Welcome to the February 8, 2010 edition of  the Festival of Stocks. This is the 179th edition of this long running blog carnival. The Festival of Stocks is a blog carnival dedicated to highlighting bloggers best posts on stock market related topics. Fat Pitch Financials is the actual birth place of this online weekly event, so it is always a special occasion when I get the chance to host this roving event.

I’ve just finished digging out from the blizzard that hit the DC area this past weekend. The street here is still not plowed and my back is a bit sore from shoveling. I’m more than happy to be sitting down to read another great edition of the Festival of Stocks with a nice cup of hot chocolate.

In addition to the normal submission to this week’s Festival of Stocks, I’m also going to highlight the top stories this week at Value Investing News. So without further delay, here are this week’s articles for the Festival of Stocks:

Top Stories at Value Investing News

Twelve Dividend Stocks Increasing Dividends (vote link) at Dividend Growth Investor. Several companies announced their intent to increase distributions to shareholders. I have separated the dividend raisers of the past week in three groups: dividend achievers, champions and aristocrats; master limited partnerships; and potential dividend achievers.

Xenoport – A Shaking Ham Hock (vote link) at Wax Ink. Simply put, we have about as much interest in this stock as hog has in the hereafter.

Magic Formula Weekly Roundup 2/6 (vote link) at MagicDiligence. Weekly roundup of stocks moving in and out of the Magic Formula Investing screen.

16 Dividend Stocks Aspiring To Be A Champion (vote link) at Dividends Value. There are winners and there are champions in every walk of life. The difference is subtle, but very real. A champion is driven for success and will not let anything stand in its way. Some dividend stocks can be classified as champions.

What I Learned Writing a Book, Part II: The Oracle Appears, Alone… Sort Of (vote link) at Jeff Matthews Is Not Making This Up. Jeff Matthews shares his observations on the atmosphere at the recent Berkshire Hathaway special meeting.

Stocks Analysis

United Technologies Corp. (UTX) Dividend Stock Analysis posted at Dividends Value, saying, “United Technologies Corp. is an aerospace-industrial conglomerate with a portfolio including Pratt & Whitney jet engines, Sikorsky helicopters, Otis elevators and Carrier air conditioners, among other products. Linked here is a detailed analysis and commentary.

Magic Formula Stock Review: Total System Services (TSS) posted at MagicDiligence, saying, “Total System Services is one of the largest providers of electronic payment processing services to banks and retailers worldwide. New contract wins overseas are helping to offset customer losses stemming from consolidation in the financial industry, but there are few near-term catalysts for growth.”

Realty Income (O) Dividend Stock Analysis posted at Dividend Growth Investor. This blogger believes that Realty Income is a good addition to any dividend growth portfolio, since it provides growing income and also provides diversification into commercial real estate.

Economy

The Deficit and Interest Rates posted at GoodFinancialCents. A look at the U.S. budget deficit and its potential impact on interest rates.

Funds and ETFs

2010 Stock Picks: REIT ETF’s posted at Intelligent Speculator, saying, “An important part of the collapse of the US & world economy was because of the huge real estate and debt bubble that had been created. Now, as things get back to normal, there are deals to be made in the real estate arena.”

iShares: A Leader in Exchange Transfer Funds (ETFs) posted at Personal Finance Analyst.

Broker Reviews

Choice Trade Review: $5 Trades, $0.99 Options posted at The Dough Roller. It looks like there is a new broker to choose from for the frequent trader.

Account Management and Planning

Why Direct Stock Purchase Plan Still Makes Sense posted at The Sun’s Financial Diary. Most of the costs and fees can be avoided by carefully choosing which plan to use.

Four Factors to Consider Before Roth IRA Conversion posted at Blueprint for Financial Prosperity. Some factors to consider before deciding to convert your IRA to a Roth IRA.

How to Retire as a Millionaire with your 401k Plan and 7 Strategies to Achieve Growth of your 401k Plan posted at Research 401kRollover.com, saying, “Learn the story of Knute Iwaszko who saved $1 million in his 401k plan with a $60,000 annual salary and paying the costs to raise 5 kids. You do not have to be a Goldman sachs CEO or a whiz kid on Wall Street making millions!”

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That concludes this edition of the Festival of Stocks. Be sure an leave comments as you visit each of the blogs that participated in this week’s Festival of Stocks. They’ll appreciate knowing folks are reading their articles.

I’m looking for hosts for the rest of 2010. If you are interested in volunteering to host a future edition of the Festival of Stocks, just contact me right away with the name of your site, blog URL, email address, and the date your prefer to host. Submit your blog article to the next edition of Festival of Stocks using our carnival submission form. Past posts and future hosts can be found on our Festival of Stocks index page for those of you interested in reviewing the archives.

The Fat Pitch Financials Portfolio has been off to a strong start in 2010. As of the market close on January 29, 2010, the Fat Pitch Financials Portfolio was up 1.38% for the month versus a negative 4.57% return for the S&P 500 over the same period of time. As you might recall, the Fat Pitch Financials Portfolio ended 2009 with a balance of $1,233,461.25. That balance has now grown to $1,261,199.83.

I launched this paper portfolio back in September of 2004 on Marketocracy with a virtual starting balance of $1 million and a per share value of $10. I created this paper portfolio shortly after I started the Fat Pitch Financials blog as a way my readers could track my stock picks. The objective of this portfolio is to invest in companies with wide moats that are selling for prices that provide for a significant margin of safety.

Over the past 12-months the FPF Value Port is up 60.84% versus just 30.10% for the S&P 500. The orange line in the graph below shows how the Fat Pitch Financials Port relative to the major indexes.

Price History for the Fat Pitch Financials Portfolio (as of January 29, 2010)

As you can see, the Fat Pitch Financials Port has outperformed the major indices since the end of last spring. According to Marketocracy, the Fat Pitch Financials Portfolio has outperformed 79.2% of all other Marketocracy funds over the past 2 years.

Returns as of January 30, 2010

Since inception in September of 2004, the FPF Value Port produced an annualized return of 4.37% versus the 1.12% return of the S&P 500. I’m proud that I’m beating the S&P 500 by 3.24%, but I hope to increase this margin substantially over the coming years.

Current Positions as of January 30, 2010

There were no new transaction in January. I’ve been waiting patiently for the market go into another panic. I looks like that could happen now in February.

The major news in January is that Destination Maternity (DEST) finally turned a profit in quarter one. It also looks like Kraft (KFT) is going to Cadbury (CBY) regardless of Warren Buffett’s advice to the company. Finally, I also reported on Premier Exhibitions Investor Day Presentation in January. I’m hoping that I’ll find a fat pitch opportunity in February to put some of the $153,474.32 in cash remaining in this portfolio to work.

Disclosure: I own shares of Western Sizzlin (WEST), Steak N Shake (SNS), Broadridge Financial Solutions (BR), Microsoft (MSFT), Western Union (WU), Kraft Foods (KFT), eBay (EBAY), Concord Camera (LENS), McGraw-Hill (MHP), Destination Maternity (DEST), Sotheby’s (BID), Pfizer (PFE), US Bancorp (USB), Wells Fargo (WFC), USG (USG), and Premier Exhibitions (PRXI).

Yesterday Premier Exhibitions (PRXI) gave a presentation to investors and shareholders in Las Vegas, Nevada on the company’s efforts to restructure. I just finished going over the Premier Exhibition Investor Day presentation slides that were posted in a SEC filing. Here are some of the highlights.

Premier Exhibitions has undertaken a critical assessment of their properties and process. The assessment examined  product presentation, market facing activities, brand extensions, and new concept development. The company found that it is underinvested in its core business, early success drivers for new exhibits are no longer available, their historic approach and process in ineffective, but solutions and opportunities abound for improvement. I guess when not much is going right, there are definitely opportunities to improve.

The attendance numbers for 2009 were not good:

The revenue trend from these exhibits doesn’t quite appear to have stabilized yet either.

The company did share some key facts about their shows that are worth noting. Premier Exhibitions can run up to 21 shows simultaneously. A typical show runs for six months. During one year they could run a show twice, but there is down time between each showing so the optimal operation is about 80 to 85%.

Their strategy looking forward is to better coordinate their functional groups, make critical assessments of markets and venues, and enhance lead time before selecting a show location. This is key so that they can outreach to key constituents in the market and assess third-party resources in the area such as PR firms. Premier Exhibitions will also do a comprehensive financial assessment before committing to a show. They believe that have made progress on these key points in their upcoming show bookings. They indicate they’ve successfully engaged with potential opponents, improved third-party relations, and improved the efficiency of their internal processes.

Premier Exhibitions also plans to improve their exhibits to make them more modern. They plan on adding guest appearances, designing more engaging experiences, and make it more digital. I think the move to more digital and online components to the exhibits is definitely the right move in today’s entertainment market. Last time I examined Premier Exhibitions‘ online presence, I was surprised at how weak it was.

While the presentation was not earth shattering and nothing real new was presented. I did note a focus on improving operating cash flows. I hope that this new and motivated management team can get this company on track. The value of the Titanic artifacts they are in possession of are key to the value of this stock. Premier owns all the artifacts recovered in 1987 and the federal court in Norfolk, Virginia has control over the post-1987 artifacts. Hopefully, this year the court will finally decide on the final fate of these remaining artifacts.

The Fat Pitch Financials Portfolio continues to retain a position in Premier Exhibitions. However, my patience is wearing thing. I expect to see major improvements this year in operating cash flows, especially if the economy continues to recover. If improvements aren’t achieved, I will reassess holding this stock.

Disclosure: I own Premier Exhibition (PRXI) shares at the time this article was posted.

The Special Situations Real Money Portfolio exceeded all my expectations in 2009. When all was said and done, the portfolio returned 50.50% in 2009! My unique special situations portfolio achieved the 50% return that Warren Buffett once said he could achieve if he managed less than $1 million.

My overall annualized rate of return since inception is 30.75%. The Special Situations Real Money Portfolio started on October 19, 2004 with just $2,000. Each year since then, I’ve added the maximum Coverdell Education Savings Account annual contribution of $2,000. The total amount I’ve invested in this account is $12,000. Given that the Special Situations Real Money Portfolio ended 2009 with a total value of $30,938.09, my total profit as of December 31, 2009 is $18,938.09. The total return since inception is 157.30%. I hope to maintain this record of performance for the next eleven year until my son starts college.

Stepping back a bit, I’d like to talk a bit about how last month went. As you might recall, the Special Situations Real Money Portfolio in November ended with a balance of $26,972.91. I made a $2,000 deposit last month. The portfolio had a balance of $30,938.09 when the market closed on December 31, 2009.  Adjusting for the deposit, the portfolio gained 6.78% in December. As of December 31, 2009, the Special Situations Real Money Portfolio held the following positions:

If you want to review all the trades of this portfolio and my special situations research, subscribe to Fat Pitch Financials Contributor’s Corner. As a premium member, you will be notified of new trades in the Special Situations Real Money Portfolio, have access in all the research used to find special situations opportunities for this portfolio, and be able to participate in the active forum composed of fellow savvy investors interested in special situation opportunities.

Disclosure: I own shares of MAXXAM (MAXX), 3Com (COMS), Sun Microsystems (JAVA), Kid Castle Educational (KDCE), Sunstone Hotel Investors (SHO), and Western Sizzlin (WEST).

The Fat Pitch Financials Portfolio performed nicely in 2009, especially given the challenging market conditions.  As of the market close on December 31, 2009, the Fat Pitch Financials Portfolio ended with a balance of $1,233,461.25.  Of that $154,312.72 was in cash and $1,079,148.53 was in stocks. Since I last reported on the Fat Pitch Financials Portfolio November closing balance, this paper portfolio was up 3.9%.

I launched this paper portfolio back in September of 2004 on Marketocracy with a virtual starting balance of $1 million and a per share value of $10. I created this paper portfolio shortly after I started the Fat Pitch Financials blog as a way my readers could track my stock picks. The objective of this portfolio is to invest in companies with wide moats that are selling for prices that provide for a significant margin of safety.

The FPF Value Port returned 42.44% versus just 26.47% for the S&P 500 in 2009. The orange line in the graph below shows how the Fat Pitch Financials Port relative to the major indexes.

Fat Pitch Financials Portfolio 2009 Performance

As you can see in the chart above, my portfolio began recovering more quickly than the market indexes after the March low. I’m hoping the Fat Pitch Financials Port will continue this trend of outperformance into 2010.

Since inception in September of 2004, the FPF Value Port produced an annualized return of 4.00% versus the 1.84% return of the S&P 500. I’m proud that I’m beating the S&P 500 by 2.15%, but I hope to increase this margin substantially over the coming years.

Fat Pitch Financials Portfolio Performance Since Inception (As of December 31, 2009)

Fat Pitch Financials Portfolio December 31, 2009

Total Value: $1,233,461.25 Cash Value: $154,312.72 Stock Value: $1,079,148.53 Shares: 100,000 Price: $12.33

Fat Pitch Financials Portfolio Style Allocation

Marketocracy also provides a style breakdown for its portfolios. According to the table above, the Fat Pitch Financials holds mostly value stocks. The 11% allocation to large cap growth stocks is attributed to my Kraft (KFT) and eBay (EBAY) positions. As far as the size of the companies held, the FPF Port is balanced between 51% allocation to large cap stocks and most of the remaining allocation split between small and micro cap stocks. I’m thinking that I should look to see if I’m missing any opportunities in mid-cap stocks.

Fat Pitch Financials Portfolio Positions by Sector and Industry

The Fat Pitch Financials portfolio holdings are predominately in consumer discretionary and information technology stocks.  These two sector categories make up 81% of the portfolio. Unfortunately, I held 10% of the portfolio in financials, but thankfully they recovered nicely at the end of 2009. My 3% position in the health care sector seems a bit scimpy, but given the changes in the health care sector given the government’s reform efforts it might actually be prudent to see how the changes shake out.

There were no new transactions in December. The only real change was the 20 to 1 reverse split that Steak N Shake (SNS) conducted. I think that reverse split was kind of silly, and it has given me some reservations regarding my Steak N Shake investment.

I look forward to 2010 and hope to continue beating the market.

Disclosure: I own shares of Western Sizzlin (WEST), Steak N Shake (SNS), Broadridge Financial Solutions (BR), Microsoft (MSFT), Western Union (WU), Kraft Foods (KFT), eBay (EBAY), Concord Camera (LENS), McGraw-Hill (MHP), Destination Maternity (DEST), Sotheby’s (BID), Pfizer (PFE), US Bancorp (USB), Wells Fargo (WFC), USG (USG), and Premier Exhibitions (PRXI).

Happy New Year! Welcome to the 174th edition of the Festival of Stocks. The Festival of Stocks is a blog carnival dedicated to highlighting the best posts on stock market related topics. Fat Pitch Financials is the actual birth place of this online weekly event, so it is always a special occasion when I get the chance to host this roving event and this week is particularly special since it is the first edition of the Festival of Stocks for 2010.

Here are this week’s entries:

Top Ten Value Investing News Stories of 2009 post here at Fat Pitch Financials. Discover the top value investing articles submitted in 2009.

Stanley Works (SWK) Dividend Stock Analysis posted at Dividend Growth Investor. This blogger reports that  Stanley Works is overvalued at 22 times earnings, yields 2.70% and has an adequately covered distribution payment.

Emerson Electric Co. (EMR) Dividend Stock Analysis posted at Dividends Value, saying, “Emerson Electric Co. primarily makes backup power equipment for telecom and Internet providers and users, climate control components, and electric motors. Linked here is a detailed analysis and commentary.”

Magic Formula Stock Review: Weight Watchers International Inc. (WTW) posted at MagicDiligence.  Weight Watchers is a very profitable company with a well established brand and differentiated product. The stock is cheap and pays a respectable dividend. The one major concern is a huge debt load which leaves the company little wiggle room for mistakes.

How to create online investment tracking spreadsheet posted at Old School Value. Use this free stock tracking spreadsheet or learn how to create your own dynamic online portfolio tracking spreadsheet that is always up to date. You can now view it anywhere, anytime.

Top 20 Daytrader Secrets for Day Trading Stocks, Emini Day Trading, Forex and Other Markets. posted at Top Dog Trading, saying, “A one-hour day trading program with pdf and videos that shows exactly what turns a daytrader from loser to winner. Provided free to the trading community. I hope it can help you too.”

What is Value Investing? posted at The Dough Roller. So let’s take a look at what value investing is, why it matters, and some funds that invest in value oriented stocks.

Buying the Dividend and Dividend Dates posted at Blueprint for Financial Prosperity. Jim examines the flaw in buying a stock just before it issues a dividend.

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That concludes this edition of the Festival of Stocks. Be sure an leave comments as you visit each of the blogs that participated in this week’s Festival of Stocks. They’ll appreciate knowing folks are reading their articles.

I’m looking for hosts for the rest of 2010. If you are interested in volunteering to host a future edition of the Festival of Stocks, just contact me right away with the name of your site, blog URL, email address, and the date your prefer to host. Submit your blog article to the next edition of Festival of Stocks using our carnival submission form. Past posts and future hosts can be found on our Festival of Stocks index page for those of you interested in reviewing the archives.

Happy New Year! Before we dive into 2010, let’s take a look back at the top stories of 2009 at Value Investing News. The following stories received the highest ratings by the members of Value Investing News in 2009:

1. Insmed INSM Net Net Stock Analysis Valuation via oldschoolvalue.com
   Stock analysis and valuation of INSM based on benjamin graham net net formula and epv. Detailed financial statement analysis provided as well.
   Submitted by jjun0366 on Mon, 2009-11-09 05:20.
2. IBM Stock Analysis via thediv-net.com
   IBM is a major component of the S&P 500, Dow Industrials and the Dividend Achievers Indexes. IBM has been consistently increasing its dividends for 13 consecutive years. From the end of 1998 up until December 2008 this dividend growth stock has delivered a zero annual average total return to its shareholders.
   Submitted by Dividend Growth Investor on Wed, 2009-07-01 05:14.
3. Taking Stock in Coca-Cola (KO) via nurseb911.com
   An in depth fundamental stock analysis on The Coca-Cola Company discussing their business operations, margins and sustainable competitive advantage.
   Submitted by nurseb911 on Mon, 2009-01-12 07:59.
4. 2009 Forbes Best Small Companies Part 2 via oldschoolvalue.com
   Intrinsic value price targets of forbes 2009 best small companies. Part 2.
   Submitted by jjun0366 on Mon, 2009-11-16 02:25.
5. 2009 Forbes Best Small Companies Part 1 via oldschoolvalue.com
   First 10 of the 2009 Forbes Best Small Companies. I go through all 200 to find the best potential investment. Commentary and valuations included.
   Submitted by jjun0366 on Wed, 2009-11-11 04:16.
6. 3 Value Stock Ideas via oldschoolvalue.com
   Three stock ideas that are also good businesses. Find out the intrinsic value by DCF valuation and other valuation methods.
   Submitted by jjun0366 on Tue, 2009-08-04 02:32.
7. Myths about Warren Buffett via dividendgrowthinvestor.com
   Warren Buffett is the richest investor in the world. The student of the father of value investing Ben Graham, learned how to invest money in the Graham-Newman Corp. partnership in the early 1950s. After it was closed, Buffett formed his own investment management partnership.
   Submitted by Dividend Growth Investor on Thu, 2009-07-09 07:03.
8. Dividend News: A Few Increases, More Expected in July via dividendgrowthinvestor.com
   Several companies raised their distributions over the past week: Despite the slow week for dividend increases, I am looking forward to a relatively busy July, since historically some well-known dividend aristocrats like Walgreen (WAG) and Stanley Works (SWK) tend to raise their dividends during the current month.
   Submitted by Dividend Growth Investor on Tue, 2009-07-07 06:22.
9. Best Yielding Stocks for 2009 2Q Update via dividendgrowthinvestor.com
   The companies I selected were representative of four high yielding sectors- real estate,energy transportation,utilities and tobacco. Despite the high yields, the dividend payments seemed sustainable enough even during the financial meltdown. The average yield on the four stocks mentioned below is 6.88%.
   Submitted by Dividend Growth Investor on Thu, 2009-07-02 04:42.
10. Pepsi Co (PEP) Stock Analysis via thediv-net.com
    PepsiCo, Inc. manufactures, markets, and sells various snacks, carbonated and non-carbonated beverages, and foods worldwide. PepsiCo is a major component of the S&P 500, Dow Industrials and the Dividend Aristocrats Indexes. PepsiCo has been consistently increasing its dividends for 36 consecutive years.
    Submitted by Dividend Growth Investor on Thu, 2009-07-02 04:15.

You can continue reading all the top stories of 2009 by visiting the Popular story links of this year at Value Investing News page.

Welcome to the December 28, 2009 edition of the Festival of Stocks. The Festival of Stocks is a blog carnival dedicated to highlighting bloggers best posts on stock market related topics. Fat Pitch Financials is the actual birth place of this online weekly event, so it is always a special occasion when I get the chance to host this roving event.

If you aren’t already familiar with my blog, Fat Pitch Financials, it is a value investing blog with a focus on wide moat companies selling at substantial discounts and Graham style workouts. I encourage you to subscribe for free to my blog feed to keep up with my latest postings.

You should also check my Fat Pitch Financials Contributor’s Corner while you are here. It is my premium members only community dedicated to unique arbitrage and special situation opportunities.

Now that you are familiar with Fat Pitch Financials, let’s take a look at this week’s Festival of Stock participants. Here are this week’s entries:

Magic Formula Stock Review: PRG-Schultz International Inc. (PRGX) – MagicDiligence posted at MagicDiligence, saying, “PRG-Schultz is a cheap Magic Formula stock that looks to be priced below the level of risk stemming from a declining customer base and uncertain potential from the upcoming Medicare auditing business.”

ETFs vs. Mutual Funds: The Ultimate Guide posted at ETFdb.

Nucor Corporation (NUE) Dividend Stock Analysis posted at Dividends Value, saying, “Nucor Corporation is engaged in the manufacture and sale of steel and steel products. As the largest minimill steelmaker in the U.S., Nucor has one of the most diverse product lines of any steelmaker in the Americas. Linked here is a detailed analysis and commentary.”

About Dividends and ex-Dividends posted at PFStock.com, saying, “I want to shed some light on this topic.”

Qualified Dividends posted at Trading Stocks.

Where Dividend Stocks Fit in Your Portfolio posted at Blueprint for Financial Prosperity.

E*Trade Review – Online Discount Broker posted at The Dough Roller.

December Shapes Up as Microcosm of 2009 posted at Jeff Rose.

Israel’s Financial and Defense Expert: Short of the year 2010- Israeli banks, currency and government bonds posted at Israel’s Financial and Defense Expert.

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That concludes this edition of the Festival of Stocks. Be sure an leave comments as you visit each of the blogs that participated in this week’s Festival of Stocks. They’ll appreciate knowing folks are reading their articles.

Next week’s Festival of Stocks will be at Fat Pitch Financials. After that, I’m looking for hosts for the rest of 2010. If you are interested in volunteering to host a future edition of the Festival of Stocks, just contact me right away with the name of your site, blog URL, email address, and the date your prefer to host. Submit your blog article to the next edition of Festival of Stocks using our carnival submission form. Past posts and future hosts can be found on our Festival of Stocks index page for those of you interested in reviewing the archives.

Welcome to the December 14, 2009 edition of the Festival of Stocks. The Festival of Stocks is a blog carnival dedicated to highlighting bloggers best posts on stock market related topics. Fat Pitch Financials is the actual birth place of this online weekly event, so it is always a special occasion when I get the chance to host this roving event.

If you aren’t already familiar with my blog, Fat Pitch Financials, it is a value investing blog with a focus on wide moat companies selling at substantial discounts and Graham style workouts. I encourage you to subscribe for free to my blog feed to keep up with my latest postings.

You should also check my Fat Pitch Financials Contributor’s Corner while you are here. It is my premium members only community dedicated to unique arbitrage and special situation opportunities.

Now that you are familiar with Fat Pitch Financials, let’s take a look at this week’s Festival of Stock participants. Here are this week’s entries:

Special Situations Real Money Portfolio November 2009 Update post here at Fat Pitch Financials. At the end of November the year-to-date performance of this unique little portfolio was 45%! Today it broke 50% for the year. Learn what trades I made in November.

Book Review – Winning The Loser’s Game posted at The Canadian Finance Blog, saying, “Winning The Losers Game is another book that stresses the benefits of index investing over a long time horizon.”

The best time of the day to trade? hint: you can sleep-in posted at IndependentInvestor.info, saying, “Our site recommends a long-term, buy and hold, approach to investing. In theory short-term stock trading techniques are not relevant to our site…unless when investing they can enable us to obtain better stock prices by trading (or avoiding trading) during certain trading hours. Is there a best ( or least bad) time to trade? Are you better off trading early in the day, at noon time when many are away for lunch, or in the final minutes before the close of markets?”

Definitive Guide To Coffee ETFs: Coffee ETF Investing 101 posted at ETFdb.

Archipelago Learning IPO Sets Up Attractive Trade posted at ZachStocks, saying, “Archipelago Learning Inc. (ARCL) has traded down to the IPO price after a successful offering. Investors have an opportunity to buy close to the transaction price with the underwriters likely to support the deal.”

HCC Insurance Holdings Inc. (HCC) Dividend Stock Analysis posted at Dividends Value, saying, “HCC Insurance Holdings Inc. is a multi-line insurer that specializes in aviation, marine, medical stop-loss, offshore energy and property and casualty insurance in the U.S. and the U.K. Linked here is a detailed analysis and commentary.”

Magic Formula Stock Review: ValueClick (VCLK) posted at MagicDiligence – Optimizing Joel Greenblatts Value Stock Strategy, saying, “ValueClick is one of the largest pure Internet marketing firms. While competition is strong and management is less-than-stellar, ValueClick’s price, excellent business model, and potential to be acquired make it a tepid buy.”

Welcome to Wall Street – Part 3 posted at World Domination with Arthur Pledger.

Treasuries Take Employment Report in Stride posted at Jeff Rose.

Online Discount Brokers: SmartMoney Broker Survey posted at The Digerati Life.

Why Dividends Stocks Rock posted at Blueprint for Financial Prosperity.

The David Swensen Asset Allocation Model posted at The Dividend Guy Blog, saying, “David Swensen manages the Yale Endowment fund and has been very successful at it. In this post, I describe his asset allocation model. Is this how you should design your portfolio?”

Weekend reading: Financial (ill) advisers shun ETFs posted at Monevator.com, saying, “Despite all the advantages of exchange traded funds, research has recently found that most financial advisers have never recommended a low-cost ETF to their clients.”

Scottrade Review–Online Discount Broker posted at The Dough Roller.

Scottrade Review: Best Online Brokerage posted at The Smarter Wallet, saying, “Thought to cover a top broker.”

Brown and Brown ? A Mid Cap Dividend Growth Company posted at Dividend Tree, saying, “Brown and Brown Inc is stable and slow growth mid-cap company. It is expected to continue to have a sustainable cash flow over next few years. It is typical dividend growth company where dividends have grown in excess of 10%.”

Stock Split: Is it Good for Small Investors? posted at Internet Stock Trading for Beginners.

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That concludes this edition of the Festival of Stocks. Be sure an leave comments as you visit each of the blogs that participated in this week’s Festival of Stocks. They’ll appreciate knowing folks are reading their articles.

Next week’s Festival of Stocks will be at ModernGraham. After that, I’m looking for hosts for the new year.  If you are interested in volunteering to host a future edition of the Festival of Stocks, just contact me right away with the name of your site, blog URL, email address, and the date your prefer to host. Submit your blog article to the next edition of Festival of Stocks using our carnival submission form. Past posts and future hosts can be found on our Festival of Stocks index page for those of you interested in reviewing the archives.

Here’s a quick update on my Special Situations Real Money Portfolio. The portfolio closed the end of November with a balance of $26,972.91. That’s up 2.81% from the balance I reported at the end of October for the Special Situations Real Money Portfolio.

The Special Situations Real Money Portfolio is a real Coverdell Education Savings Account I created for my son on October 19, 2004. I decided to dedicate this small tax sheltered account to special situation opportunities and Graham style stock workouts. Back in 2004, the primary focus was on going private transactions. Since then, I have also added tender offers, spinoffs, split-offs, net-nets, merger arbitrage, and some other unique event based opportunities.

The year-to-date performance for the portfolio remains a strong 45.35% return. Looking back at the portfolio’s performance since inception on October 19, 2004, the Special Situations Real Money Portfolio has produced a total return of 169.72% as of the close of business on November 30, 2009. The average annualized return since inception remains an amazing 29.24%.

The Special Situations Real Money Portfolio was involved in several transactions this past month.  On November 9th, I received 93 shares of Steak ‘n Shake (SNS) from the 200 shares of Western Sizzlin (WEST) the account held then.  I also received $0.13 in cash in lieu of fractional shares as a result of that stock dividend/spinoff.

Also on November 9th, I was cashed out of the 1,000 shares of Centennial Communications Corp. (CYCL). I received $8.50 per share in cash from AT&T (T) as expected in that merger deal.  I originally purchased those shares of Centennial Communications on October 2, 2009 for $7.90 per share. My net return on that 39 day transaction was 7.5%. The average annualized rate of return for that simple deal came to a whopping 70.2%.

Then on November 10th, I picked up another 200 shares of Western Sizzlin (WEST) at $8.68 per share. Western Sizzlin shares now represent the right to receive a callable 5 year debenture with a $8.07 face value that pays 14% interest. Even if the debenture is called after the first year, I should get a nice return on this investment.

I’ve been also looking for another split-off to invest in and I found one on November 16th. Bristol-Myers Squibb (BMY) initiated a split-off of their infant formula subsidiary, Mead Johnson Nutrition (MJN). Bristol-Myer  shareholders will roughly receive $1.11 in Mead shares for each $1 in Bristol shares they tender. I love the odds associated with these type of deals. I picked up 99 shares to avoid any proration when I tender my shares.

Finally, on November 19, 2009 I bought another merger arbitrage position in a tech company. If you are interested to learn more about this recent transaction, consider becoming a member of Fat Pitch Financials Contributors Corner. Sign up for my premium Fat Pitch Financials Contributors Corner to track my research and follow my next moves in the Special Situations Real Money Portfolio.

Welcome to the December 7, 2009 edition of the Festival of Stocks. The Festival of Stocks is a blog carnival dedicated to highlighting bloggers best posts on stock market related topics. Fat Pitch Financials is the actual birth place of this online weekly event, so it is always a special occasion when I get the chance to host this roving event.

If you aren’t already familiar with my blog, Fat Pitch Financials, it is a value investing blog with a focus on wide moat companies selling at substantial discounts and Graham style workouts. I encourage you to subscribe for free to my blog feed to keep up with my latest postings.

You should also check my Fat Pitch Financials Contributor’s Corner while you are here. It is my premium members only community dedicated to unique arbitrage and special situation opportunities.

Now that you are familiar with Fat Pitch Financials, let’s take a look at this week’s Festival of Stock participants. Here are this week’s entries:

The Forbes Best 200 Small Companies List, Ranked in Magic Formula Fashion posted at MagicDiligence, saying, “In this article, MagicDiligence ranks Forbes’ Best 200 Small Companies for 2009 using the Magic Formula technique.”

Fair Isaac Corporation (FICO) – Stock Analysis posted at One Family’s Blog, saying, “An analysis and recommendation of Fair Isaac Corporation (FICO) stock.”

San Francisco Hard Assets 2009 Conference posted at PFStock.com.

AOL Spin-off Set for December 10th, Price Looks Meager posted at Finance Banter, saying, “Chad Brand looks at the new AOL as an opportunity”

Trend Trading Tips for Swing Trading and the Day Trader posted at Top Dog Trading, saying, “The classic definition of a trend does not work very well when actually trading or investing. Here’s what does”

Aflac Incorporated (AFL) Dividend Stock Analysis posted at Dividends Value, saying, “Aflac Incorporated engages in the marketing and sale of supplemental health and life insurance plans in the United States and Japan. Linked here is a detailed analysis and commentary.”

8 Sample (and Simple) Portfolios posted at The Oblivious Investor, saying, “Investing doesn’t have to be complicated. These low-cost, buy & hold portfolios allow investors to make things as simple as they’d like.”

First Cash Financial Breaking to New Recovery High posted at ZachStocks, saying, “First Cash Financial Services (FCFS) recently broke out of a long base. Earnings continue to be strong and the company has expanded it’s presence in Mexico”

New Margin Requirements for Leveraged ETFs Whack Retail Investors but Don’t Address Ignorance posted at Darwin’s Finance, saying, “While FINRA’s new margin requirements for leveraged ETFs whack retail investors they do nothing to address ignorance of how the instruments actually work.”

Time for High Yield Investments if Market has Peaked? posted at Everyday Finance, saying, “With stocks coming off the most prolific run in 75 years, perhaps it’s time to move out of capital appreciation mode and into high yield investments? This article outlines several obscure means to achieve income in this market.”

TIPS (Treasury Inflation Protected Securities) at the Top? posted at Jeff Rose.

How to Determine Your Asset Allocation posted at Blueprint for Financial Prosperity.

Estimating future Dividend Growth posted at Dividend Growth Investor, saying, “Estimating future dividend growth is difficult if not impossible. Companies which might have had a long history of consistent double digit increases might stop raising dividends and might even cut them. It is easy to predict whether or not a company’s dividend is sustainable in the short run, by evaluating EPS trends, dividend payout ratios and cash flows. It is difficult to forecast however whether the dividend won’t be cut several years down the road.”

Fat Pitch Financials Portfolio November Update posted at Fat Pitch Financials, saying, “The Fat Pitch Financials Portfolio continued to gain ground in November. Since I last reported on the Fat Pitch Financials Portfolio October closing balance, this paper portfolio is up 2.7%.”

optionsXpress Trading Platform Review posted at The Sun’s Financial Diary.

***

That concludes this edition of the Festival of Stocks. Be sure an leave comments as you visit each of the blogs that participated in this week’s Festival of Stocks. They’ll appreciate knowing folks are reading their articles.

Next week’s Festival of Stocks is still looking for a home. If you are interested in volunteering to host a future edition of the Festival of Stocks, just contact me right away with the name of your site, blog URL, email address, and the date your prefer to host. Submit your blog article to the next edition of Festival of Stocks using our carnival submission form. Past posts and future hosts can be found on our Festival of Stocks index page for those of you interested in reviewing the archives.

The Fat Pitch Financials Portfolio continued to gain ground in November. Since I last reported on the Fat Pitch Financials Portfolio October closing balance, this paper portfolio is up 2.7%. The portfolio had closing balance of $1,177,667.82 on November 30, 2009.

I launched this paper portfolio back in September of 2004 on Marketocracy with a virtual starting balance of $1 million and a per share value of $10. I created this paper portfolio shortly after I started the Fat Pitch Financials blog as a way my readers could track my stock picks. The objective of this portfolio is to invest in companies with wide moats that are selling for prices that provide for a significant margin of safety.

Year-to-date the FPF Value Port is up 36.00% versus just 24.07% for the S&P 500. The orange line in the graph below shows how the Fat Pitch Financials Port relative to the major indexes.

Price History for the Fat Pitch Financials Portfolio (as of November 30, 2009)

As you can see, the Fat Pitch Financials Port has recently pulled ahead of the S&P 500 and Nasdaq.  According to Marketocracy, the Fat Pitch Financials Portfolio has outperformed 93.9% of all other Marketocracy funds over the past 2 years.

Returns as of November 30, 2009

As you can see in the table above, the FPF Value Port gained 2.68% in November, whereas the S&P 500 gained 6.00%. Over the past 12 months, the Fat Pitch Financials Port gained 38.81%, outpacing the 25.39% total return for the S&P 500 over that same period. Since inception in September of 2004, the FPF Value Port produced an annualized return of 3.14% versus the 1.50% return of the S&P 500. I’m proud that I’m beating the S&P 500 by 1.64%, but I hope to increase this margin substantially over the coming years.

Fat Pitch Financials Portfolio Style Allocation

Marketocracy also provides a style breakdown for its portfolios. According to the table above, the Fat Pitch Financials holds mostly value stocks. The 11.8% allocation to large cap growth stocks is attributed to my Kraft (KFT) and eBay (EBAY) positions.  As far as the size of the companies held, the FPF Port is balanced between 54% allocation to large cap stocks and most of the remaining allocation split between small and micro cap stocks.

Current Positions as of November 30, 2009

My strongest performing position continues to be Microsoft (MSFT). The roll out of Windows 7 seems to have gone well. I just upgraded to a new Windows 7 Profession PC and I like what I see so far. It will be interesting to see how Windows 7 sales impact next quarter earnings.

The only activity to note this past month was the spin off of Steak N Shake (SNS) shares from Western Sizzlin (WEST). The portfolio received 2,687 shares of Steak N Shake.  Western Sizzlin will also soon cease trading and be converted instead into callable debentures with a face value of $8.07 that pay 14% interest annually.  I just realized that Marketocracy might not be able to handle the debentures, so I might have to sell off the Western Sizzlin position soon to keep the performance tracking somewhat accurate.

I still have $153,999.38 in cash available in this portfolio to start one or two new positions if I discover any opportunities. If the market relapses, I’ll be ready to pounce.

Disclosure: I own shares of Western Sizzlin (WEST), Steak N Shake (SNS), Broadridge Financial Solutions (BR), Microsoft (MSFT), Western Union (WU), Kraft Foods (KFT), eBay (EBAY), Concord Camera (LENS), McGraw-Hill (MHP), Destination Maternity (DEST), Sotheby’s (BID), Pfizer (PFE), US Bancorp (USB), Wells Fargo (WFC), USG (USG), and Premier Exhibitions (PRXI).

I am sure many of you spent much of last week traveling and spending time with your family. It is always good to unplug from the markets for a bit and enjoy time with friends and family. If you are a bit behind on your reading, this list of top story links from the past week at Value Investing News should bring you up to speed:

1. Working capital in FCF Calculation (vote up/down)
2. Magic Formula Weekly Roundup 11/28 (vote up/down)
3. 9 Dividend Stocks Working Hard During The Holidays (vote up/down)
4. Southeastern Asset Management (Longleaf) files 13F for September 30th, 2009 (vote up/down)
5. 7 Dividend Stocks To Take The Emotion Out Of Investing (vote up/down)
6. Monish Pabrai files 13F for September 30th, 2009 (vote up/down)
7. MFI Stock Review: ITT Educational Services (ESI) (vote up/down)
8. Amended Berkshire Hathaway Filing Indicates No Secret Stock Stakes at End of Q3 (vote up/down)
9. Stock Analysis: HCC Insurance Holdings Inc. (HCC) (vote up/down)
10. Video: Warren Buffett’s Secret To Success With Alice Schroeder (vote up/down)

You should also check out last week’s Festival of Stocks at Modern Graham. This week’s Festival of Stocks will be posted shortly at TIPBlog.in.

There were some great story links posted at Value Investing News this past week. Here are the top ten according to members of the site:

1. Insmed INSM Net Net Stock Analysis Valuation
2. 7 Dividend Stocks To Slay The Wall Street Giants
3. Warren Buffett’s $100,000 Offer and $500,000 Advice for Columbia Business School Students
4. Warren Buffett and the Crisis: ‘Brilliant Moves Interspersed with Some Surprising Errors’
5. Four Dividend Raisers in the news
6. Measurement Specialties, Inc. – A Wax Ink Raw Value Report
7. Microsoft’s Bill Gates Praises Apple’s Steve Jobs For ‘Saving the Company’
8. 2009 Forbes Best Small Companies Part 1
9. Steak n Shake Transforming Into Mini Berkshire Hathaway
10. Bill Gates & Warren Buffett On Leadership-CNBC

The November Contest is also underway at Value Investing News. This month you could win one of the three subscriptions to Fat Pitch Financials Contributors Corner that we are giving away to the most active members of the site. Just register and start posting story links, voting, commenting, and participating in the forum to win.

Here are the top stories last week at Value Investing News according to our members:

1. The Dividend Investment Journey via dividendgrowthinvestor.com
2. Buffett’s Berkshire Hathaway May Lose Only Remaining AAA Credit Rating via cnbc.com
3. Berkshire Hathaway to Acquire Burlington Northern via cnbc.com
4. Magic Formula Weekly Roundup 11/7 via magicdiligence.com
5. The Great Iron Horse BNSF New Engineer: Warren Buffett via stockmanmarc.blogspot.com
6. MFI Stock Review: Cephalon (CEPH) via magicdiligence.com
7. Courtesy Call Turns Into a Quick Agreement via wsj.com
8. Dividend Stocks: A Disciplined Approach via dividendsvalue.com
9. My Take on Buffett’s Acquisition of Burlington Northern (BNI) via moderngraham.com
10. Seth Klarman’s Baupost Group Annual Meeting Notes via streetcapitalist.com

Be sure to also check out last week’s Festival of Stocks at the IntelligentSpeculator. This week’s Festival of Stocks will be up shortly at ModernGraham.

As a follower of Warren Buffett, I learned about Berkshire Hathaway’s (BRK-A) acquisition of Burlington Northern Santa Fe (BNI) early yesterday morning. Most value investors probably were interested in learning more about how Mr. Buffett valued BNI. What is the intrinsic value of BNI? What kind of margin of safety did Buffett’s $100 per share offer represent? Was Warren Buffett revealing anything about the value of Berkshire Hathaway shares by offering Burlington Northern shareholders the option of $100 in cash or Berkshire Hathaway shares?

However, the first thing I thought of was would this potentially present a fat pitch special situation opportunity. Warren Buffett always keeps his word on merger deals. Could the Burlington Northern offer create another Constellation Energy Group (CEG) opportunity?

As you might recall, last year I made some significant profits from the Constellation Energy Group merger arbitrage. Berkshire Hathaway’s MidAmerican Energy Holdings offered $26.50 per share in cash for Constellation Energy. After the deal was announced, the price of CEG shares drift down to as low as $15 and then up to $30 last year. Mr. Market sure got moody, even with Mr. Buffett at the helm of that deal. Could the same thing happen again with BNI?

I decided to ask my Twitter followers. Here’s my question and their responses:

FatPitch: I’m hoping $BNI will dip down to $90 in the coming weeks. Do you think it will happen? Lower?

rationalwalk: @FatPitch Can’t see BNI slipping to $90…. would require crash in BRK shares well below $80K to do that.  Very, very unlikely.

marketfolly: @FatPitch could happen if market dives as many predict. at same time, few merger/arb plays out there right now; funds swarm to same plays

ModernGraham: @FatPitch If it does, it would be Mr. Market at his finest – there’s no reason for it to be anything but $100 now

MrMarketBlog: @FatPitch I doubt it. I don’t think anyone is going to doubt Warren getting this deal done

vlad0: don’t underestimate irrationality

What are your thoughts on the potential for arbitrage profits with the Burlington Northern Santa Fe deal? Share them in the comments section below or follow me on Twitter.

The Special Situations Real Money Portfolio is a real Coverdell Education Savings Account I created for my son on October 19, 2004. I decided to dedicate this small tax sheltered account to special situation opportunities and Graham style stock workouts. Back in 2004, the primary focus was on going private transactions. Since then, I have also added tender offers, spinoffs, split-offs, net-nets, merger arbitrage, and some other unique event based opportunities.

This little investment experiment worked out much better than I ever dreamed it could. In fact, the results were so good it drew a lot of traffic to the going private transaction table I maintained here on the blog. It seemed that as soon as I posted a deal on the going private transactions table, the profit margins would evaporate.

I also became worried that some of the attention would make it back to the companies that were going private. There is always the danger that they could restructure their offers to the detriment of small individual investors. Therefore, I decided to put the going private transaction list behind a password wall and I created the premium service that I now call Fat Pitch Financials Contributors Corner. In Contributors Corner, I still maintain the going private transaction list and I also now track odd-lot tender offers, cash mergers, spinoffs, net-nets, and manage an active members only forum dedicated to discovering and discussing special situations.

This past month, the Special Situations Portfolio held steady. As I reported last month, the Special Situations Portfolio closed out September with a balance of $26,594.77. When the market closed on October 30, 2009, this account was worth $26,235.05. That’s down 1.4% for the month. Most of that decline can be attributed to one merger arbitrage opportunity that I recently entered, which has subsequently declined in price.

The year-to-date performance for the portfolio remains a strong 41.38% return. Looking back at the portfolio’s performance since inception on October 19, 2004, the Special Situations Real Money Portfolio has produced a total return of 162% as of the close of business on October 30, 2009. The average annualized return since inception remains an amazing 29.0%.

I entered three new positions this month. The names of those stocks are available to members of Fat Pitch Financials Contributors Corner. They include two merger arbitrage plays and one small going private transaction.

I only completed one transaction in October and it involved New Horizons Worldwide (NEWH). Back on April 20, 2009, I bought 24 shares of New Horizons Worldwide at $0.56 per share. My total cost for this tiny transaction was $20.39. This reverse/forward stock split going private transaction was expected to pay out $1.85 per share in cash to shareholders holding less than 25 shares. There was not much profit potential in this transaction, but I thought it would make for a great learning opportunity for new special situation investors. I only picked up these shares when the price dropped significantly down to $0.56. Limit orders are critical on these types of trades given the low liquidity. On October 9th, I was finally cashed out. I received a total of $44.40 for my 24 shares.  That comes out to a 118% return in less than six months. It’s hard to turn down that kind of return, even if the overall payout is only $24.01.

I hope next month I’ll be able to share the results of some larger transactions. Until then, you can track my current trades by becoming a premium member of Fat Pitch Financials Contributors Corner.

Disclosure: I no longer own shares of New Horizons Worldwide (NEWH).

It has been quite a while since I’ve updated folks on the status of my Fat Pitch Financials Value Portfolio.  I launched this paper portfolio back in September of 2004 on Marketocracy with a virtual starting balance of $1 million and a per share value of $10. I created this paper portfolio shortly after I started the Fat Pitch Financials blog as a way my readers could track my stock picks. Now over five years later, I think it paints a pretty good picture of how my long term value stock picks have performed.

Since I last reported at the end of  May on the Fat Pitch Financials Portfolio, the portfolio has recovered from a balance of $946,732.78 to its closing value on October 30, 2009 of $1,146,935.59. That’s up over 21% in five months. Year-to-date the FPF Value Port is up 32.45% versus just 17.05% for the S&P 500. The orange line in the graph below shows how the Fat Pitch Financials Port has done over the past year.

12 Month Price History for the Fat Pitch Financials Port (as of October 31, 2009)

As you can see, the strongest recovery occurred from March through May. Since the beginning of August, the portfolio has been rather flat, except for the rally that occurred in mid-October.

Returns as of October 31, 2009

As you can see in the table above, the FPF Value Port gained 2.66% in October, whereas the S&P 500 lost 1.86%. Over the past 12 months, the Fat Pitch Financials Port gained 25.27%, outpacing the 11.49% total return for the S&P 500 over that same period. Since inception in September of 2004, the FPF Value Port produced an annualized return of 2.66% versus the 0.38% return of the S&P 500. I’m proud that I’m beating the S&P 500 by 2%, but I hope to increase this margin substantially over the coming years.

For the six month period ending September 30, 2009 Fat Pitch Financials Portfolio outperformed 84.3% of the other funds on Marketocracy. My goal now is to get into the top 5% of funds tracked at that site. I hope to do that by deploying the remaining $155,814.29 in cash in my fund in some great fat pitch opportunities as the current market recovery falters.

Current Positions as of October 31, 2009

My best performing position is currently Microsoft (MSFT). At one point it seemed like I was the only value investor talking about Microsoft. However, lately I’m starting to read that many other investors are starting to get interested in this industry giant. The roll out of the new Windows 7 operating system will be a major milestone for this company. I’ll have to watch closely at how it turns out.

Disclosure: I own shares of Western Sizzlin (WEST), Broadridge Financial Solutions (BR), Microsoft (MSFT), Western Union (WU), Kraft Foods (KFT), eBay (EBAY), Concord Camera (LENS), McGraw-Hill (MHP), Destination Maternity (DEST), Sotheby’s (BID), Pfizer (PFE), US Bancorp (USB), Wells Fargo (WFC), USG (USG), and Premier Exhibitions (PRXI).

Here are the top stories of the week at Value Investing News:

1. Walter Schloss Collection
   Inspired by the Walter Schloss: 16 Golden Rules For Investing, I thought i would share my little collection that I have found over the past 2 years or so. A hat tip goes out to Mr. Market Blog for compiling all this great information.
2. 5 Great Companies to Research This Weekend
   Looking for some companies to research this weekend? Here are five that I like. Each passes the ModernGraham tests for the Enterprising Investor, based on the teachings of Benjamin Graham.
3. 10 Stocks Taking Their Dividends Up A Notch
   There have always been great companies that stand head-and-shoulders above their peers and the competition. Just as all great companies have have something in common, great dividend companies also have something in common.
4. Face-Off: Pharmaceutical Distributors
   MagicDiligence puts 3 competitors, all Magic Formula stocks, up against each other in this face-off of pharmaceutical distribution companies.
5. 3 High-Yield Telecom Dividend Stocks
   Adding a degree of risk to your income portfolio can potentially boost your returns. Obviously, this needs to be kept in check because many (most?) risky investments never pan out. So instead of a boost in return, the risky investments end up being a drag on your portfolio.
6. Is now the time to sell your dividend stocks?
   The strong bullish move off of March 2009 lows has lifted many stocks, thus creating large unrealized paper gains for many dividend investors. While prices have enjoyed a steep run-up, dividend yields, which move inversely to prices, have declined in the process.
7. Evan Davis of BBC Talks With Warren Buffett
   BBC’s Evan Davis conducted a great interview with Warren Buffett. I thought it was an entertaining interview in which multiple subjects were covered such as investing, taxes, crisis , derivatives, etc..
8. David Sokol: Looking More Like Buffett’s Successor
   David Sokol appeared on CNBC this morning and commented on a variety of topics. It appears that Mr. Sokol is not only taking on more operational responsibilities at Berkshire Hathaway subsidiaries but is also appearing in public more often and commenting on a wider range of topics.
9. Ideas from the 2009 Value Investing Congress New York
   Investment ideas from the 5th annual Value Investing Congress in New York. Includes stock ideas from Bill Ackman, Whitney Tilson, Alexander Roepers, Julian Robertson, David Einhorn, David Nierenberg, and more.
10. The Financial Crisis as a Symbol of the Failure of Academic Finance?
    The failure of academic finance can be considered one of the symbols of the financial crisis.

Be sure to check out the new Tools and Community drop down tabs on the home page of Value Investing News. Have a great weekend!

This past Monday top value investors from across the country gathered in New York to discuss their investment ideas at the 5th annual Value Investing Congress. I was planning to attend, but some unforeseen events back at home prevented me from traveling to New York. Thankfully, since I was registered for the event, I have access to all the presentation slides. I read through all the presentations yesterday and here are the investment ideas that were shared at the conference.

David Nierenberg of the D3 Family of Funds discussed Brooks Automation (BRKS) management turnaround. A similar process is underway at Move Inc. (MOVE). Nierenberg sees the potential for MOVE to go up by 3.5 times or more. His final pick is Heartland Payment Systems (HPY). Nierenberg believe Heartland Payment Systems has exemplary governance and management, but has faced other challenges including a security breach of their processing network and the forced sale of the CEO’s stock position in the company. Here he sees the potential for the stock to go up three fold.

Sean Dobson of Amherst Securities Group discussed investing and distressed RMBS securities. See Todd Sullivan’s video on Wall Street Media for more details on this excellent real estate presentation.

David Einhorn of Greenlight Capital is investing for inflation. He has bought gold via the ETF SPDR Gold Shares (GLD) and he is now buying physical gold, which he now favors over the ETF.  Einhorn said, “Gold does well when monetary and fiscal policies are poor and does poorly when they appear sensible.” Einhorn considers his gold position a better alternative to holding cash. David Einhorn has also bought long-dated options on much higher U.S. and Japanese interest rates. He noted that the options in Japan are particularly cheap because the historical volatility is so low. I prefer options to simply shorting government bonds, because there remains a possibility of a further government bond rally in response to the economy rolling over again. You can read a complete transcript of his presentation titled, Liquor Before Beer… In the Clear by clicking on this pdf link.

Joel Greenblatt of Gotham Capital discussed Formula Investing, his new online management venture. His investment ideas are really the current picks of the Magic Formula.

Julian Robertson of Tiger Management did not prepare a presentation, so I’m not certain exactly what his recommendations were.  According to what I’ve read, Robertson is still bullish on Mastercard (MA) and Visa (V). His more recent picks include Intel (INTC) and Google (GOOG). He is also bearish on the UK Pound Sterling and bullish on the currencies of Norway, Czech Republic, and New Zealand.

Lloyd Khaner of Khaner Capital Management shared several turnaround examples. The first one was Molex, Inc. (MOLXA) with a one-year turnaround. The second example was Praxair, Inc. (PX) with a three-year turnaround. The final past example was Campbell Soup Co. (CPB) that is approaching the end of a five-year turnaround. Finally, Khaner shared his recent turnaround play, Starbucks Corporation (SBUX), where he expects a one-year turnaround.

Candace King Weir & Amelia F. Weir of Paradigm Capital Management gave a presentation on bottom up stock picking. They favor small cap stocks and also mentioned the specialty retail sector.

Paul Isaac of Cadogan Management  shared his pick, Waste Management (WM). He called it “the Michigan J. Fox of the Large Cap Market.”

Jason Stock and William Waller at M3 Funds discussed opportunities in banks and thrifts. One of their favorite long ideas is Beneficial Mutual Bancorp (BNCL). It is trading at 79% “fully converted book value.”

Kian Ghazi of Hawkshaw Capital Management presented a detailed analysis of Core-Mark Holding Company (CORE). Ghazi valued the stock at between $45 and $50 per share with a potential upside of 50 to 70 percent.

Eric Sprott of Sprott Asset Management recommended Norseman Gold PLC (ASX: NGX), Corridor Resources (TSX: CDH), and Sensio Technologies (TSX-V: SIO).

Alexander Roepers of Atlantic Investment Management provided a case study on The J.M. Smucker Company (SJM). His12-month target price for Smuckers shares is $74, based on 12x EV/EBIT on FY2011 estimates.

Whitney Tilson and Glenn Tongue of T2 Partners presented more grim mortgage numbers. Their stock ideas included shorting the homebuilders via the iShares Dow Jones US Home Construction ETF (ITB) and going long shares of Iridium (IRDM).

Zeke Ashton of Centaur Capital Partners recommended Alleghany (Y). He values the shares at $340-345 using a sum of the parts valuation. Ashton’s second pick was Lab Corp (LH). He assumes that if the market assigns a 15-17X FCF multiple, LH is worth $95-105. Ashton’s final pick was MVC Capital (MVC). It is trading to at a 45% discount to net asset value, but there could be some significant risks.

Bill Ackman of Pershing Square presented on Corrections Corp of America (CXW). He believe it’s worth $40-$54 per share. Ackman also followed up on his short idea Realty Income (O) which he presented on October 6th at the Great Investors’ Best Ideas symposium.

I hope to follow up on several of these investment ideas over the next few days.

Disclosure: I do not own shares of any of the stocks mentioned in this article at the time it was posted.