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Alex B. Gray is the founder and editor of the Scavenger Report newsletter and the website. The Scavenger Report is a research-focused investment newsletter for the independent-minded investor. The website also contains independent research on individual... More
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  • Buying Cash At A 35% Discount 3 comments
    Sep 15, 2010 4:20 PM | about stocks: BXLC

    It is not often you can pick up cash on sale.  Especially 35% off, but that is exactly the opportunity Bexil Corporation (OTCPK:BXLC) is currently offering to potential shareholders.  BXLC currently resembles what is referred to as a Special Purpose Acquisition Company or SPAC.  Typically a SPAC is a company that goes public to raise capital with the intent to acquire an operating company.  This is not exactly how BXLC ended up looking like a SPAC.  To better understand the BXLC situation, a little company history is in order.  

    BXLC was originally Bull & Bear US Government Securities Fund, Inc. and primarily invested in government and corporate bonds.  The company changed its investment policy January 1, 2002 to a less restrictive investment criteria.  Also in January 2002, the Company announced its acquisition of 50% of York Insurance Services Group, Inc.  BXLC paid American International Group, Inc. $3 million cash and provided loan guarantees of $3 million.  In January 2004, BXLC ceased to be an investment company and became a holding company continuing to trade on the American Stock Exchange.  In April 2006, BXLC sold its 50% interest in York Insurance Services Group, Inc. for $39 million in cash.  I can’t argue with the results of that investment.  In a move to trim costs, the Company filed to delist its common stock from the American Stock Exchange and the stock was listed on the Pink Sheets shortly thereafter.  

    Since the Company received the proceeds from the York Insurance Services Group sale in 2006, it has been seeking to acquire and/or develop one or more businesses.  To date, the Company appears to be being very methodical regarding acquisition candidates as it has not materially committed any capital to an acquisition.  The Company’s acquisition parameters are as follows:

    • A proven track record with demonstrated earning power
    • A seasoned business with solid customer relations
    • Good return on equity, with little or no debt
    • Solid management
    • Audited financial statements
    • Particularly interested in a “spin-off” from a larger company.
    While this methodical approach is appreciated, time is becoming an issue as negative cash flows continue to eat into the cash balance as the Company currently does not have a source of revenue.  BXLC recently reported a net loss of $351,136 for the three months ended June 30, 2010 and a net loss of $522,003 for the six months ended June 30, 2010.  Many investors are calling for the Company to simply liquidate its assets.  However, the Company made it very clear during its June 2, 2010 conference call that it has no intention to liquidate in the short-term. 

    As of June 30, 2010, BXLC had net cash of $36,629,550 or $36.21 per share.  With the last trade of the shares and current bid price of $23.50, that represents a 35% discount to net cash.  The current ask price on this thinly traded stock is $25.75 representing a 29.9% discount to net cash.  

    The primary risks are the Company either continues to deplete its cash balances with continued losses or they make a poor decision for the deployment of the cash.  An investment in this Company also carries the additional risk of being a very small capitalization company whose common stock is very thinly traded.  This can make it difficult to buy or sell shares at a desired price.  There is typically a large spread between the bid and the ask price.  It is very important to only use limit orders when attempting to acquire or dispose of shares.  Only very experienced investors with a long-term time horizon should consider an investment in BXLC.

    Disclosure: Disclosure: The author is long Bexil Corporation (OTCPK:BXLC) at the time of this writing.
    Stocks: BXLC
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  • grahamanddodder2
    , contributor
    Comments (28) | Send Message
    Bexil Corporation Announces Transaction Agreement
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    Bexil Corporation Announces Transaction Agreement


    NEW YORK, NY -- (Marketwire) -- 11/09/10 -- Bexil Corporation (PINKSHEETS: BXLC) today announced that it has entered into an agreement (the "Transaction Agreement") with Chartwell Investment Partners ("Chartwell"), the investment adviser to Chartwell Dividend & Income Fund (the "Fund"), to facilitate the transfer of the investment management services and responsibilities for the Fund, together with certain assets and transitional services related thereto, to Bexil Advisers LLC ("Bexil Advisers"), a wholly owned subsidiary of Bexil.


    The Board of Directors (the "Board") of the Fund today announced that it had approved a new investment advisory agreement (the "New Advisory Agreement") between the Fund and Bexil Advisers, subject to stockholder approval and other conditions. The Board also nominated a new slate of directors (the "Director Nominees") to be elected by the stockholders of the Fund. Each of the Director Nominees currently serves on the boards of various registered funds advised by affiliates of Bexil Advisers. Chartwell will continue to manage the Fund until, and will help facilitate the transition of advisory services for the Fund to Bexil Advisers upon, receipt of stockholder approval of both the New Advisory Agreement and election of the Director Nominees, and satisfaction of the other conditions of the Transaction Agreement with Bexil and Bexil Advisers.


    The Board called two special meetings of stockholders of the Fund to be held on December 29, 2010. The first special meeting is called to seek approval of the New Advisory Agreement. The second special meeting is called for the election of the Director Nominees. The Board has fixed the close of business on November 19, 2010 as the record date for each meeting and any adjournments or postponements thereof. The Fund will not bear any of costs or expenses associated with the preparation of the proxy statement or the solicitation of stockholder votes.


    This press release is neither an offer to sell, nor a solicitation of an offer to buy, shares of the Fund, nor is it a solicitation of any proxy.


    Bexil Corporation (PINKSHEETS: BXLC) is a holding company. To learn more, please visit Bexil Corporation is an affiliate of Winmill & Co. Incorporated (PINKSHEETS: WNMLA), which is engaged through subsidiaries in the investment management of registered investment companies.


    Chartwell is an employee-owned firm, founded in 1997, that is dedicated solely to the investment advisory business. The firm is a quality-based equity and fixed income manager with a disciplined, team-oriented investment process. Chartwell maintains a firm-wide commitment to fundamental research. For Fund stockholder related questions, please contact Chartwell at 610.296.1400. You may also visit for more information about Chartwell and its products and services.


    The Fund is a closed-end diversified investment management company whose objective is to seek high current income by investing, under normal circumstances, at least 50% of its total assets in income-generating equity securities, including dividend paying common stocks, convertible securities, preferred stocks and other equity-related securities. In addition, the Fund may invest in non-convertible debt securities, consisting primarily of corporate bonds. For more information about the Fund, please visit




    10 Nov 2010, 05:52 PM Reply Like
  • grahamanddodder2
    , contributor
    Comments (28) | Send Message
    Winmill and Co (WNMLA) owns ~25% of BXLC and trades at massive ~50% discount to book value....


    Feb 17, 2010 16:48 ET
    Winmill & Co. Incorporated Announces Nine Month 2009 Unaudited Financial Results


    NEW YORK, NY--(Marketwire - February 17, 2010) - Winmill & Co. Incorporated (PINKSHEETS: WNMLA) today reported its unaudited financial results for the third quarter ended September 30, 2009.


    Winmill recorded net income of $83,160 or $0.06 per share for the nine months ended September 30, 2009.


    At September 30, 2009, shareholders' equity was $8,701,265 and book value per share at September 30, 2009 (1,497,593 shares issued and outstanding) was $5.81.


    The Company's unaudited consolidated balance sheet and statement of income as of and for the nine months ended September 30, 2009 are appended to the copy of this press release on


    Winmill & Co. Incorporated is engaged through subsidiaries in stock market and gold investing through its investment management of equity and gold mutual funds. The mutual funds managed by a Company subsidiary are Midas Fund, Inc. (MIDSX), Midas Special Fund, Inc. (MISEX), and Midas Perpetual Portfolio, Inc. (MPERX). The closed end funds are Foxby Corp. (FXBY) and Global Income Fund, Inc. (GIFD). To learn more about Winmill & Co., including Rule 15c2-11 information, please visit


    This release may contain certain "forward looking statements" made pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These statements involve known and unknown risks, uncertainties and other factors, many of which are beyond the control of Winmill & Co., which may cause the Company's actual results to be materially different from those expressed or implied by such statements. The forward looking statements made herein are only made as of the date of this release, and the Company undertakes no obligation to publicly update such forward looking statements to reflect subsequent events or circumstances.


    The Company views book value per share, a non-GAAP financial measure, as an important indicator of financial performance. Presented in conjunction with other financial information, the combined presentation can enhance an investor's understanding of the Company's underlying financial condition and results of operations. The definition of book value as presented in this press release is shareholder's equity divided by issued and outstanding shares as of the reporting date.


    Thomas O'Malley
    Chief Financial Officer
    1-212-785-0900, ext. 267
    Email Contact
    Click here to see all recent news from this company
    10 Nov 2010, 06:05 PM Reply Like
  • grahamanddodder2
    , contributor
    Comments (28) | Send Message
    Midas Fund Turns Gold’s Rise Into Return on Miners (Update1)
    February 11, 2010, 4:45 PM EST
    By MaryAnn Busso


    Feb. 11 (Bloomberg) -- Gold had a good year in 2009. Tom Winmill’s Midas Fund had an even better one.


    The $125 million fund, which invests in companies that mine or process metals or other commodities, rose 83 percent last year. That return beat 95 percent of the fund’s peers, according to data compiled by Bloomberg. This year, the fund dropped 7.6 percent through Feb. 10. Its average annual return was a decline of 4.8 percent over three years and a gain of 13.5 percent for five years.


    Winmill, 50, says his training as a lawyer helps him sift through engineering reports on mining deposits, Bloomberg Markets reports in its March 2010 issue. “That’s much more important than putting on your hiking boots and walking around the mine,” he says.


    Among the items high on Winmill’s checklist when picking stocks: a miner’s ability to start production on time and on budget and to preserve the value of its shares. “I like to see a mining company that pays a dividend, occasionally does a stock buyback -- instead of constant stock issuance -- and doesn’t make dilutive acquisitions in order to extend their empire,” Winmill says. Those three things, combined with a good project, are key, he says.


    $1,500 Forecast


    As of January, Winmill had the majority of the fund’s assets in stocks of gold-mining companies. Returns on miners’ shares tend to amplify the returns on gold because of the companies’ operating leverage, Winmill says. That gave the fund a boost from a bullish market as investors sought to protect the value of their holdings. “The devaluation of the dollar and the bursting of the bond bubble are going to hurt a lot of investors,” Winmill says. “And inflation is going to hurt a lot of savers.”


    In January, Winmill predicted gold prices will average $1,200 an ounce (31 grams) during the first quarter and increase to $1,500 by the end of the year. Gold rose 24 percent last year. This year, it dropped 2 percent to trade at $1,072 an ounce on Feb. 10.


    Among the miners that meet Winmill’s investment test is Northern Dynasty Minerals Ltd. The Vancouver-based company is developing Alaska’s Pebble gold and copper project in partnership with Anglo American Plc. Shares of Northern Dynasty, which is 20 percent owned by Rio Tinto Group, rose 124 percent in 2009. This year, the stock rose 3 percent to trade at $8.52 on Feb. 10. “They’ve got experienced, well-capitalized partners who really know how to get the ore out of the ground,” Winmill says.


    Gold and Silver


    Midas also owns shares of Jaguar Mining Inc. The Concord, New Hampshire-based company is bringing older gold mines in Brazil back into production. Winmill says Jaguar’s output might reach 600,000 ounces in about five years, up from 115,000 ounces in 2008. He says the company is likely to be acquired. Jaguar’s shares jumped 114 percent in 2009. This year, they fell 14 percent to trade at $9.60 on Feb. 10.


    Midas’s holdings also include Silvercorp Metals Inc. and Fresnillo Plc. Shares of Vancouver-based Silvercorp, which has been buying high-grade mines in China, rose 210 percent last year. Stock of Mexico City-based Fresnillo, which operates silver mines in Mexico, was up 244 percent in 2009.


    Winmill says he looks at gold through four filters: U.S. fiscal policy, U.S. monetary policy, market supply and demand, and geopolitical events.


    Preserving Value


    Growing U.S. budget deficits will reduce the dollar’s purchasing power, he says. From 2001 through 2009, U.S. money supply almost doubled to $8.5 trillion. During the next decade, U.S. gross domestic product of about $14 trillion is likely to grow an average of only 1 to 2 percent a year, Winmill says. “We’ll double the supply of dollars and have about the same amount of wealth, so the dollar will have about half the purchasing power that it has today,” he says. Given that assumption, gold will be a way to preserve value, he says.


    As the deficit expands, the U.S. Federal Reserve will have less ability to control inflation, Winmill says. He forecasts a 3 percent inflation rate by the end of this year and as much as 5 percent in 2012. The U.S. consumer price index rose 2.7 percent in December from a year earlier.


    The Fed is holding its target for the federal funds rate at zero to 0.25 percent to stimulate manufacturing and exports, and that’s driving the dollar down, Winmill says. “It’s great for the price of gold,” he says. “As the dollar goes down, it’s going to take more dollars to buy the same ounce of gold.”


    Supply and Demand


    The supply-and-demand outlook is mildly bullish: Scrap supply is up, jewelry demand is down, central banks have been buyers of gold and mined supply is trending lower, Winmill says. The least-important filter for analyzing gold is geopolitical events such as impending wars, he says, since prices usually reflect the worst expectations. For a short-term strategy, it’s better to buy gold when things calm down and sell when there’s maximum pessimism, he says.


    Winmill, who grew up in Locust, New Jersey, graduated from Yale University in 1981 and earned a law degree from the University of Washington four years later. After working as a lawyer in Seattle, he joined Bull & Bear Group Inc. in 1988. The New York-based investment management firm, which was headed by his father at the time, changed its name to Winmill & Co. in 1999. The firm bought the Midas Fund in 1995. After gold dropped to a low, the firm terminated its agreement with the fund’s subadviser in 1999, leaving Winmill to help reorganize the fund’s investments. He took over as portfolio manager of the fund in 2002.


    ‘Terrific Spot’


    In 2008, Winmill and his wife moved from New York to Walpole, New Hampshire, to be closer to their two sons, who were going to school in the state. Winmill says he’s taken to rural life. He splits wood and taps the maple trees on his land. Last spring, he boiled the sap to make maple syrup. “We got about 2- 1/2 gallons,” he says. The steam from the process also peeled some wallpaper in his 1866 house, he says with a laugh.


    The Midas Fund isn’t only about gold, Winmill says. “I’m not a gold bug,” he says. “I’m a capital-appreciation bug.” To find returns for investors, the fund has the flexibility to invest in platinum, copper and other commodities, he says. At the moment, it doesn’t have to. “Right now, I think gold is in a terrific spot,” he says.


    --Editors: Jon Asmundsson, Beth Williams


    To contact the reporter on this story: MaryAnn Busso in New York at;
    10 Nov 2010, 06:09 PM Reply Like
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