More about this stock:
I look at it more like investing in a Private Equity firm (with a great track record), that invests in companies, turns it around and sell out of it, only to find out what next.
Example: Bought a bankrupt Stratosphere Casino in Vegas and sold it for $1.2B. Bought National Energy Group, TransTexas Gas, Panaco, and other properties for $625M, turned around and sold it for $1.6B in 18 months. These examples are enough to suggest the management is capable of turning around the companies pretty swiftly for 2-3-4 times the value they bought it for, which is impressive by any standards.
Currently, it owns Tropicana entertainment, Federal Mogul (fantastic company), American Railcar etc. Every company is at a different stage of restructuring and would possibly give similar returns.
Personal interest in the firm is in the tune of 93% (more then substantial) to suggest that the owner would not take super risky bets yet. But on the flip side once the stock starts to inch up, Ichan is smart enough to start making some stock deals and use stock as a currency which would be interesting to see (which makes me more bullish on the stock).
Feels like not a lot of downside given the business it owns and track record management has had. One can safely assume 15-20% returns in next 6 months to 1 year.
Happy Investing!!
Great pick and you are absolutely right with his style of investing. He has a good win/loss ratio of picks. Sometimes he has his share of losers, but he makes it up with big wins. Thanks for sharing.
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