Investment Opportunity 1 – I Have to Buy More
I started the Ultimate Value Finder Newsletter in January 2012. Since then, I released 21 issues each containing 3 investment opportunities. Consequently, in total, I have written about 63 investment opportunities. If I were to announce the best investment idea winner, it would be this company. Obviously, I own it but every time I look at it, I cannot believe that such a great opportunity exists. Next week, I will be buying more shares because I cannot own enough shares of it.
This company is a drilling contractor with an extremely high quality balance sheet, profitable operations, and growing business segments. No, it is not a mining company. However, because one of its business divisions drills for precious metals mining companies, the market is pricing the entire company as if it was going bankrupt. In other words, this is a profitable and growing company being sold at bankruptcy prices. I keep accumulating shares because I am convinced that five years from now, whatever I invest today will be worth 10 times more.
Investment Opportunity 2 – Execute, Execute, Execute
Investment Opportunity 2 is a company that grew from nothing to $250 million in revenues. For many years, investors saw significant increases in revenues. However, in 2011 and 2012, that growth slowed significantly while the costs continued to increase as if the revenue growth was going to continue. This put phenomenal pressure on margins causing profitability to evaporate during the time that debt was coming due. The result was that the stock price collapsed 90 percent. To deal with the operational issues, the management took drastic steps to rightsize the company to stop the bleeding and prepare it for future growth.
At this point, the investment thesis is not about rightsizing the company but about growing it with a smaller cost structure. If the management is able to deliver on its promises, investors will benefit.
Investment Opportunity 3 – A Special Situation Investment Opportunity
Warren Buffett said to be fearful when others are greedy and be greedy when others are fearful. From my point of view, when a lot of investors are fearful, it is easy to find a lot of investment opportunities. However, the problem is that right now, investors are not fearful. They think everything is wonderful. Consequently, I am having a very hard time coming up with new investment opportunities that make me excited. In situations like this, I like to look back at investment opportunities that I wrote about in the past to see if anything changed. And, oh boy, did something change with Investment Opportunity 3!
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