Learn to Love the Distress

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Apollo Commercial, Colony Financial, Goldman Sachs, Kinder Morgan Energy, Leverage, PennyMac, REIT, Starwood Property

I’m no big fan of US REITs (or MLPs). I can’t count the number of excitable headlines/articles I’ve read about REIT/MLP yields…but still wonder if there’s a decent investment amongst the entire bunch?

You’re certainly not going to find one in the non-traded REIT sector. You may have never heard of these, but you can bet they know all about them down at the senior centre. What’s the sales pitch for this garbage? Hey, we’ll take 10% up-front in commissions, we’ll charge you again to redeem (if we even let you redeem), you’ll have no idea what your shares are really worth…but, gee heck, look at the yield!! Oh, and we’ll never point out that much of your yield is simply a return of capital. Perfect for the old dears… Read this v entertaining REIT forum. But this isn’t just a US phenomenon, there’s plenty of similar horror stories in Europe too.

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Total Produce – So, What You Buy Down The Market?

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Bidvest, Capespan, IFG Group, Net Interest/EBITA, pdosullivan, Price/Sales, PSG Group, share buyback, Total Produce, Zeder

Total Produce (TOT:ID)

• Mkt Price:  EUR 0.39
• Mkt Cap:  EUR 128.7 mio
• Net Int/EBITA%:  9.0%
• P/E:  5.6
• P/S:  0.05
• Div Yield:  4.6%      

Time to update my recent Total Produce post. First, a shout out to Philip at pdosullivan who emailed me to highlight Total’s increased stake in Capespan Group Ltd. There are some good follow-up comments here also. A good spot – I looked some years back, and somehow concluded Total’s shareholding was in a Capespan sub. rather than the parent company?! Based on this, I mistakenly decided not to revisit this as a component of my TOT investment analysis. Then again, the lack of transparency and disclosure from Total regarding this shareholding is rather infuriating.

Farming…Back in the US, Back in the USSR

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Alpcot Agro, Aqua Bounty Technologies, Black Earth Farming, farmland, Gain on Biological Assets, garbage stocks, Landkom, Market Cap/hectare, Petroneft Resources, Trigon Agri

Continued from here:

Now we can finally home in on my Top 6 most undervalued farmland companies. I’ve listed them according to their level of undervaluation:

Landkom (LKI:LN):  Ukraine – Oilseeds & Cereals  [(0.5) years]

Alpcot Agro (ALPA:SS):  Russia (92%, but half is leased) & Ukraine (8%) – Cereals  [0.8 years]

Black Earth Farming (BEFSDB:SS):  Russia – Cereals  [0.7 years]

Trigon Agri (TAGR:SS):  Russia (2/3) & Ukraine (1/3) – Cereals  [2.5 years]

MCB Agricole (4GW1:GR):  Ukraine – Cereals & Oilseeds  [(0.5) years]

Sintal (SNPS:GR):  Ukraine – Cereals  [(1.4) years]

Farming, Back in the USSR

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Alpcot Agro, Black Earth Farming, Black Earth region, Continental Farmers Group, Cresud, farmland, Market Cap/hectare, Trigon Agri

Today, with some regret, I let go of one of the agricultural plays in my portfolio.

I wrote in a recent article about ‘…the increasing global demand for protein as living standards improve around the world…’. This prompted me to identify farmland as perhaps the purest investment opportunity to exploit this trend. Imagine my delight on discovering the most fertile farmland in the world coincided with some of the cheapest (productive) farmland globally. I highlighted the Black Earth region of Ukraine & Russia as one of the best farmland opportunities, and promised to write about it at a later date.

Don’t Bank on the Banks!

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3-6-3, Allied Irish Banks, Bank of Ireland, EIIB, iShares Turkey ETF, Loan-to-Deposit Ratio, TBTF, valuestockinquisition, Wilbur Ross, WisdomTree ETF

John from valuestockinquisition.com left a great comment here, and I thought I’d set down some thoughts here with a blog post rather than a comment:

I’m not too worried about EIIB (EIIB:LN) in this context, at this point I pretty much consider it to be a failed bank experiment. Now, they just need to monetize their bank licence and move on. More generally, John has some great points and examples, and I’m sure he could provide more. It’s like fingers in the dyke – for every bank ratio you focus on, there’s another you’re forgetting and that’s about ready to spring a leak. And he highlights that no ratio’s proven to be a reliable predictor of success or failure. God, all in all, just look at any specific TBTF bank and it really just looks like one great bastard of a Rube Goldberg contraption…

Duh, Duh, Dhir…

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Adjusted NAV, Aurora Russia, Dhir India, distressed assets, market-makers, message boards, Price/Book, Price/Cash, wind-down

Dhir India Investments (DHIR:LN)

• Mkt Price:  GBP 16p
• Mkt Cap:  GBP 2.67 mio
• P/C:  0.36  (adjusted)
• P/B:  0.12

Just because I’m a value investor, doesn’t mean I won’t make speculative bets, it just means I like to use value investing to determine that bet..! Here’s one I’ve finally jumped into:

Dhir India’s the only UK-listed investment vehicle offering fund managers/investors exposure to distressed assets and companies in India. The fund invests in 4 types of transactions: Turnaround of companies, re-sale of companies/assets, break-up and sale of assets and bridge financing. Charlie Hambro is the Chairman, while the Investment Manager Shiva is headed by Alok Dhir. Dhir’s been practicing insolvency law for over 20 years, and is a successful investor in Indian non-performing assets. The company was launched in mid-2007, and promptly completed 6 investment projects (1 listed) by year-end.

Trinity Biotech – Cheap Diagnostics

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Clearstream Technologies, ELG Scheme, Ex-Cash Ratios, FBD Holdings, intrinsic value, Owner-Operator, Price/Sales, relative value, Trinity Biotech, value investing

Trinity Biotech (TRIB:US)

• Mkt Price:  $9.57
• Mkt Cap:  $203.1 mio
• P/E Ratio:  13.5
• Ex-Cash P/E:  9.1
• P/S Ratio:  2.6
• Ex-Cash P/S:  1.5

Trinity Biotech specializes in the development, manufacture and marketing of diagnostic test kits. These kits are used in the clinical laboratory and point-of-care segments of the diagnostic market to detect infectious diseases, sexually transmitted diseases, autoimmune and hemoglobin disorders, and to detect, monitor and control diabetes. It’s also a significant provider of raw materials to the life sciences industry. TRIB is headquartered in Ireland, with Irish and US manufacturing facilities, and quoted on NASDAQ. Through R&D and acquisitions, the company’s assembled a portfolio of over 400 products to date. It has a direct sales force in the US and UK, and sells in 75 other countries via a network of distributors.

Er, Throw That Fish Out – It’s Reached its Sell-By Date

Tags

AIM stocks, garbage stocks, Hot Tuna, surf brands

On Thursday, I shared my bemusement upon rediscovering Hot Tuna (HTT:LN). Great memories, but an appalling valuation and share price history, and even more appalling management. I wondered ‘…is this the worst AIM stock ever?!?’

After a last gasp sales surge since then – yes, I believe they sold almost 50 t-shirts over the weekend – they woke up Monday morning with a God-awful hangover and empty pockets. Jeez, time to sell the rest of the t-shirts, the van, the drunk surfer girl in the corner who won’t wake up, even the damn Hot Tuna brand itself..!

EIIB (EIIB:LN) – The Strongest Bank in the World? (Part II)

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activist investors, DiamondCorp, EIIB, Equity/Total Assets, HBG Holdings, Margin of Safety, Sharia'a, sukuk, value investing

European Islamic Investment Bank (EIIB:LN)

Mkt Price:  GBP 3.625p

Mkt Cap:  GBP 64.0 mio

Equity/Total Assets Ratio:  69.2%

P/B Ratio:  0.45  (adjusted)

P/C Ratio:  0.59  (adjusted) 

Fair Value:  GBP 8.09p

Upside Potential:  123%

Continuing from my previous EIIB post:     Let’s not forget that EIIB is a bank. Why am I re-stating the obvious? Well, I know it seems like banks are ten a penny (actually true in the US, with a recent count of 6,500 banks, if you can believe it!), but a new banking licence in the UK is a pretty rare thing. Especially an Islamic banking licence. I’ve no real idea of how much that’s worth, but it’s certainly a valuable intangible that isn’t listed anywhere on the B/S. EIIB presents a cheap entry to any financial institution who’s contemplating entering (or bulking up) in the UK and/or the Islamic finance market. When you consider the strength of EIIB’s B/S, the FSA licence (which would otherwise take at least a year to obtain) and the potential business contacts/opportunities gained, why not pay a premium to Book in a takeover situation? One should also consider the leverage potential implied – EIIB could almost quadruple its B/S, still be considered a very safe bank (with a near 20% Equity/Total Assets Ratio) and presumably achieve a radical transformation of its P&L and Return on Equity. Nobody’s cup of tea right now, and not a strategy that is being signaled by the company, but still something to consider…

Pleased to Report!

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Cresud, MarketFolly, Seeking Alpha, Wordpress

I’m pleased to report I’ve just received a ‘gold star’ from Seeking Alpha!

How come I never got any of those as a kid? All I ever got was regular belts of the ruler… Hmm, who’s getting the most out of this – that SA logo’s pretty big!

Once I began this blog, my intention was to also contribute (at least for US listed stocks) and link my blog to Seeking Alpha. I thought a condensation of my recent Cresud (CRESY:US) posts (I don’t think they’re into Irish farmland commentary) would be a good place to start – here’s the article. It actually survived the SA editors relatively unscathed, although they dumped the new title I’d dreamed up: “Cresud – Pretty Pampas Play!“. Surely that’s the kind of title the meedjya love..?