The Special Situations Real Money Portfolio held up pretty well this month. I recently received cash from one of the going private transactions I invested in back in October of last year.
I invested in Harold’s Stores (HRLS) back on October 23, 2007. Harold’s had announced that they were going to take the company private by conducting a reverse split where 1,000 shares would become one share. Holders of less than 1,000 shares would receive $0.30 per share. I was able to buy 999 shares of Harold’s for $0.13 per share. Shareholders approved the deal on December 7, 2007. Then the reverse split occurred on January 9, 2008 and the stock symbol changed to HRLS. A few short weeks later, I received $299.70 in cash on January 28th. I netted $162.88 or a 119% return. That’s an amazing 488% average annualized rate of return for an investment that took just over 3 months to complete. I know that this is still a tiny investment, but these deals are a perfect way to turbo charge a small portfolio.
I also invested in a company this month that is planning to conduct a split off. This company was trading so cheaply that I decided to buy it early. However, I probably bought it too earlier. Mr. Market has been so depressed that the price of these shares has been driven even lower.
The Special Situations Real Money Portfolio ended the month with a balance of $15,547.14, $2,000 of which was from my new contribution of cash I made in January. Adjusting for that new $2,000, my portfolio was down 2.53% for the month. However, my internal rate of return is still at 24.6% since inception and my total return is 55.47%. The portfolio currently holds $5,183.71 in cash. I’ll be looking to put that cash to work in February. If you want to follow my research, consider subscribing to the Fat Pitch Financials Contributor’s Corner. Contributor’s Corner is the premium portion of the Fat Pitch Financials site that includes my exclusive current going private transaction list, odd lot tender offers, and much more.