Sirius Real Estate – I’m Out

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commercial property, German property, Karoo Investment Funds, KWG Kommunale Wohnen, Laxey, Margin of Safety, NAV discount, Net LTV, Principle Capital, residential property, Sirius Real Estate, special situations, SRE, Weiss

I’ve completely disposed of my remaining Sirius Real Estate (SRE:LN) holding. [I previously noted a small sale in August, reducing my portfolio stake to 2.8%]. This is a rare event – in the past year, my selling’s been mostly limited to top-slicing as certain stocks neared/exceeded my price target(s). Crikey, I must sound like a bloody buy & hold investor!? Rarer still, I think it’s only my second disposal of an investment that clearly hasn’t been working out. [Cresud (CRESY:US) was the first – a v different macro decision. Fortunately, the right decision…the stock’s down nearly 25% since!]

I actually managed to avoid a loss in both instances – not what you’d expect from stocks that haven’t worked out..! Obviously, there was plenty of luck involved – but I’d definitely credit a good entry price as a key saving grace. Having the discipline to demand an adequate margin of safety for each purchase isn’t just about increasing your potential upside – it can also save your bloody ass when things go wrong. Let’s take a closer look (using my original Sirius post for reference) & see if there’s anything to learn here:

Investment Opportunity & Crisis Hedge:   My investment thesis identified German property as a secular investment opportunity – it’s cheap in absolute terms, the German economy’s perhaps the most resilient in Europe, and Bund yields remain incredibly supportive. I continue to believe this thesis is correct, but actual property & share price gains to date have been mostly enjoyed by the residential sector. [Check out my German property series: Parts I to V]. I also suggested German property might be a good hedge against any further unraveling of the European sovereign debt crisis. Fortunately, sentiment’s improved dramatically this year – it’s interesting to see German residential share prices peak & then trade sideways/lower for much of the year, as investors migrated back into higher risk European exposure.

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EIIB – So, You Want to Run a Marathon..?!

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Damille, DiamondCorp, discount control mechanism, doughnut boy, EIIB, HBG Holdings, Laxey, marathon, NAV discount, Qannas Investments, quid pro quo, QVT, Rasmala, share buyback, sukuk, tender offer, Total Expense Ratio, track & field, Weiss

C’mon, you’re kidding..? No, seriously, you’re taking the mickey?! In March, the European Islamic Investment Bank (EIIB:LN) (which I last wrote about here) share price looked ready to challenge the GBP 3.9-4.25p resistance zone. This has capped EIIB for almost 3 years now. But here we are, 1 month later, and the price hit GBP 2.8p just in time for Easter – off 24%! No change in volume, or holdings…what’s going on?! And it’s not clear the board have noticed… But I’m sure they’re well aware of EIIB’s intrinsic value, and are focused on the marathon task of their new operating strategy…

All very well but, as any health professional will tell you, before embarking on (and to be successful in) a marathon, you should first do a health check and then scale up with plenty of walking, exercise, jogging, running and even some fartlek. So health check first, then track & field, and then marathon..! But the current share price (and NAV discount) certainly don’t present a healthy diagnosis of the budding athlete…

How About Another Catalyst? (Part VII)

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activist investors, Clearance Capital, DCD Media, EIIB, HBG Holdings, Joe Lewis, Laxey, Leo Fund Managers, Max Property, Minco, Net LTV, Nick Leslau, Principle Capital, Quintain Estates, Sirius, stockbrokers selling sandwiches, Taube Hodson Stonex, Terra Catalyst, Timeweave, Weiss

Continued from here:

In my previous post, I highlighted over a dozen listed activist investor vehicles (some at v interesting discounts) you can invest in. Additionally, you might also want to look at individual company situations – as I commented about activists: ‘Use them wisely (and profitably) to cherry pick and/or endorse your conviction stocks.’ Here are some interesting examples:

Timeweave (TMW:LN):   I’ve written here about Timeweave, which has Joe Lewis on board with 29.99%, with another 5% in the hands of Leo Fund Managers. TMW has a steady business, pots of cash, and a whopping 10.4% dividend yield. If you strip out cash, it’s actually on a 4.7 P/E! Despite all this, it can’t seem to get any respect – take a look at the share price. But we all know shares like this, and wonder when we’ll see a decent return…

How About Another Catalyst? (Part VI)

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ABC Arbitrage, activist investors, Biglari, Bourbaki, Carl Icahn, Christopher Mills, Crystal Amber, Damille, GPG, Harbinger, Laxey, Risk Arbitrage, Ron Brierley, Sherborne Investors, Terra Catalyst

Continued from here:

I’m not suggesting you swap your whole portfolio into an activist tracker portfolio! There are some websites/blogs out there suggesting this approach, but I’m not convinced. This probably just reflects my (mild) aversion to ‘mechanical’ investing approaches. I also think if you actually tackled this kind of project in the manner it deserves, you’re probably a pretty experienced and disciplined investor already!

The other problem is that many activists, by definition, are often taking on poorly performing companies, possibly with equally poorly performing management. (Another reason activist hedge funds always have their eye on the clock!). Or they invest in a situation where, for the life of me, I can’t see any apparent value. Do you really want to coat-tail on an investment like that?

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.