Welcome to the February 8, 2010 edition of  the Festival of Stocks. This is the 179th edition of this long running blog carnival. The Festival of Stocks is a blog carnival dedicated to highlighting bloggers best posts on stock market related topics. Fat Pitch Financials is the actual birth place of this online weekly event, so it is always a special occasion when I get the chance to host this roving event.

I’ve just finished digging out from the blizzard that hit the DC area this past weekend. The street here is still not plowed and my back is a bit sore from shoveling. I’m more than happy to be sitting down to read another great edition of the Festival of Stocks with a nice cup of hot chocolate.

In addition to the normal submission to this week’s Festival of Stocks, I’m also going to highlight the top stories this week at Value Investing News. So without further delay, here are this week’s articles for the Festival of Stocks: Read the rest of this entry »

The Fat Pitch Financials Portfolio has been off to a strong start in 2010. As of the market close on January 29, 2010, the Fat Pitch Financials Portfolio was up 1.38% for the month versus a negative 4.57% return for the S&P 500 over the same period of time. As you might recall, the Fat Pitch Financials Portfolio ended 2009 with a balance of $1,233,461.25. That balance has now grown to $1,261,199.83.

I launched this paper portfolio back in September of 2004 on Marketocracy with a virtual starting balance of $1 million and a per share value of $10. I created this paper portfolio shortly after I started the Fat Pitch Financials blog as a way my readers could track my stock picks. The objective of this portfolio is to invest in companies with wide moats that are selling for prices that provide for a significant margin of safety.

Over the past 12-months the FPF Value Port is up 60.84% versus just 30.10% for the S&P 500. The orange line in the graph below shows how the Fat Pitch Financials Port relative to the major indexes.

Price History for the Fat Pitch Financials Portfolio (as of January 29, 2010)

As you can see, the Fat Pitch Financials Port has outperformed the major indices since the end of last spring. According to Marketocracy, the Fat Pitch Financials Portfolio has outperformed 79.2% of all other Marketocracy funds over the past 2 years.

Returns as of January 30, 2010

Since inception in September of 2004, the FPF Value Port produced an annualized return of 4.37% versus the 1.12% return of the S&P 500. I’m proud that I’m beating the S&P 500 by 3.24%, but I hope to increase this margin substantially over the coming years.

Current Positions as of January 30, 2010

There were no new transaction in January. I’ve been waiting patiently for the market go into another panic. I looks like that could happen now in February.

The major news in January is that Destination Maternity (DEST) finally turned a profit in quarter one. It also looks like Kraft (KFT) is going to Cadbury (CBY) regardless of Warren Buffett’s advice to the company. Finally, I also reported on Premier Exhibitions Investor Day Presentation in January. I’m hoping that I’ll find a fat pitch opportunity in February to put some of the $153,474.32 in cash remaining in this portfolio to work.

Disclosure: I own shares of Western Sizzlin (WEST), Steak N Shake (SNS), Broadridge Financial Solutions (BR), Microsoft (MSFT), Western Union (WU), Kraft Foods (KFT), eBay (EBAY), Concord Camera (LENS), McGraw-Hill (MHP), Destination Maternity (DEST), Sotheby’s (BID), Pfizer (PFE), US Bancorp (USB), Wells Fargo (WFC), USG (USG), and Premier Exhibitions (PRXI).

Yesterday Premier Exhibitions (PRXI) gave a presentation to investors and shareholders in Las Vegas, Nevada on the company’s efforts to restructure. I just finished going over the Premier Exhibition Investor Day presentation slides that were posted in a SEC filing. Here are some of the highlights.

Read the rest of this entry »

The Special Situations Real Money Portfolio exceeded all my expectations in 2009. When all was said and done, the portfolio returned 50.50% in 2009! My unique special situations portfolio achieved the 50% return that Warren Buffett once said he could achieve if he managed less than $1 million.

My overall annualized rate of return since inception is 30.75%. The Special Situations Real Money Portfolio started on October 19, 2004 with just $2,000. Each year since then, I’ve added the maximum Coverdell Education Savings Account annual contribution of $2,000. The total amount I’ve invested in this account is $12,000. Given that the Special Situations Real Money Portfolio ended 2009 with a total value of $30,938.09, my total profit as of December 31, 2009 is $18,938.09. The total return since inception is 157.30%. I hope to maintain this record of performance for the next eleven year until my son starts college.

Stepping back a bit, I’d like to talk a bit about how last month went. As you might recall, the Special Situations Real Money Portfolio in November ended with a balance of $26,972.91. I made a $2,000 deposit last month. The portfolio had a balance of $30,938.09 when the market closed on December 31, 2009.  Adjusting for the deposit, the portfolio gained 6.78% in December. As of December 31, 2009, the Special Situations Real Money Portfolio held the following positions:

If you want to review all the trades of this portfolio and my special situations research, subscribe to Fat Pitch Financials Contributor’s Corner. As a premium member, you will be notified of new trades in the Special Situations Real Money Portfolio, have access in all the research used to find special situations opportunities for this portfolio, and be able to participate in the active forum composed of fellow savvy investors interested in special situation opportunities.

Disclosure: I own shares of MAXXAM (MAXX), 3Com (COMS), Sun Microsystems (JAVA), Kid Castle Educational (KDCE), Sunstone Hotel Investors (SHO), and Western Sizzlin (WEST).

The Fat Pitch Financials Portfolio performed nicely in 2009, especially given the challenging market conditions.  As of the market close on December 31, 2009, the Fat Pitch Financials Portfolio ended with a balance of $1,233,461.25.  Of that $154,312.72 was in cash and $1,079,148.53 was in stocks. Since I last reported on the Fat Pitch Financials Portfolio November closing balance, this paper portfolio was up 3.9%.

I launched this paper portfolio back in September of 2004 on Marketocracy with a virtual starting balance of $1 million and a per share value of $10. I created this paper portfolio shortly after I started the Fat Pitch Financials blog as a way my readers could track my stock picks. The objective of this portfolio is to invest in companies with wide moats that are selling for prices that provide for a significant margin of safety.

The FPF Value Port returned 42.44% versus just 26.47% for the S&P 500 in 2009. The orange line in the graph below shows how the Fat Pitch Financials Port relative to the major indexes.

Fat Pitch Financials Portfolio 2009 Performance

As you can see in the chart above, my portfolio began recovering more quickly than the market indexes after the March low. I’m hoping the Fat Pitch Financials Port will continue this trend of outperformance into 2010.

Since inception in September of 2004, the FPF Value Port produced an annualized return of 4.00% versus the 1.84% return of the S&P 500. I’m proud that I’m beating the S&P 500 by 2.15%, but I hope to increase this margin substantially over the coming years.

Fat Pitch Financials Portfolio Performance Since Inception (As of December 31, 2009)

Fat Pitch Financials Portfolio December 31, 2009

Total Value: $1,233,461.25 Cash Value: $154,312.72 Stock Value: $1,079,148.53 Shares: 100,000 Price: $12.33

Fat Pitch Financials Portfolio Style Allocation

Marketocracy also provides a style breakdown for its portfolios. According to the table above, the Fat Pitch Financials holds mostly value stocks. The 11% allocation to large cap growth stocks is attributed to my Kraft (KFT) and eBay (EBAY) positions. As far as the size of the companies held, the FPF Port is balanced between 51% allocation to large cap stocks and most of the remaining allocation split between small and micro cap stocks. I’m thinking that I should look to see if I’m missing any opportunities in mid-cap stocks.

Fat Pitch Financials Portfolio Positions by Sector and Industry

The Fat Pitch Financials portfolio holdings are predominately in consumer discretionary and information technology stocks.  These two sector categories make up 81% of the portfolio. Unfortunately, I held 10% of the portfolio in financials, but thankfully they recovered nicely at the end of 2009. My 3% position in the health care sector seems a bit scimpy, but given the changes in the health care sector given the government’s reform efforts it might actually be prudent to see how the changes shake out.

There were no new transactions in December. The only real change was the 20 to 1 reverse split that Steak N Shake (SNS) conducted. I think that reverse split was kind of silly, and it has given me some reservations regarding my Steak N Shake investment.

I look forward to 2010 and hope to continue beating the market.

Disclosure: I own shares of Western Sizzlin (WEST), Steak N Shake (SNS), Broadridge Financial Solutions (BR), Microsoft (MSFT), Western Union (WU), Kraft Foods (KFT), eBay (EBAY), Concord Camera (LENS), McGraw-Hill (MHP), Destination Maternity (DEST), Sotheby’s (BID), Pfizer (PFE), US Bancorp (USB), Wells Fargo (WFC), USG (USG), and Premier Exhibitions (PRXI).

Happy New Year! Welcome to the 174th edition of the Festival of Stocks. The Festival of Stocks is a blog carnival dedicated to highlighting the best posts on stock market related topics. Fat Pitch Financials is the actual birth place of this online weekly event, so it is always a special occasion when I get the chance to host this roving event and this week is particularly special since it is the first edition of the Festival of Stocks for 2010.

Here are this week’s entries: Read the rest of this entry »

Happy New Year! Before we dive into 2010, let’s take a look back at the top stories of 2009 at Value Investing News. The following stories received the highest ratings by the members of Value Investing News in 2009:

1. Insmed INSM Net Net Stock Analysis Valuation via oldschoolvalue.com
   Stock analysis and valuation of INSM based on benjamin graham net net formula and epv. Detailed financial statement analysis provided as well.
   Submitted by jjun0366 on Mon, 2009-11-09 05:20.
2. IBM Stock Analysis via thediv-net.com
   IBM is a major component of the S&P 500, Dow Industrials and the Dividend Achievers Indexes. IBM has been consistently increasing its dividends for 13 consecutive years. From the end of 1998 up until December 2008 this dividend growth stock has delivered a zero annual average total return to its shareholders.
   Submitted by Dividend Growth Investor on Wed, 2009-07-01 05:14.
3. Taking Stock in Coca-Cola (KO) via nurseb911.com
   An in depth fundamental stock analysis on The Coca-Cola Company discussing their business operations, margins and sustainable competitive advantage.
   Submitted by nurseb911 on Mon, 2009-01-12 07:59.
4. 2009 Forbes Best Small Companies Part 2 via oldschoolvalue.com
   Intrinsic value price targets of forbes 2009 best small companies. Part 2.
   Submitted by jjun0366 on Mon, 2009-11-16 02:25.
5. 2009 Forbes Best Small Companies Part 1 via oldschoolvalue.com
   First 10 of the 2009 Forbes Best Small Companies. I go through all 200 to find the best potential investment. Commentary and valuations included.
   Submitted by jjun0366 on Wed, 2009-11-11 04:16.
6. 3 Value Stock Ideas via oldschoolvalue.com
   Three stock ideas that are also good businesses. Find out the intrinsic value by DCF valuation and other valuation methods.
   Submitted by jjun0366 on Tue, 2009-08-04 02:32.
7. Myths about Warren Buffett via dividendgrowthinvestor.com
   Warren Buffett is the richest investor in the world. The student of the father of value investing Ben Graham, learned how to invest money in the Graham-Newman Corp. partnership in the early 1950s. After it was closed, Buffett formed his own investment management partnership.
   Submitted by Dividend Growth Investor on Thu, 2009-07-09 07:03.
8. Dividend News: A Few Increases, More Expected in July via dividendgrowthinvestor.com
   Several companies raised their distributions over the past week: Despite the slow week for dividend increases, I am looking forward to a relatively busy July, since historically some well-known dividend aristocrats like Walgreen (WAG) and Stanley Works (SWK) tend to raise their dividends during the current month.
   Submitted by Dividend Growth Investor on Tue, 2009-07-07 06:22.
9. Best Yielding Stocks for 2009 2Q Update via dividendgrowthinvestor.com
   The companies I selected were representative of four high yielding sectors- real estate,energy transportation,utilities and tobacco. Despite the high yields, the dividend payments seemed sustainable enough even during the financial meltdown. The average yield on the four stocks mentioned below is 6.88%.
   Submitted by Dividend Growth Investor on Thu, 2009-07-02 04:42.
10. Pepsi Co (PEP) Stock Analysis via thediv-net.com
    PepsiCo, Inc. manufactures, markets, and sells various snacks, carbonated and non-carbonated beverages, and foods worldwide. PepsiCo is a major component of the S&P 500, Dow Industrials and the Dividend Aristocrats Indexes. PepsiCo has been consistently increasing its dividends for 36 consecutive years.
    Submitted by Dividend Growth Investor on Thu, 2009-07-02 04:15.

You can continue reading all the top stories of 2009 by visiting the Popular story links of this year at Value Investing News page.

Welcome to the December 28, 2009 edition of the Festival of Stocks. The Festival of Stocks is a blog carnival dedicated to highlighting bloggers best posts on stock market related topics. Fat Pitch Financials is the actual birth place of this online weekly event, so it is always a special occasion when I get the chance to host this roving event.

If you aren’t already familiar with my blog, Fat Pitch Financials, it is a value investing blog with a focus on wide moat companies selling at substantial discounts and Graham style workouts. I encourage you to subscribe for free to my blog feed to keep up with my latest postings.

You should also check my Fat Pitch Financials Contributor’s Corner while you are here. It is my premium members only community dedicated to unique arbitrage and special situation opportunities.

Now that you are familiar with Fat Pitch Financials, let’s take a look at this week’s Festival of Stock participants. Here are this week’s entries:
Read the rest of this entry »

Welcome to the December 14, 2009 edition of the Festival of Stocks. The Festival of Stocks is a blog carnival dedicated to highlighting bloggers best posts on stock market related topics. Fat Pitch Financials is the actual birth place of this online weekly event, so it is always a special occasion when I get the chance to host this roving event.

If you aren’t already familiar with my blog, Fat Pitch Financials, it is a value investing blog with a focus on wide moat companies selling at substantial discounts and Graham style workouts. I encourage you to subscribe for free to my blog feed to keep up with my latest postings.

You should also check my Fat Pitch Financials Contributor’s Corner while you are here. It is my premium members only community dedicated to unique arbitrage and special situation opportunities.

Now that you are familiar with Fat Pitch Financials, let’s take a look at this week’s Festival of Stock participants. Here are this week’s entries:
Read the rest of this entry »

Here’s a quick update on my Special Situations Real Money Portfolio. The portfolio closed the end of November with a balance of $26,972.91. That’s up 2.81% from the balance I reported at the end of October for the Special Situations Real Money Portfolio.

The Special Situations Real Money Portfolio is a real Coverdell Education Savings Account I created for my son on October 19, 2004. I decided to dedicate this small tax sheltered account to special situation opportunities and Graham style stock workouts. Back in 2004, the primary focus was on going private transactions. Since then, I have also added tender offers, spinoffs, split-offs, net-nets, merger arbitrage, and some other unique event based opportunities.

The year-to-date performance for the portfolio remains a strong 45.35% return. Looking back at the portfolio’s performance since inception on October 19, 2004, the Special Situations Real Money Portfolio has produced a total return of 169.72% as of the close of business on November 30, 2009. The average annualized return since inception remains an amazing 29.24%.

The Special Situations Real Money Portfolio was involved in several transactions this past month.  On November 9th, I received 93 shares of Steak ‘n Shake (SNS) from the 200 shares of Western Sizzlin (WEST) the account held then.  I also received $0.13 in cash in lieu of fractional shares as a result of that stock dividend/spinoff.

Also on November 9th, I was cashed out of the 1,000 shares of Centennial Communications Corp. (CYCL). I received $8.50 per share in cash from AT&T (T) as expected in that merger deal.  I originally purchased those shares of Centennial Communications on October 2, 2009 for $7.90 per share. My net return on that 39 day transaction was 7.5%. The average annualized rate of return for that simple deal came to a whopping 70.2%.

Then on November 10th, I picked up another 200 shares of Western Sizzlin (WEST) at $8.68 per share. Western Sizzlin shares now represent the right to receive a callable 5 year debenture with a $8.07 face value that pays 14% interest. Even if the debenture is called after the first year, I should get a nice return on this investment.

I’ve been also looking for another split-off to invest in and I found one on November 16th. Bristol-Myers Squibb (BMY) initiated a split-off of their infant formula subsidiary, Mead Johnson Nutrition (MJN). Bristol-Myer  shareholders will roughly receive $1.11 in Mead shares for each $1 in Bristol shares they tender. I love the odds associated with these type of deals. I picked up 99 shares to avoid any proration when I tender my shares.

Finally, on November 19, 2009 I bought another merger arbitrage position in a tech company. If you are interested to learn more about this recent transaction, consider becoming a member of Fat Pitch Financials Contributors Corner. Sign up for my premium Fat Pitch Financials Contributors Corner to track my research and follow my next moves in the Special Situations Real Money Portfolio.