SVU up 14% today!And this is what my Guru said today;"Through this deal, Cerberus will acquire the most desirable grocery store banners SVU owns, which collectively represent a little less than half of the company’s annual sales. More importantly, these likely are the most valuable real estate assets SVU owns as well. Additionally while the $4 tender offer represents a 31.6% premium versus the prior day’s closing price, we feel it values the new company too low. Thus, in terms of immediate value, Cerberus is probably getting the better end of the deal. Yet we believe this is a case where the break-up of a firm benefits both parties involved. As a going concern, SVU’s value is based more on future cash flows than the worth of its asset holdings. The new company will have annual sales in excess of $17 billion, comprised largely of its Independent Business and Save-A-Lot operations. Not only have these held up better than its Retail Food sales, but they also carry higher profit margins. The deal also cuts SVU’s total debt burden by roughly half to about $3.1 billion. Our revised analysis based on these new measures values the stock at roughly $5.50—more than 60% above the current price. Therefore, we are maintaining our BUY rating on SVU for now." So just before closing I bought 2,500 more shares @ $3.47. If SVU does reach $5.50 that'll be a 58% gain. As SVU begins to slowly move up I probably will sell some to lock in some great gains.
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