“Risk means more things can happen than will happen.”
– Elroy Dimson
stock news
ITL Health Group (ASX:ITD) announced they sold their Custom Pack business for $14.4m & they will be in a net cash position of ~$10m post the transaction. This is interesting when you consider it currently has a market cap of around $40m and the vast majority of profits are generated from the non-disposed side of the business. Therefore, if we take last years EBITDA of ~$4.5m and assume they can maintain $4m of that, the multiple drops from 9x to ~7.5x. Given the stock has not materially moved post the announcement, it seems like there should be an arbitrage here as the multiple moves back towards 9x when the market realises the profitability has remained mostly intact. This is not financial advice and it is an assumption that most of the last years profitability should remain post the divestment.
weekly links
Time Harford discussing the psychological biases that leave us unprepared for disaster
A full collection of Michael Mauboussin’s research papers
Eric Cinnamond discussing small cap investing
The Peridot Capital discussing the recent decline in Equifax
Forager funds discussing Fallen Angels
Wylde Street on the importance of thinking in probabilities
September update from Auscap – worth reading
How the Hidden Higgs could reveal our Universe’s dark sector
September update from EGP Capital
The Intercept discovers Seth Klarman is one of the largest holders of Puerto Rican debt
20 of the most important things proposed by Howard Marks
globalstockpicking.com outlines a new spinoff investment
Everyone Lies. Dan Ariely Explains Why – Farnam Street
Horizon Kinetics discussing the role of the Active Manager:
When (not) to sell a great company?
An interesting tale of investment highlighting the importance of patience
Has the meteoric rise of passive investing generated the “greatest bubble ever”?
Buffett’s latest purchase: Pilot Flying J
Aussie retail suffers biggest two-month fall in seven years
Q3 letter from Askeladden Capital
Q3 fact sheet from RV Capital
How Smart Machines Are Creating New Business Models
Wylde Stree on the pros & cons of being an individual investor
Why is value investing so difficult?
Hugh Hendry shuts down his hedge fund – farewell letter
Rob Shiller discussing the coming bear market
Loss avoidance: The power of long-term thinking
