Notable Calls
RSS feedNotablecalls@gmail.com
Friday, August 25, 2006
Paperstan
According to the WSJ's "Ahead of the Tape" column, the housing mkt is deteriorating, but many private-equity firms and hedge funds still see real estate as a game worth playing. For some proprietary-trading desks at investment banks and hedge funds, one of the better guides to that game is a report from Citigroup's Citigroup Global Markets that came out within the past few weeks highlighting stocks that have substantial real-estate value relative to the total value of their enterprise. Many of the co's on the list are restaurant chains, including Bob Evans Farms (BOBE), Denny's (DENN) and Lone Star Steakhouse & Saloon (STAR). Also high on the list, produced by Citi senior analyst Jonathan Litt, are health-care co's including Tenet healthcare (THC), Capital Senior Living (CSU) and Genesis HealthCare (GHCI). Mr. Litt has a good track record. Of the 103 co's he singled out in a similar list last year, 14 were acquired or part of mergers. Those acquired co's generated an avg return of 30.2% between the time he pointed them out and the time they were taken over. Among them was one of the biggest takeover tgts ever, HCA (HCA). The overall list outperformed the S&P 500, he says. More deals from the latest list have been popping up. The last week of July, Buffets agreed to buy Ryan's Restaurant Group (RYAN), one of Mr. Litt's top picks, for $876m, a 49.3% premium to the closing price the previous day. "We bought shares the day after we saw the [latest] report," says a senior trader at the bank of a Citi competitor.
According to the Barron's Online, a multibillion dollar auction of US airwaves is under way in Washington, and the big surprise is the aggressive bidding by the nation's cable co's, led by a consortium controlled by Comcast (CMCSA), the biggest. Total bids are now a staggering $13bn. Comcast's bids, which topped $2bn this week, are the clearest sign yet that the cable giant may plan to own and operate its own wireless network, perhaps someday offering a bundle of video, Internet and phone services that work at home and on the road, via advanced cellphones. That may be bad news for dominant cellphone providers, such as the Verizon Wireless, having to fight a new challenger in mkts that have already seen aggressive price competition. But the good news for Comcast is that investors have enough confidence in CEO Brian Roberts to believe any network buildout will be done at a pace that won't drastically erode Comcast's cash flow anytime soon. "If done wisely and in a rational manner, this could be an important new area of growth for them," says Warren Koontz, manager of the Loomis Sayles Large Cap Value Fund, which owns Comcast shares.
"Inside Scoop" section highlights Extra Space Storage (EXR), whose CEO Kenneth Woolley has shelled out $5.6m to buy 340K shares of the co. After his recent buying spree, Woolley beneficially owns about 1.8m shares of Extra Space, or 3.4% of the co's 51.8m outstanding shares.
According to the Barron's Online, a multibillion dollar auction of US airwaves is under way in Washington, and the big surprise is the aggressive bidding by the nation's cable co's, led by a consortium controlled by Comcast (CMCSA), the biggest. Total bids are now a staggering $13bn. Comcast's bids, which topped $2bn this week, are the clearest sign yet that the cable giant may plan to own and operate its own wireless network, perhaps someday offering a bundle of video, Internet and phone services that work at home and on the road, via advanced cellphones. That may be bad news for dominant cellphone providers, such as the Verizon Wireless, having to fight a new challenger in mkts that have already seen aggressive price competition. But the good news for Comcast is that investors have enough confidence in CEO Brian Roberts to believe any network buildout will be done at a pace that won't drastically erode Comcast's cash flow anytime soon. "If done wisely and in a rational manner, this could be an important new area of growth for them," says Warren Koontz, manager of the Loomis Sayles Large Cap Value Fund, which owns Comcast shares.
"Inside Scoop" section highlights Extra Space Storage (EXR), whose CEO Kenneth Woolley has shelled out $5.6m to buy 340K shares of the co. After his recent buying spree, Woolley beneficially owns about 1.8m shares of Extra Space, or 3.4% of the co's 51.8m outstanding shares.
posted by notablecalls # 4:43 AM 
Archives
June 2006 July 2006 August 2006 September 2006 October 2006 November 2006 December 2006 January 2007 February 2007 March 2007 April 2007 May 2007 June 2007 July 2007 August 2007 September 2007 October 2007 November 2007 December 2007 January 2008 February 2008 March 2008 April 2008 May 2008 June 2008 July 2008 August 2008 September 2008 October 2008
