Portfolio update: BBX, TPCA, RAD and GLAE

Yes, I’ve been somewhat lax in updating my blog portfolio. The summer doldrums are here; with heat above 100 degrees my brain functions at half speed at best.

Last month I sold out my position in BBX Capital. I hadn’t really been following the vicissitudes of the company closely, but with the dismissal of the SEC charges against the former chairman and his return to the company once again as Chairman of the Board coupled with the declining share price over the previous 6 months I thought it time to take the money and run. I hung in there a bit to see if the NYSE listing would provide any renewed updraft in the share price, but it didn’t. I don’t like investing in companies where executives are even accused of wrongdoing (given the reticence of the SEC to go after ANY corporate executives I immediately assume that where there’s smoke there’s FIRE!). When I first invested in BBXT it was trading at less than half book value and the former Chairman (Levan) was ‘on sabbatical’. The shares are now trading over book value and he’s back in place… no need to say more. More than a 100% return, though I left money on the table by not being more attentive and selling out earlier.

The Tropicana Entertainment dutch tender terminated on 8/19. I tendered all my shares at the maximum, $45/share. Less than half the outstanding shares were tendered, meaning that the final price was the top end of the tender range and that a good number of investors thought the offer was too low. Knowing Icahn, it probably was! But for me a 45% return in less than 6 months was something I could live with, and to my mind there was more than some uncertainty as to the exit strategy and timing for those that continue to hold.

I have increased my positions in Rite Aid and Glassbridge. Selling in the wake of the 11th hour Rite Aid/Walgreen Boots deal change has sent the shares in Rite Aid down over 50%. I think this is a huge over-reaction. The company that Walgreens was willing to pay over $8/share for 24 months ago is now selling for 30% of that. Rite Aid is now a ‘disappointment’ stock and, to my mind, will bump along at current levels until a) the new slimmed down operations produces improved operating results or b) another company comes along and bids on the remaining Rite Aid (Amazon?). I plan to increase my position further if the shares continue to weaken.

Glassbridge delisted from the NYSE at the beginning of August.  There was a considerable spike in volume just before and after the delisting. I assume this was probably because some institutional holders didn’t want to or couldn’t hold the OTC shares, and that these ‘forced sellers’ have temporarily depressed the share price. In consequence I doubled my holdings at about $1.90/share. Insiders bought in June/July at more than $3.00/share, which would seem to corroborate my theory. The shares are still highly speculative and I’ll be closely watching the 2nd Quarter results which will be announced shortly.