Terra Nova Financial (TNFG) – Investment Recap

Posted August 29th, 2011. Filed under Stock Updates

Last week marked the successful conclusion of my first liquidation investment – Terra Nova Financial (TNFG).

I originally picked up the stock back in October 2010, when the stock was trading below the lower bound of the director’s estimated liquidation range.

On August 15, the company distributed a press release announcing a final liquidation distribution of $0.103 per share payable on August 19, 2011.

This was a pleasant surprise, as TNFG’s March press release had estimated a final stub payment in the range of $0.04 – $0.07 per share.

Here are the final results of the workout:

TNFG - Liquidation Summary

Not stunning, but a nice result for my first attempt at this type of investment.

Joe Ponzio at F Wall Street summed up a good maxim for investing in workouts:

“The question is: Upon thorough analysis, do they offer safety of principal and a satisfactory return. To answer the first part, you must know the deal; to answer the last part, you must know the timeline.”

If you have followed the series of posts on TNFG, the one constant is my utter inability to predict the timing of the various payments – but I at least had a timeline and worst-case scenario in mind.

The lesson here is to always be extremely conservative when estimating the timing and return possibilities for these type of investments.

While the returns are certainly welcome, the best part about these types of opportunities is that they are largely uncorrelated with the rest of the market.

In these volatile times, I’d be very happy putting a much larger percentage of my portfolio into these types of scenarios, and will be actively searching for similar situations.

Investing as a New Career

Posted August 17th, 2011. Filed under Holdings

Many investors have heard of the adage “Sell in May and go away.”

While my style of investing doesn’t have much to do with trying to time the markets, I haven’t been very active in the investing community since May due to some changing personal circumstances.

I certainly haven’t sold out however, and therefore have maintained most of my positions during this volatile time period, but I’m looking forward to getting back into the swing of things with investing and writing.

A New Career Path

Starting off on a more personal note, I’m excited to announce that I’m returning to school for my MBA.

After much planning, I started classes this past week at the University of North Carolina – Kenan-Flagler Business School in their full-time program, with the intention of pursuing a concentration in investment management.

I received admission to other top schools, but felt it was best to stay in North Carolina (and the combination of in-state tuition plus a substantial scholarship certainly helped sway the decision!).

UNC is a top-notch program with opportunities to participate in investment-related case competitions, manage a student-run investment portfolio, and access a specially designed Capital Markets Lab with Bloomberg terminals, Capital IQ, FactSet, etc.

I’m very excited about this new path, and am looking forward to turning my passion for investing into a full-time career.

I plan to explore the various career paths in investment management, but would like to stay focused within the value investing community, with the goal of landing a summer internship (and eventual equity analyst role) at a value-oriented firm.

I’d love to work for one of the well-known (and obviously highly selective) value funds like Greenlight or Baupost, but am also exploring other avenues like Vanguard, the Royce Funds, the large banks, etc.

It’s amazing, but company presentations for summer internships start in September (!!), so networking will be a key focus during the fall semester.

I’d love to branch out and discuss additional aspects of working in the equity research / hedge fund / investing field, so drop me a line if you’d like to talk about the industry.

YTD Results

Value Uncovered Portfolio - Q2 2011 Update

A bit late to be commenting on results for Q2, especially since my portfolio has slid along with the rest of the market, but I think it’s still a useful exercise.

Two of my largest holdings, APNC and IBAL, have more than doubled from my initial buy price, contributing to a large portion of the gains through the end of the second quarter.

I have taken advantage of the market sell-off to add to existing positions that I have covered before – namely AMCON Distributing (DIT) and Sparton Corp (SPA).

For additional perspective, check out this nice write-up on DIT as it reaffirms much of my original investment thesis.

Looking Forward

I’ll be tweaking the portfolio in the near-term, as I’d like to free up some cash by selling out of some old positions.
In this type of market, having cash on the sidelines is a huge advantage.