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Archive for the ‘Catalysts’ Category

Empirical Finance Research Blog has a review of a new paper, Repurchases, Reputation, and Returns, which finds that long-run stock returns are higher for companies announcing buybacks that had substantially completed a previous buyback. In other words, companies with a track record for following through on announced buybacks enjoy higher returns following a subsequent buyback [...]

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Rackable Systems Inc (NASDAQ:RACK) has filed its 10K for the year ended January 3, 2009. We’ve been following RACK (see our post archive here) because it is an undervalued asset play with a plan to repurchase almost 40% of its stock. The stock is up 10.1% from $3.56 when we added it to the Greenbackd [...]

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Following on from our earlier post, Seth Klarman on Liquidation Value, we present the second post in our series on Klarman’s Margin of Safety: Risk-Averse Value Investing Strategies for the Thoughtful Investor. As we discussed in our first post, Klarman is the founder of The Baupost Group, a deep value-oriented private investment partnership that has [...]

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In a paper published in February this year, Entrepreneurial Shareholder Activism: Hedge Funds and Other Private Investors, April Klein and Emanuel Zur examine recent “confrontational activism campaigns” by “entrepreneurial shareholder activists” and conclude that such strategies generate “significantly positive market reaction for the target firm around the initial Schedule 13D filing date” and “significantly positive [...]

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Ken Squire argues in a feature article in this week’s Barron’s magazine, A Golden Age for Activist Investing (subscription required), that the “political climate, shareholder sentiment and opportunities available to activists” means that “the sun, the moon and the stars have moved into alignment for activist investing.” Squire believes that the knowledge that investors “can’t [...]

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We’re often banging on about stock buy backs to anyone who’ll listen. We like them because they represent the lowest risk investment for any company with undervalued stock. The S&P500 peaked at 1,576.09 on October 11, 2007. It’s now off a lazy 47% to 827.50. It’s probably fair to say that the average stock is [...]

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The New York Times’ Dealbook has a copy of Ramius Capital’s recent white paper, The case for activist strategies. The paper seeks to explain how activist investment strategies create shareholder value and improve corporate governance by resolving conflicts of interest between shareholders, directors and management. Perhaps most interesting for Greenbackd readers is the paper’s discussion [...]

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A stock buy-back is a great way for a deeply undervalued company to quickly increase its per share value. After identifying an undervalued asset situation, we look through the company’s filings to see if it has any existing plans authorizing it to buy-back its stock. On the rare occasions when we do locate such plans, [...]

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