- Initiated a position in Marathon Petroleum (MPC) — a very interesting asset play with a soon-to-be flush balance sheet
- Updated my estimates for the upcoming Mylan-Upjohn merger (to be called Viatris) — my favorite upcoming special situation
- Part 1 of my “thematic” bet on taxes and generic drugs — my holdings in tax services such as H&R Block and Blucora are starting to pile up!
Portfolio at 10.5.20
Here’s a look at the portfolio today vs 2 weeks ago on the last post…
BEBE essentially trades in $0.20 increments on a $4 stock and it traded last week so it made a dent in my position…
Cross-Harbour announced a buyout so that position is gone (and the main reason for cash being higher).
Verso Paper (VRS) finally paid out the first special dividend which brought in some cash too.
Most of these stocks are cheap (low multiple) businesses with good cash flow. Some are levered but most have decent balance sheets. Some pay heavy dividends (something I like in the current market).
Plenty of changes! After seeing a buyout offer from a large holding, I’ve started to redeploy into other ideas but cash levels are still higher.
- Exited Cross Harbour Holdings (CRHHF)
- Cross Harbour received a buyout offer from management at 14HKD in September… This is still a pretty hefty discount to book value at 20+ per share (made up of mainly cash and securities). I purchased my shares at about 11HKD so it made sense to take the 25%ish return and move to the next best idea. Net-nets can still be lucrative!
- Added to Mylan (MYL)
- Check out the post above with my outlook for Viatris… Shares have continued to drift lower all year as many are discounting what the new company can do. Cheap, minimal debt, tons of cash to deploy, a new management team. Lots to like here…
- Added to Meredith Corp (MDP)
- This is another “drifter” which hasn’t recovered since COVID came around. They own some great digital properties and have been transitioning from paper-based subscriptions to digital (a successful strategy for NYT). The TV stations are clearly valuable in a sale or spin situation (something the company has hinted at on numerous occasions). It’s a levered business after the refinancing of the preferred equity (a smart move for the company) but there are valuable assets and good cash flow. This should be a 2-3 bagger or more over the next 12-24 months.
- Added to Blucora (BCOR)
- I’ve written about this one before. It feels like a good addition below $10 per share. I was surprised how well the wealth management business has held up in Q2 and I’m confident the TaxACT business will recover into 2021.