Michaels Stores.(MIK).. LBO at 44 bucks

2 buck discount.

stock trading at 42..

the deal probably needs till year end to close. given lbo financing needed.

so looking I guess at a 5% er over 6 months.

annualizing 10%.. ok deal.

some returns but then again is part of arbitrage which could fall apart.

a small allocation might be justifiable. a big one never.

i mean i prefer keeping the money in icocz or other preferreds, whether they are paying or not. .icocz is a very nice one by the way..

there are other prefs i might ûpdate on in the near future..

Mc Rae Industries (MRINA or MRINB)

since i frequently miss to update my blog, here is one to complete the current series..

mc rae. i got forced to do more research on this when ameritade mishandled the cash out of minority shareholders in conjunction with a reverse split around year end 2005.

lots of small shareholders got stuck with unwanted paper. the stock which in the squeeze out had a take out value of 14.25 per shares quickly plummeted to 9.50.. i managed to mabz maybe some 50,000 bucks of the paper at prices from 11 all the way down to 9ish ranges. it looked like a safe bet given the panick selling.

since then mc rae has done just fine. and i am not referring to the stock price which sits now at 12.50..

speaking more operatinally here. the companz has reported 2 financial quarters. possting like 1.00 or so in eps for the half year. very nice results. the book value per share has since been boosted .. i think it is north of 14 bucks now. if i recall intrinsic value.. NAV is more like 17 because of real estate that is hidden on their books.

a safe bet for long term holders and comes with a nice dividend too. .

the panick selling is definitely over.

the panick buying has not yet started.

think this thing will be above 14 bucks by year end. and since it is a long term holding i dont care about selling here. no redeployment needs for cash anyway.

just figured, that here is a nice family controlled company that generates wads of cash.

nothing wrong with owning such a business for the long term.

so may you..

over and out. Z

Mestek (MCC).. time to sell

at least for me personally who was just looking at this as an arbitrage trade.

got more profits than what i bargained for. so what can i complain about.

the deal called for 15.24 for those owning less than 2000 shares. was going through shortly, and not the market bid this up last friday till 16.60 on large volume.. block trade before close of market.

the guys who changed the shares sure had some long term strategy in mind. and mcc is not a bad company for the long term. but then again there are better ones out there with perhaps more undevalued assets.

i always found the idea of these clawback rights attractive, but would anyone pay a premium of 1 dollar for these rights, right now?..

i decided to sell for the time being.. exited my accounts on this taking some 20 k in profits. more or less. i may be leaving some money on the table here but i simple dont know enough of the strategic-deal value of this business to be hanging on as a long term holder. so i,m out..