Special Situations Real Money Port November 2007

November was a slow month for the Special Situations Real Money Portfolio. There were no new transactions in November. I’m just waiting for one going private transaction to come to completion, which should happen this month.

The Special Situations Real Money Port closed the day on November 30, 2007, with a balance of $13,174.68.  This is up $181.57 since October.  Year-to-date return is 38.25% and total return since inception is 64.68%.  My internal rate of return for this portfolio is now 25.07%.

Western Sizzlin (WSZL), one of my portfolio’s holdings, is starting to make its move on Steak n Shake (SNS). My other position, Sallie Beauty Holdings (SBH) has had a very volatile stock price this month. Shares of Sallie Beauty Holdings traded down below $8 per share during the month. I probably should have picked up additional shares at that point, since I knew that that price was just too low. Sallie Beauty reported its forth quarter earnings last week and shares rallied back above $9 to close the month at $9.11. I’m starting to read through the 10-K, but I haven’t finished analyzing it yet. I’ll probably have more to say about Sallie Beauty’s 10-K shortly.

Hopefully, some new special situation opportunities start appearing soon. The turmoil in the credit markets has really put a damper on tender offers.  There are still a few going private transactions in process but many of them don’t provide great opportunities. Until things return to normal, it is a good opportunity for me to explore new types of special situation opportunities and to focus on value opportunities for the Fat Pitch Financials Portfolio.

2 thoughts on “Special Situations Real Money Port November 2007

  • December 3, 2007 at 9:33 pm

    I own a bit of Sally Beauty and it seems to be firing on all cylinders. In particular, I see some real gains in margin and inventory management. It seems to have survived the loss of L’Oreal products in the BSG stores without too much impact on overall sales. Massive debt stands as the biggest concern, but one that ought to be well known.

    I’m looking forward to hearing what you find with a bit more examination of the 10-K.

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