CIM:
10/28/2010
Current price: $4.03
Current book: $3.29
Latest offering (8/2010): $3.56
NLY:
10/28/2010
Current price:$17.41
Current book:$15.62
Latest offering (8/2010): net $16.67
RWT:
10/28/2010
Current price:$14.09
Current book:$12.71 (June 2010)
Grant recommended at $14.52
PDLI -
Bought 500 at $5.14 - 10/04/2010
http://www.grantspub.com/UserFiles/File/giro27_S-Break.pdf
Vodafone
Bought 200 @ 19.85
$21.66 - Jun 25, 2010 (Grants - "Mobile payout")
GBP 1.38 / share - January 19, 2010, Greenlight capital letter
Comes to about $22.53 / share
FNF - Fidelity National Financial
Bought: 200 at 14.67 on 10/01/2010
Bought: 200 at 13.37 on 10/21/2010
July 03, 2008 - (13.18) - http://www.pbs.org/nbr/site/onair/transcripts/080703d/
July 02, 2009 - (13.18) - http://www.pbs.org/nbr/site/onair/transcripts/james_grant_090702/
October 27, 2009 - (14.63) - "Grant's second pick was Fidelity National Financial (FNF), an insurance company. He is not wagering on an increase in house prices here, but rather an increase in the number of transactions. Grant notes that the title insurance business is essentially an oligopoly and is controlled by 4 players where FNF controls 46%"
End-of-year 2009: Book Value = $14.53
June 30, 2010: Book Value = $14.98
September 2010: Book Vaue = $15.25
September 2010: Book Vaue = $15.25
RWT - Redwood Trust
Bought 200 @ 14.62
Redwood Trust, RWT. It's a mortgage real estate investment trust. It invests in typically non-agency jumbo mortgages, that is to say mortgages on bigger properties not backed by Fannie and Freddie. It buys them mainly with equity. It steers clear of what they call leverage on Wall Street. It yields a little less than 7 percent. It's priced to move (ph) less than 1.3 times book value means it's pretty cheap. What is I think especially interesting about Redwood is that it's holding a lot of cash. It I think is opportunistic and it is waiting for new supply that is likely to be coming from downgrades by Moody's and others.
James Grant's recommendation December 24, 2009 (14.48):
National Home prices
Peak to Trough:
The U.S. median home price tumbled 29 percent over three and a half years as defaults among subprime borrowers flooded the housing market with cheaply priced foreclosures and Wall Street piled up $1.78 trillion in losses and asset writedowns.
The median prices of an existing U.S. home peaked at $230,300 in July of 2006 and hit a low of $164,600 in February 2010, according to NAR data. The drop was 13 percent in 2009, outpacing 2008’s 9.5 percent decline.
The median price of a single-family home in the New York metropolitan area rose 1.8 percent to $380,400 in the three months ended March 31, 2010. The areas surrounding New Haven and Milford, Connecticut, gained 5.3 percent to $227,900.
The Edison, New Jersey, region had a 1.5 percent gain in the median price; and Hartford, Connecticut, posted a 1.6 percent increase to $225,900. Prices in the Boston metropolitan area increased 11 percent to $321,800.
Hersha Offering
Hersha Hospitality Trust (NYSE: HT) announced the pricing of its public offering of 24,000,000 common shares of beneficial interest, par value $0.01 per share, at a price of $4.25 per share.
UTS Energy corporation
Recommended in Grant's IRO (September 18, 2009 issue) at C$ 1.79 (Brent at USD$ 70.72)
Bought: 200 at C$ 2.31 on January 13, 2010 (Brent at USD$ 80.32)
Target: C$ 4.80
UTS, based on Cash + Earn-ins + Developments at cost = C$ 3.40
UTS’ Cash & Remaining Earn-ins = C$ 2.40
EV, based on recent transactions = C$ 4.80
(at least C$ 0.63 / recoverable barrel)
See Jan 2010 presentation
Check daily oil prices:
(Clicks "Spot prices" and then "Download Series History")
From Grant's:
...Total E&P Canada launched unsolicited bid for UTS earlier in 2009. UTS board presented six comparable transactions that had occurred between 2005 and 2008 at prices ranging between C$0.47 and C$1.62 of enterprise value per barrel of recoverable resource. Total’s bid, said the board, represented C$0.18 of enterprise value per barrel excluding UTS’ remaining earn-in. Including that earn-in, the value of the Total bid was minus C$0.25 per barrel. On September 1, PetroChina invested C$1.9 billion in Athabasca Oil Sands Corp. for a 60% stake in Athabasca’s Dover and MacKay river projects. The price was equivalent to 63 Canadian cents per barrel. On September 10, the FT reported that China National Petroleum, the parent of PetroChina, had increased its acquisitions war chest with a $30 billion loan from a state-owned bank. “Using PetroChina’s price per barrel of 63 cents would value UTS’ best reserves at C$1.47 billion (0.63*2,334 million barrels),” Gertner points out. “Add C$255 million in cash and C$700 million remaining on the aforementioned earn-in and subtract total liabilities of C$111 million. By this method, UTS would have a value of C$2.3 billion, or C$4.88 a share.”
Technical notes on HFT orders
To facilitate HFT trading and rebate strategies exchanges/ECNs introduced order types that allow to send limit orders that will:
- be posted only (order will not take liquidity against resting orders)
- can be temporarily hidden in order to comply with RegNMS but will light up asap (this helps to get to the top of the queue without resorting to bombarding exchange with new orders at the time quote moves)
Following is description of the functionality offered by major market centers in this area.
BATS:
To send limit order that will potentially lock NBBO, but will be posted at submitted price and will light up as soon as possible (based on 04/20/2009 conversation with BATS trading desk):
- set RoutingInst (9303) = P (BATS Only Post Only)
- do not set 9479 (DisplayIndicator)
Order will reject rather then remove liquidity if there is something on the other side.
So this order should be sent in the following scenario: Market is one cent wide and is about to tick down. BATS bid fades. If we want to be at the top of the queue on the offer on the new quote, we would send this order with new offer. The order will be booked, but will not display until other markets fade the old bid.
DIRECT EDGE
In Direct Edge terminology there is "Hide-Not-Slide" order that is used in the fashion similar to "BATS Only Post Only". If on entry order locks other market it will be booked at the entry price, but will be hidden to comply with RegNMS. As soon as price level is free, order will light up.
Hide Not Slide:
If, upon entry, a Hide Not Slide order is locking or crossing the NBBO, it will be ranked at the locking price and displayed 1 tick worse than the contra quote. This order retains its book priority until filled, cancelled or expired. Alternative posting options to Hide Not Slide are: Price Adjust (new book priority), Single Re-Price, or Cancel
API details (http://www.directedge.com/Portals/0/docs/api_portal.pdf):
- Tag 9215 (LiqProvOnly) Liquidity Provider Flag = Y (Add Liquidity only)
- Tag 18 (ExecInst) = h (Hide Not Slide); if locking or crossing the NBBO, order will be adjusted to post as follows: Hidden orders will be booked at the locking price. Displayed orders will be displayed at a compliant price (1 tick worse than the NBBO) and also be booked as hidden at the locking price.
ARCA
Arca has a PNP Blind (Post-no-preference Blind) order type to support posting functionality. This is supported on both FIX and ArcaDirect interfaces. ArcaDirect offers faster order entry interface with more consistent latency (better holds at peak times).
The PNP-Blind orders is similar to Hide-Not-Slide (Direct Edge) and Bats-only-Post-only (Bats) order types.
The order should be designated as follows:
- Extended Execution Instructions field = 'A' (Add liquidity only)
- ExtendedPNP = 'B' (Extended PNP Blind)
Definition of the "Post No Preference Blind" (PNP B) Order:
Marketable Contra Orders will first execute against the PNP B Orders, then the rest of the book. PNP B Orders will be ranked in time priority regardless of the price of the order when they are
blind. When the PBBO moves away from the price of the PNP B but the prices continue to overlap; the PNP B will remain blind but adjust its price to the PBBO. When the PBBO moves away from the price of the PNP B and there is no longer price overlap, the PNP lights up and becomes a regular limit order including standing its ground.
NASDAQ
Nasdaq OUCH supports "Post Only" orders but does not support order type that will hold order at entry price and will temporary hide order to comply with RegNMS, automatically lighting it up when price level frees up. See Nasdaq OUCH analysis for details.
To submit the order specify: Display = "P" (Post Only)
Labels:
ARCA,
BATS,
Direct Edge,
HFT,
Nasdaq
Nasdaq Ouch Specification - what do we learn
To accommodate HFT Nasdaq offers faster binary protocol: OUCH v4.
It is explicitly announced that OUCH is a limited-functionality fast order entry protocol. As such it is important to analyze supported functionality as every supported order type, message field, flow is there for a reason and can offer insight into what is used by HFT firms.
OUCH has limited support for different order types. It seems does not support pegged orders, iceberg orders, etc. On the other hand it supports Post-only orders, completely hidden orders. Assuming supported functionality is driven by needs of market makers and HFT ("new market makers"). Conclusion can be drawn as to the order types used by these firms, and it can be argued that pegged orders, iceberg orders, etc. are mainly buy-side trading tools, not HFT tools.
Another supported aspect is time in force. What is interesting is the way it is supported. Instead of traditional enum (IOC/DAY/GTC), one should specify number of seconds the order should be live before it is automatically canceled (special values provide support for IOC/Market Hours/System Hours designations). This will allow for example, for behavior when one flashes an order trying to trigger other market participants to join/adjust their quotes, without any real intention to trade at the flashed price.
Minimum acceptable quantity is supported for IOCs (as a special field on the new order message). What are the scenarios this can be used in?
Implicitly message sizes give out some information too: although it does not seem that all messages are designed with particular attention to minimize the size of the message, cancel order message is very small if compared to other messages (replace can be much smaller, but is not). In fact to send a cancel on an order it is sufficient to just set order token on a buffer prepared earlier and send it out. The whole message is just 19 bytes.
Note: order type is specified in "Display" field, with one char. It can be either "Post-only" or "Non-display", etc. (so it cannot be Post-only, non-display).
"Annonymous-Price to Comply" is the default type of order to use (if not Post-Only, not Hidden).
10Gig Fiber connection in data center is the fastest way to connect. Observed improvement is 16-22 microseconds on message turn-around (vs. 1 Gig).
Peak message rates comfortably supported on 1Gig connection are 2000 IN / 2500 OUT.
Post only functionality
OUCH supports "Post-Only" orders, but OUCH does not support order type similar to "Hide-not-Slide". One can send Post-Only, but it will be re-priced according to NBBO. FIX can be used to automatically slide, but there is no "Post-Only" designation in FIX, so one will potentially interact with hidden liquidity and pay fees and will also be on slower interface, if FIX is used. Possible solution is to detect when Post-only order is adjusted and if still convinced, cancel and re-submit at the intended price.
Corridor Resources
Purchased 200 at C$4.66
Purchased 100 at C$4.43
Target based on value of gas resources: C$11.33
Beacon Securities NAV = C$6.52
Sprott analysis in Value Investor Insight (Analysis ref price = C$3.28)
What’s exceptional about Corridor is the potential amount of gas sitting in the company’s shales. An independent energy research firm recently came out with a report estimating there was on the order of 50 trillion cubic feet of resource there. Our rule of thumb is that 1000 cubic feet of gas in the ground should be worth around C$1 in market value. So if over time Corridor can prove out reserves of one trillion cubic feet, that should be worth C$1 billion in the market. Against a market cap of just under C$300 million, that would produce more than a threebagger.
Even without that, the shares based on current metrics are inexpensive. Assuming $6 per-million-BTU natural gas, on about $50 million in revenue we estimate the company can earn cash flow per share of around C$0.45 in 2010.
Labels:
CDH,
Corridor Resources,
Natural Gas,
Sprott
Borders Group
Purchased (12/14/2009): 400 at $1.29
Target: $4.00
See Ackman letter (Q1 2009 - pub June 2009)
From Whitney Tilson Letter (12/2009):
Speaking of sub-$100 million market cap retailers, we have recently been buying Borders Group, a stock we’ve had a very up and down experience with over the years. Initially it was a disaster, falling well below $1 earlier this year, at which point we bought quite a bit more and were quickly rewarded, as it rose dramatically in less than five months to $4.34. We sold most of our position, but are now getting another bite at this apple as the stock has tumbled anew (it closed yesterday at $1.29).
This is a tough business and the odds appear stacked against Borders in light of threats from Barnes & Noble, Amazon.com, and discounters like Wal-Mart. That said, we like the current management and believe that Borders can succeed.
At today’s price, Borders has a market cap of a mere $77 million, a tiny fraction of annual revenues, which exceed $3 billion. We view this stock as a mispriced option: the company could go bankrupt and wipe out our investment, but if it merely survives – which is likely, we believe – the stock should rise many-fold.
Labels:
Ackman,
BGP,
Borders,
Whitney Tilson
dELiA*s
Purchased: 400 at 1.71
Target exit: 4.50
From Whitney Tilson letter (12/09/2009):
dELiA*s recently reported a mildly disappointing third quarter and gave conservative guidance for the critical fourth quarter, which triggered a sell-off of the stock. Since the company doesn’t communicate with Wall Street as frequently as most retailers and doesn’t report monthly comps, the stock is often volatile around its earnings releases.
Netting out the projected year-end cash balance of $1.50 per share, the core retail business is today essentially being valued at zero. We believe that dELiA*s business is worth at least $3 per share (plus an additional $1.50/share in cash), and would expect this value to be recognized over the next year as the company turns the corner to profitability. In the meantime, we are comfortable that the cash balance makes a further stock price decline unlikely. In addition, based on recent transactions, we have little doubt that the company could be easily sold for at least double its current share price of $1.68, but we actually hope the company remains independent because we believe there’s far more upside if management executes on its growth plan.
While dELiA*s has not yet been a profitable investment, it represents today exactly what we like in a stock: a low probability of permanent loss of capital and a good chance of making multiples of our money.
Labels:
dELiA*s,
DLIA,
Whitney Tilson
Longleaf Partners - Q3 2009
Some position discussions (http://www.longleafpartners.com/pdfs/09_q3.pdf):
- Japan Petroleum. Japex also declined and sells at a discount to the value of its public stake in INPEX with no credit given for the company’s oil and gas assets.
- NipponKoa. For the year NipponKoa has declined 16%. NipponKoa appreciated in the third quarter, but has been the largest detractor from 2009 performance. The proposed merger with Sompo will be voted on in December, and Southeastern has been explicit with management regarding the terms we must see in order to support the marriage. We believe the company needs our votes for the merger to occur. If the joint company is structured as we advocate, a unique company will be created, and we should reap handsome returns. If the merger fails, shareholders have alternative options for closing the large gap between NipponKoa’s price and its intrinsic value.
Hersha Hospitality Trust
January 11, 2009 - Offering of common shares announced.
Stock pegs at 3.42 (down from 3.65), probably this is a market's estimate of where offering ends up.
Hersha Theoretial Valuation - 12/01/2009 presentation
Galway Resources
Galway Resources is a mining company with several sizeable assets in different stages of exploration and development. The Company holds a significant land package in Colombia's California Gold Trend. The properties are located 1.1 kilometres south-west of Ventana's La Bodega project, and 3.0 kilometers from Greystar's Angostura project, and are along strike. Xstrata's Colombian coal subsidiary Prodeco, recently signed an agreement with Galway whereby they will fund the all drilling at the GALCA coal project. Drilling is expected to begin in October 2009
Galway picked up the gold property south of Ventana Gold Corp. (TSX:VEN). Ventana's been one of the hottest gold stocks around and that's brought a lot of attention to Galway
Rogers on gold and commodities
Labels:
coffee,
commodities,
cotton,
Rogers,
silver
Market Vectors Junior Gold Miners Index (MVGDXJ) Constituents
| Company Name | Ticker Symbol | ETF % | Company Website | |
| 1 | Alamos Gold Inc. | AGI.TO | 5.11% | |
| 2 | Allied Nevada Gold Corp. | ANV.A | 2.22% | |
| 3 | Andean Resources Ltd. | AND.TO | 2.99% | |
| 4 | Aurizon Mines Ltd. | (AZK) ARZ.TO | 3.52% | |
| 5 | Avoca Resources Ltd. | AVO.AX | 2.06% | |
| 6 | Avocet Mining PLC. | AVM.L | 0.88% | |
| 7 | Coeur d’Alene Mines Corp. | (CDE) CDM.TO | 6.20% | |
| 8 | Colossus Minerals Inc. | CSI.TO | 0.89% | |
| 9 | Detour Gold Corp. | DGC.TO | 1.38% | www.detourgold.com |
| 10 | Dominion Mining Ltd. | DOM.AX | 1.33% | |
| 11 | European Goldfields Ltd. | EGU.TO | 2.13% | |
| 12 | Fronteer Develop. Group Inc. | (FRG) FRG.TO | 2.37% | |
| 13 | Gabriel Resources Ltd. | GBU.TO | 1.55% | |
| 14 | Gammon Gold Inc. | (GRS) GAM.TO | 4.32% | |
| 15 | Gold Wheaton Gold Corp. | GLW.V | 1.07% | |
| 16 | Golden Star Resources Ltd. | (GSS) GSC.TO | 3.31% | |
| 17 | Great Basin Gold Ltd. | (GBG) GBG.TO | 2.54% | |
| 18 | Hecla Mining Co. | (HL) | 3.80% | |
| 19 | Jaguar Mining Inc. | JAG.TO | 3.67% | |
| 20 | Kingsgate Consolidated Ltd. | KCN.AX | 2.96% | |
| 21 | Kirkland Lake Gold Inc. | KSI.TO | 2.41% | |
| 22 | Lake Shore Gold Corp. | LSG.TO | 1.78% | |
| 23 | Medusa Mining Ltd. | MML.AX | 1.22% | |
| 24 | Lingbao Gold Co Ltd. | 3330.HK | 0.52% | |
| 25 | Minefinders Corp Ltd. | (MFN) MFL.TO | 2.79% | |
| 26 | New Gold Inc. | (NGD) NGD.TO | 6.13% | |
| 27 | Northgate Minerals Corp. | (NXG) NXG.TO | 3.11% | |
| 28 | Novagold Resources Inc. | (NG) NG.TO | 2.74% | |
| 29 | Real Gold Mining Ltd. | 0246.HK | 0.80% | |
| 30 | Romarco Minerals Inc. | R.V | 1.69% | |
| 31 | Rubicon Minerals Corp. | (RBY) RMX.TO | 2.17% | |
| 32 | San Gold Corp. | SGR.V | 3.73% | |
| 33 | Semafo Inc. | SMF.TO | 2.71% | |
| 34 | Silver Standard Resources Inc. | (SSRI) SSO.TO | 6.70% | |
| 35 | SilverCorp Metals Inc. | (SVM) SVM.TO | 3.10% | |
| 36 | St Barbara Ltd. | SBM.AX | 1.60% | |
| 37 | US Gold Corp. | (UXG) UXG.TO | 1.24% | |
| 38 | Ventana Gold Corp. | VEN.TO | 1.21% |
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