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Category : Stock Ideas

A New Beginning

Forestar Announces CEO Transition, Management Promotions and Board Retirements  ************************  September 28, 2015 06:45 AM Eastern Daylight Time AUSTIN, Texas–(BUSINESS WIRE)–Forestar Group Inc. (NYSE: FOR) today announced that James M. DeCosmo, President and Chief Executive Officer, stepped down September 25, […]

If You Lacked a Reason to Hate Proxy Advisory Firms Before Today, Here is the Last Straw

Related: Plus ça Change, Plus C’est La Même Chose.; The Fire is Burning Leading Proxy Advisory Firms ISS and Glass Lewis Recommend OM Group Stockholders Vote “FOR” the Merger Transaction with Apollo Affiliated Funds in Partnership with Platform Specialty Products […]

The Fire is Burning – OM Group Continued

Related: Plus ça Change, Plus C’est La Même Chose. ************************ The following is a letter by Wynnefield Capital Management to fellow shareholders of OM Group (OMG), released June 11, 2015: ************************ Wynnefield Capital Management, LLC 450 7th Avenue, Suite 509 […]

Plus ça Change, Plus C’est La Même Chose.

(Translation: Another Weasel-like Deal Where Public Shareholders are Sold-Out.) The topic for today is the deal announcement on May 31st that the OM Group (NYSE: OMG) decided to sell itself to the private equity firm Apollo Group for $34 a […]

Further Thoughts on the Merits of Buybacks

by Rohan Rangaraj | Research Analyst One of the official Favorite Books in the Cove Street Capital Library is The Outsiders by William Thorndike, an in-depth study of eight of the last half-century’s greatest CEOs in terms of value creation. […]

50 Shades of Grey, the G-rated Version

From time to time I have embarrassing moments, like admitting I have read L.J. Rittenhouse’s book, “Investing Between the Lines: How to Make Smarter Decisions by Decoding CEO Communications.” This was a fairly simplistic read on a 2 hour flight […]

The Reluctant Warriors

A friend of ours who works for a well-known activist firm summed it up perfectly when he said, “We are living in the era of the activist halo.” From 300-page PowerPoint presentations to incredible revelations about the amount of salt […]

What a Phony, Part II

Click here for Part I: The Worst Piece of Corporate BS, 2/11/2013 A recent article in the Wall Street Journal penned by Michael Dell is so full of self-serving garbage it is difficult to know where to start. (Click here to go […]

Leading Candidate for Worst Sell Side Piece in 2014

In regard to Tesla… Having defended our more cautious stance for over a year, we find ourselves torn in upgrading as it is clear substantial risks remain. This is, in part, given (1) the lack of available data to question […]

More Corporate Governance Weirdness

The “Entertainment Business” is well known for having a callous disregard for other people’s money. The origins of Live Nation (LYV) and some of the Board principals involved—current and former—include some of the more egregious examples we’ve seen in our […]

If Invited, I Shall Serve — A Rock and Roll Update

by Jeff Bronchick | Chief Investment Officer Fender tried to go public in 2012. It failed and here is why. In how the world should work, the prevailing private equity investors bit the bullet and raised new capital at levels […]

Tessera: Our Vote is In

Our premise is simple: we bought Tessera because the stock was cheap and we received nearly free optionality on either the development of a new technology or improvement in the managing of the core business.  In a very short period […]

Ben Claremon and the Great White North

Under normal circumstances, the prospect of leaving sunny Southern California to travel to a place where the day-time temperature encourages the wearing of fur is not particularly appealing. But I decided this year to make the slog to attend Fairfax […]

Proxy Season and the Unusually Juicy Soap Opera at Tessera

We own Tessera at a cost of approximately $16 per share. Our thought process was simple: a conservative analysis of their IP portfolio’s current cash stream plus cash on the balance sheet suggested a valuation of $15 per share, leaving […]

Hello Ruby Tuesday

A few weeks ago, Cove Street was asked to present a small cap stock idea for the 2013 Small-Cap Investing Summit. Our analyst Ben Claremon chose to discuss the investment thesis for Ruby Tuesday (RT) and created the attached presentation. Despite […]

The Worst Piece of Corporate BS

The proposed management buyout of Dell is an abomination of corporate governance and decency on an extraordinarily large scale. While we have been too busy losing money in Hewlett-Packard to own Dell shares, I will take the liberty of being […]

What Were We Thinking—Central Garden and Pet

Central Garden and Pet (CENTA) has been in and out of the portfolio several times over the last eleven years with results varying from stunning (a 6-bagger from the 2002 lows) to a lot less than that (repurchased the stock […]

Jefferies: Possible Postscript

Funny things often happen on the way to the bank. It is also fair to say that sometimes you never reach the bank, or you end up taking a cab when you thought you were walking. Where this fits with […]

Cove Street Capital Calling

Despite twenty-eight years in the investment management industry and the natural cynicism that comes with experience, I nonetheless retain the ability to be amazed at what can pass for normalcy in the full light of day. Case in point is […]

Now About that Factory Tour…

Following last week’s Fender post: Why Fender Pulled Its IPO

Buy a Used Guitar, Not the Stock

In my analytical career, there is a laundry list of things I have studied for investment purposes, including such topics as life insurance, cement, pet products, pension accounting, high speed disc couplings, polymers, mattresses and urea. So it has only […]

The Active Management Pretend Game

by Eugene Robin  |  Research Analyst, Cove Street Capital Let us start by saying that this is not an essay on whether or not a large pool of institutional asset allocators should consider an indexing strategy or not. What follows is […]

Everything Turns Grey: Chesapeake

by Eugene Robin  |  Research Analyst, Cove Street Capital   The title of this blog post borrows a line from an Agent Orange song that I loved listening to when I was growing up. I think it encapsulates the argument currently […]

What We Are Thinking: Approach Resources

by Eugene Robin Approach Resources, Incorporated (AREX: NASDAQ) is an independent oil and gas exploration company located in west Texas. As a spinout from energy private equity firm Yorktown Partners, Approach situated itself on land that was, at the time, […]

Trying This at Home

We reprint with permission a recent email from a sell-side colleague who we hold in high regard, despite his familiarity with the institutional investment consulting industry (laugh here). Like any number of experienced investment people, he has seen a lot […]

Explaining Ourselves: Jefferies

So, we have very recently been a buyer of Jefferies (JEF: NYSE) stock, which anyone following the financial headlines would know has been pummeled in recent months. It was during this evisceration that we took our initial position…and then bought […]

Terrific Value – Long Road

SEI Investments _________________________________________________ The opinions expressed herein are those of Cove Street Capital are subject to change without notice. Past performance is not a guarantee or indicator of future results. You should not consider the information in this blog a […]

Yahoo and Jack Ma

Only somewhat facetiously, I wonder out-loud why Jack Ma was not arrested at the US border last week when he spoke at The Wall Street Journal’s All Things Digital Conference. On a massive and very public scale, he is conveying […]