Tom Au, CFA's  Instablog

Tom Au, CFA
Send Message
In the early 1990s, during the middle of a secular bull market, I began work on "A Modern Approach To Graham and Dodd Investing," that was not particularly suited for the decade of the 1990s, but was ideally suited for the following "Lost Decade" of the 2000s. In the early... More
My company:
Carryl Capital Management
My book:
A Modern Approach to Graham and Dodd Investing
  • Back From Bill Ackman's Target Town Hall Meeting 0 comments
    May 11, 2009 2:21 PM

    I'm back from Bill Ackman's Town Hall meeting for Target. It was well attended, with many concerned shareholders. He featured an impressive slate of dissident candidates besides himself: JIm Donald, a grocery retailer, Richard Vague, a credit card executive, Micheal Ashner, a real estate mgul, and Ron Gilson, a corporate governance expert at Harvard Business School. Each ot these people has experience facing a key aspect of Target's problems.

    If ever a dissident slate deserved to succeed, it's this one. Target was, and still is, a great deparment store chain, but is having trouble branching out into related areas to fend off more aggressive retaileirs like WalMart. Groceries isn't exactly Target's forte, even though it needs to sell some to pull in traffica for more traditional lines such as apparel. Target may be driving sales by using its credit card operation as a loss leader, even though bad debts are mounting.&nbs... estate, in the form of a publicly-traded "REIT" on company land  could be used to free up cash. An ingrained and unimaginative board is coming up with few new ideas, and the company could find only four directors for five seats, so it proposesd to eliminated one rather than give it to the Ackman group.

    The views of the Ackman group are more nuanced than mine: Transfer only the credit card funding and risk (most, rather than all of the credit card operation.) Do only a parital IPO of the land, rather than spin off the whole real estate operation. A scapel, rather than a sledgehammer. I'm not even sure these measures will be successful, but I give them credit for trying. And Mr. Ackman has a lot more to lose if he's unsuccessful than I do.

    I plan to hold onto my position until the May 28th meeting. After that, we'll see. I"ve made a "turnaround" profit from the recent dip. I'll "let it ride" with Ackman, but not with the incumbents.

    Long TGT stock.

Back To Tom Au, CFA's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (0)
Track new comments
Be the first to comment
Full index of posts »
Latest Followers


  • Falling oil prices, and resulting distressed debt also hurt $AXP. That crimps corporate card usage, and individual use also suffers.
    Jan 25, 2016
  • $AXP's revolving credit business is not a safe business. Look to high yield spreads as a sign of this business' health.
    Jan 25, 2016
  • Given the rise of debit cards, where $AXP is absent, people don't need to use $AXP for "charge" cards, only revolving credit.
    Jan 25, 2016
More »

Latest Comments

Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.