Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (5) | Ignore Thread Prev Thread | Next Thread
Author: DawdlingRamblr One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 120  
Subject: Not quite a spinoff, but... Date: 11/1/2006 10:30 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 2
Any one looked into Owens Corning (OC)? I only bring it up because they just emerged from bankruptcy, and may have the makings of a Joel Greenblatt play (my assumption is that any one on a spinoff board is interested in anything that Greenblatt might recommend). Here's a quick, late night rundown of why I think so -

As near as I can tell, it was (and is) a great company driven into bankruptcy by something that doesn't reflect the quality of their operations, either past and future, i.e. asbestos litigation. From what I gather, the asbestos litigation issue is now solved, the future liabilities are known (aside from some legislation that might lessen the burden), and Owens Corning can now move on.

They appear to have solid products and brand recognition (you gotta love the Pink Panther) and my initial look at their financials looked pretty good.

So far, so what, right? Here's the part that I am hoping turns this into a classic Greenblatt play. As part of the asbestos settlement, Owens Corning issued new stock to many of the bondholders at the time of the bankruptcy, about 25% of the current shares outstanding, if memory serves, and also gave them rights to buy additional shares at $30. The majority of those rights expired unused, signifying (at least to my simple thinking) that the bond holders aren't interested in owning any more of the company (at least not at $30) and hopefully known of it at all. If that's the case, there'll be some indiscriminate stock dumping in the near future. Also, the backers (I forget the exact term) (JPMorgan, etc.) of the rights offering ended up buying a bunch of the stock since the rights expired unused. They probably will be looking to unload as well.

So the question becomes, when to buy? I'm sorry but I don't know yet. My guess is...not yet!

If anybody has time, please run through some valuation. I'll try to give it a go myself, but a) I'm fairly inexperienced so it takes a bit longer and b) I probably won't have much time except for possibly this weekend.

If nothing else, hope somebody finds this blip on the radar useful.

Take care!

Jim
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post Back To Top
Author: Immord Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 35 of 120
Subject: Re: Not quite a spinoff, but... Date: 11/2/2006 1:24 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Jim,

It looks like we are the only people keeping this board alive right now. Anyway, I just looked at the stock and see it hit a new low today! I like your logic and will also run some quick numbers this weekend and post my thoughts.

By the way, both of your quotes are awesome!!!

John

Print the post Back To Top
Author: Immord Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36 of 120
Subject: Re: Not quite a spinoff, but... Date: 11/2/2006 8:05 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Jim,

This looks like an interesting find...how did you come across it?

John

Print the post Back To Top
Author: DawdlingRamblr One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 38 of 120
Subject: Re: Not quite a spinoff, but... Date: 11/2/2006 10:26 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
It looks like we are the only people keeping this board alive right now.

Yeah, it's kind of fun. Still a little more interest would be good. We could cover a lot more ground with a few more eyes looking at the upcoming spinoffs and I like to hear other people's thoughts. But at least we're keeping the candle burning. Maybe some more people will find their way as time passes.

I honestly can't believe that more people aren't interested in spinoffs. Personally, I loved Greenblatt's book, I really think that picking your spots is critical for small investors with limited time. I mean, I have more ideas than I can deal with, and I haven't had to buy any newsletters. I did cheat and get a free trial to Value Investor Insight when Joel Greenblatt was in there talking about American Express a couple months ago, and now he's in there again for the Value Investor's Club. Drat! The worst part is that I found an article about him talking about American Express elsewhere, so I essentially wasted my free trial. Double drat! I just can't justify the expense of a newsletter for my modest investment account at the moment.

In terms of the interesting find, it was mostly serendipity. We read a case study on Owens Corning's ERP implementation and business process re-engineering initiative(Advantage 2000) from 1996-2000 in one of my MBA classes, and it was pretty impressive. About that same time (about a month or month and a half ago), I saw that Owens Corning was emerging from bankruptcy in Nov so I put it on my spinoff/special situation watchlist. Then I read the press releases when they came out and they detailed all the information I reported. That's when I got really excited and realized I had to post something with the hope that someone else has looked at it. I posted on the Falling Knives board too, thinking they might be interested, but 2 recs and no replies so far over there. Not sure if anything will come of it or not. With the drop today, I have to believe that there's a chance this one will work out favorably. But what's the company worth? And how far will this drop? I don't know yet, but I really want to find out.

As you probably gathered from my quotes, I am a huge fan of Lord of the Rings, and Mr. Greenblatt is my favorite investment/finance author, and that quote is one of my favorite lines in his book, both for the humor and the advice. Not sure I have what it takes to apply either of those quotes to my investing effectively, but I surely intend to try.

Whelp, looks like I'm rambling again.

Thanks for your continued interest in this lonely little board.

Take care!

Jim

Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post Back To Top
Author: DawdlingRamblr One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 39 of 120
Subject: Re: Not quite a spinoff, but... Date: 11/2/2006 10:53 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
John, by the way, I like the description of your favorite stock...it has a familiar ring to it.

; )

Jim

Print the post Back To Top
UnThreaded | Threaded | Whole Thread (5) | Ignore Thread Prev Thread | Next Thread
Advertisement