Saturday, December 20, 2014

Richardson Electronics: Dividend Paying Net-Net

Richardson Electronics trades for less than its conservatively calculated liquidation value. Richardson Electronics is cash flow positive for the trailing 12 months. Catalysts include: A microwave deal with the Chinese government potentially worth $100 million in sales (FY 14 sales were 138 million) over four years. Management's interests are aligned as they have a substantial equity position in the company, they have shown this by opportunistically repurchasing shares. Investors are paid to wait as the company pays a reasonable dividend. [More on seeking alpha...]

Sunday, December 7, 2014

Safeway and the Consequences of Large Share Repurchases

Below is an article I wrote at the beginning of 2013.  Safeway is being merged with Albertson's.  Under the terms of the agreement Safeway shareholder's will get $32.50 per share in cash. They will additionally get an additional pro-rata distribution of the net proceeds for the sale of some of the company's assets. These were valued at roughly $3.65 back in April.  This represents a premium of 136% since I recommended the stock.

Safeway (NYSE:SWY) has bought back a massive amount of its own stock over the past couple years. Repurchases since the end of 2010 have totaled 134 million shares (currently there are 239.6 million shares outstanding) at an average price of $21.13. Most of the repurchasing activity was concentrated in late 2011 and early 2012.[More...]