2013 – The Great Irish Share Valuation Project (Part IX)

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Allied Irish Banks, Bank of Ireland, Biogen Idec, Dalradian Resources, Datalex, Elan Corp, ELG Scheme, Fastnet Oil & Gas, FBD Holdings, IIU, Irish shares, Irish value investing, Pageant Holdings, Permanent TSB Group Holdings, Prime Active Capital, Royalty Pharma, TGISVP, The Great Irish Share Valuation Project, US Oil & Gas

Continued from here. [If you’re new to the series, I recommend you re-visit my first 2013 TGISVP post].

Company:   Elan Corp

Prior Post:   Here

Ticker:   ELN:US

Price:   $11.61

Last year, I had Elan pegged for a significant fall – which definitely appeared to be on the cards with the share price falling 25%+ to sub-$10 levels in Dec & Feb. In the past 2 months, however, they’ve certainly pulled a rabbit from the hat with their recent Biogen Idec (BIIB:US) deal. This hands full control of Tysabri back to Biogen, but in return Elan receives $3.25 billion of cash, and a 12-25% royalty on future global net sales. Post-restructuring, Elan was almost entirely dependent on Tysabri – so this deal transforms the company into a highly attractive pot of cash, and a low cost/high margin royalty stream.

Unfortunately, management didn’t quite grasp this was shareholder’s money – they acted like all their bloody Xmases had come at once! They’ve promised a share buyback, but their main plan is to use the majority of the proceeds & royalties to acquire a brand new portfolio & pipeline. This is coupled with a projected reduction in annual operating expenses to (only?) $180 million per year! This has lured Royalty Pharma out of shadows, to offer shareholders an interesting alternative: An $11.00 per share bid.

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How About Another Catalyst? (Part V)

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activist investors, Bill Ackman, Carl Icahn, Chapman Capital, Daniel Loeb, Eddie Lampert, Free Capital, Guy Wyser-Pratte, IIU, Laxey, QVT, SEC Edgar, TVC Holdings, Weiss

Continued from here:

iv) Activist Investors are the next catalyst I’d like to highlight. Obviously, there’s no well-defined timeline involved here, but considering the approach of most hedge funds (who comprise the majority of activists) and their return expectations, a timeline of 6 months to 2 years.

Activists targeting asset discounts/realizations will tend to have a shorter holding period, while activists seeking operational change are usually forced to adapt to a longer investment horizon. With the multitude of investment trusts and companies listed in London, activists have generally focused on the former type of operation, while elsewhere in the world they focus more on significant operational changes/improvements to a business.

The Great Irish Share Valuation Project II

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Alkermes, CPL Resources, CRH, Datalex, DCC, Donegal Creameries, Elan, FBD Holdings, Grafton Group, Great Western Mining, IIU, Liberty Mutual, Monaghan Mushrooms, Produce Investments, Sherlock, TGISVP

OK, folks, let me throw another dozen stocks into the mix!

The Great Irish Share Valuation Project II     (xlsx file)

The Great Irish Share Valuation Project II     (xls file)

A couple of housekeeping items, if you’ll take a look at the first (Wexboy) sheet:  I’ve added a Blog Link column to the right – if I’ve written about a stock already, you’ll find the link there. I’ll bold any stock (see FBD, for example) where I’ve disclosed an ownership stake. I’ve also added some averages at the bottom of the sheet. I’ll discuss these in more detail when there are valuations for a majority/all of the shares listed, but they’re pretty self-explanatory and already look interesting.