Weekend Values – October 10, 2010

Posted October 10th, 2010. Filed under Investing Links

As usual, here are a few value investing ideas from the past few weeks:

Mass Financial Corp (MFCAF.PK)

MFCAF is backed up the reclusive and somewhat oddball investor, Michael Smith, who has a record of growing shareholder value with obscure companies (Smith is also in charge of another recent value idea, KHDHF.PK, featured back in August).

MFCAF has grown book value at an incredible rate since its spin-off from KHD in 2006 – going from zero to $2.43 by the end of 2006, then to $4.39 in 2007 and $5.71 in 2008. As of December 2009, book value was at $9.72.

The company recent announced a one-for-one stock merger with TTT, another company chaired by Michael Smith. It is a complicated investment that deserves additional due diligence.

Reading International (RDI)

A good interview over at SeekingAlpha with Andrew Shapiro, founder of Lawndale Capital Management, on Reading International (RDI).

Reading International is an underfollowed company that owns movie theaters throughout Australia, New Zealand, and the US.

Unlike other theater operators, Reading usually owns the majority of its real estate properties. Reading has 16.5MM sq ft of real estate and only 1.2MM is currently developed, leaving 15.3MM sq ft available.

A big potential catalyst is Reading’s huge undeveloped parcel outside of Melbourne, Australia. At 51-acres, it is one of the last undeveloped parcels near the central business district and a potential sale should bring immediate windfalls to common shareholders.

A contrarian play with significant undervalued real estate holdings offers great potential for value investors (see my post on JCTCF for another example).

Premier Exhibitions (PRXI)

A stock that has been discussed frequently on twitter and beyond (as well as other value investors here and here), a judge recently ruled that PRXI legally owned the $110m in artifacts it recovered from the wreck of the Titanic.

With a market-cap of only $85m, the stock trades at a discount to the value of its assets. However, despite the possible value in liquidation, it looks like the company intends to display the artifacts (a money-losing business over the past several years).

In addition, some turmoil in the management ranks makes for some concern over the future of the company, but regardless, it is a play to certainly keep an eye on.

Sun Healthcare Group (SUNH)

Continuing the theme of potential value unlocked in real estate, ValueHuntr has another well put together presentation from a guest poster on Sun Healthcare Group (SUNH).

Sun Healthcare is a leading skilled-nursing services provider that is currently splitting into two business segments: the operating company and a REIT.

The industry looks attractive, as the elderly population continues to increase while the number of care facilities continues to decline.

In addition, SUNH benefits from substantial tax loss carryforwards, an experienced management team, and appears undervalued on a comparable and sum-of-parts basis.


No positions.

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