: A Strong Bank With A Healthy Path To Growth And An Attractive Dividend
     • Wed, Mar. 4 NPBC 1 Comment

    Summary

    • 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
       • Wed, Feb. 18 KEX 3 Comments

    Summary

    • 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
       • Tue, Feb. 10 FRC 1 Comment

    Summary

    • 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
       • Sat, Feb. 7 CTG 8 Comments

    Summary

    • 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
       • Tue, Feb. 3 BAMM 2 Comments

    Summary

    • 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
       • Wed, Jan. 28 UE 2 Comments

    Summary

    • 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
       • Thu, Jan. 1 MATX Comment!

    Summary

    • 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
       • Dec. 30, 2014 GTLS 7 Comments

    Summary

    • 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
       • Dec. 10, 2014 HRZL 2 Comments

    Summary

    • 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
       • Nov. 18, 2014 LARK 1 Comment

    Summary

    • 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
       • Oct. 21, 2014 NULM 2 Comments

    Summary

    • 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
       • Sep. 30, 2014 ALTV 5 Comments

    Summary

    • 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
       • Sep. 27, 2014 SSP, JRN 1 Comment

    Summary

    • 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
       • Sep. 19, 2014 LSBK 1 Comment

    Summary

    • 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
       • Sep. 16, 2014 MDP 2 Comments

    Summary

    • 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
       • Aug. 30, 2014 TACT 9 Comments

    Summary

    • 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
       • Aug. 20, 2014 NRIM 2 Comments

    Summary

    • 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
       • Jun. 28, 2014 GPIC 5 Comments

    Summary

    • 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
       • Jun. 26, 2014 LXU 1 Comment

    Summary

    • 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
       • Jun. 17, 2014 FWV 3 Comments

    Summary

    • 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
       • Jun. 10, 2014 CSS 1 Comment

    Summary

    • 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
       • May. 28, 2014 STFC Comment!

    Summary

    • 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
       • May. 10, 2014 AP 4 Comments

    Summary

    • 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
       • Apr. 25, 2014 BPOP 9 Comments

    Summary

    • 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
       • Apr. 15, 2014 BBGI 1 Comment

    Summary

    • 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
       • Apr. 13, 2014 PBHC 3 Comments

    Summary

    • 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
       • Mar. 27, 2014 NSEC 1 Comment

    Summary

    • 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
    Editors' Pick • Mar. 18, 2014 CHRW 23 Comments

    Summary

    • 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
       • Mar. 3, 2014 HLSS 12 Comments
  • R.G Barry: The Current Spread Between A Buyout Offer Provides Potential For A 'Home Run'
       • Feb. 11, 2014 DFZ 2 Comments
  • Genesee & Wyoming: Benefiting From Regulation, Acquisitions, And Oil By Rail
       • Feb. 1, 2014 GWR 9 Comments
  • The Daily Journal Corporation: Recent Hype Around The Company's Marketable Securities Obscures Quiet Expansion Into Legal Software
       • Jan. 27, 2014 DJCO 2 Comments