Mecom Group – $MEC.L

Mecom Group is a newspaper publisher I’ve been looking at over the last couple of days. It is an interesting special situation which looks appealing. A cash offer has been made for the shares at 155p and the shares currently trade at 140p. The takeover has already been approved by shareholders, but the deal has been delayed while a regulator conducts an investigation into whether it will impede competition. Their preliminary findings were that it does which is why the market is pricing in a big discount.

Regardless of whether the takeover happens, the company currently trades at an EV/EBITDA (adjusted) of just 2.5 and will surely be an acquisition target for other companies if this deal falls through. If the takeover fails you will be left holding a cheap company and can probably buy more shares even cheaper after it is announced. Alternatively if it happens you’ll net an 11% gain, probably in around 2-3 months.

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Bouvet Thesis – $BOUVET.OL

One of my most successful investments over the last couple of years was in Kentz, which was a typical Buffett buy and hold forever type stock. Kentz operates in the oil and gas industry, offering engineering and construction services with high returns on capital. I bought it at a time when the oil & gas industry wasn’t doing too well and it was around a P/E of 13, but Kentz went from strength to strength and netted me a 134% gain in just over a year. If they hadn’t been taken over I would still hold them.

But moving onto Bouvet, this is a Norwegian IT consultant and bears some similarities to Kentz.

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Independence Options Play

This week is all about independence in the UK. Scotland votes on Thursday over whether it wants to become an independent country or not. Both sides of the campaign have been releasing “information” [read: propaganda] about what independence means for Scotland and also the UK. Leaving aside my personal views on the politics, I believe that independence will be incredibly damaging economically to Scotland in the short term and that will have knock on effects for the UK and hence my portfolio. I believe that the ‘Yes’ campaign is deceiving a lot of people, blinding them to the harsh reality that independence will bring. I have no objection to independence, I just think people should know what they are voting for. Here are my random thoughts on the consequences and how to profit from any market turmoil via options.

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Rise of the Indexers

One of Warren Buffett’s favorite bits of advice to the average person is for them to invest a dollar amount each month into a passive index tracker fund. The wisdom behind it is simple – the average mutual fund manager under-performs the index and the average person can’t separate the great managers from the poor. The advice seems to have finally sunk in, the proportion of assets in passive funds has almost doubled in the last 10 years and now stands at 21% in the USA. That is projected to keep rocketing over the next 10 years.

But it is becoming obvious to me, that this liberation of the people from the oppression of greedy fund managers is coming at a cost – to shareholder power and activism.

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Trawling AIM

The AIM market is one of the few places bargains exist today, because it is mainly small individual investors that trade on it. The problem is finding stocks, screeners don’t include AIM and there is limited info about the companies. So I put together a spreadsheet that trawls the internet for basic valuation ratios on all AIM companies to allow investors to hopefully find the best bargains.

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