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Special situations fans might want to have a look at one almost right from the pages of Joel...

Special situations fans might want to have a look at one almost right from the pages of Joel Greenblatt's book. Spun off as part of the Leucadia (LUK)/Jefferies (JEF) merger and now trading is Crimson Wine Group (CWGL.PK). Leucadia owners received 1 share of Crimson for every 10 shares of LUK they owned. It's wine, it trades OTC, and it's not worth a lot - in other words, Leucadia shareholders may end up dumping the stock for reasons having nothing to do with its value.
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Comments (9)
  • stevereid
    , contributor
    Comments (31) | Send Message
    What is the price per share of Crimson Wine Group, Ltd?
    26 Feb 2013, 12:54 PM Reply Like
  • wyostocks
    , contributor
    Comments (8856) | Send Message
    26 Feb 2013, 12:56 PM Reply Like
  • swaps
    , contributor
    Comments (1366) | Send Message
    The current price related to LUK would indicate the current market has priced Crimson as being worth about three percent of LUK's total holdings.


    Crimson Wine Group Ltd. had sales of $34 million last year and Seghesio Family Vineyards sold another $7 million in product.


    This is real thumbnail. Leucadia had 244 million shares outstanding last fall, so presumably around 24 million shares of Crimson will be distributed. At a price of $7.80 a share the rough market cap is around $180 million. So the stock is about 4.5 times sales.


    And about three percent of the roughly $6.4 billion market cap of LUK as of today.


    yahoo finance would not provide a market cap estimate for Crimson so the figures I offer up are very raw and subject to any welcome attacks or corrections.
    26 Feb 2013, 01:45 PM Reply Like
  • Neal Shanske
    , contributor
    Comments (21) | Send Message
    Company stated yesterday that there are 24.5 million shares outstanding, roughly in-line with your estimate.
    26 Feb 2013, 01:58 PM Reply Like
  • freeman8201
    , contributor
    Comments (809) | Send Message
    I plan to hold my crimson shares.....hey it was free.or kinda free.
    26 Feb 2013, 09:34 PM Reply Like
  • freeman8201
    , contributor
    Comments (809) | Send Message
    REading the pamphlet from leucadia I notice that Jefferies' advise leucadia to divest Crimson as it is worth no more than its book value and better than trying to sell at a profit and/or hold.
    28 Feb 2013, 03:43 PM Reply Like
  • steppppo
    , contributor
    Comments (243) | Send Message
    As of 2 p.m., it's up to $8 a share.
    26 Feb 2013, 02:02 PM Reply Like
  • Luis Hernandez
    , contributor
    Comments (134) | Send Message
    It is trading at around book value right now. Let´s see if it crashes.


    The key here is the intrinsic value of the real estate, not the cash flow. It is definitely a hard one to figure out.
    26 Feb 2013, 06:51 PM Reply Like
  • loony911
    , contributor
    Comments (6) | Send Message
    According to the latest Form 10 for CWGL. They have ~$180mm in Pro Forma TBV.


    Treasury Wine Estates Ltd. (PINK:TSRYY) has ~$1.95bn in TBV according to the latest interim results (2/28) and trades at a 2.0x TBV and has ~1.85x net leverage vs CWGL's debt free balance sheet.


    Risks: Illiquidity. Cumming (8.7%) and Steinberg (9.7%) decide to blow out.


    Reward: Underfollowed and underappreciated. At 2.0x TBV (arguably conservative compared to TSRYY, given its riskier balance sheet) it's easy to see how this trades 30-40% higher.


    Here is an article from TAM Capital Management further laying out the bull case.



    Happy investing.
    13 Mar 2013, 02:16 AM Reply Like
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