New Investment – Produce Investments Limited – Cheap Potatoes

Produce Investment (PIL.L) is a vertically integrated potato farmer.  They grow and process potatoes for major supermarkets.  In particular, they produce Jersey Royal Potatoes.

They trade at a forecast PE of 6.  They have a free cash flow yield of about 10%.  The net tangible asset value is about £35m against a market cap of £40m.

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Closed Emergent Capital – 12% loss

Frustratingly changed my mind on Emergent Capital. original post here.

I’m concerned about debt level / lack of liquidity and the fact the company has 9 months (approx) opex on hand.  I wasnt right about my initial belief red falcon had liquidity available – I’d misread the statement.

There is an opportunity with the strategic alternatives process for this to do very well but re-reading this – the possibilities are not all are positive.  It has also now been over 3 months – should have been done.

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Closed Trump Trades – Frustrating minor Loss

Just closed all Trump Trades – Short S&P, Long gold / Long silver, Total Loss of 0.45% Total Capital.

Very frustrating to anticipate this correctly then not make any money.  Still it is all experience.  Should have been much quicker in taking profit rather than running and also stayed up to watch conciliatory victory speech / set an alert or limit…

I am amazed market has more or less rallied to where it was the day before following one of the biggest political upsets in the last 100 years.

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Trump Trades – Short S&P500, Long Gold / Silver, Currency trade TBD

This is a simple bet.

If Trump gets in, at least for the first week S&P down 10-15%, gold up 10%, USD down 5-10%, I also think bonds could surprise on the downside.  Then the markets realise he actually has very little power and everything goes back up again – if the president had power Obama would have achieved more.

If Hillary gets in very little happens, up 5% maybe, tops… Trump supporters could start civil disobedience if they think the election was stolen – in which case we go down a touch and I win anyway.

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New position Emergent Capital EMG 100%-150% upside

Just bought some Emergent Capital at $2.90 a share (yet another truly awful fill) -7.4% portfolio weight EDIT 8/11/2016 *Cut to 3.7%*.  This, in essence is a portfolio of life insurance policies.  It is trading at a market cap of about $76m.  The NAV is $220m so there is the potential for a near tripling in value.

This has been written up on Seeking Alpha and in the Value Investor’s club.  I havent read the Seeking Alpha one (no subscription).

The key facts are:

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$SMIN – selling half @1419 +50% profit

Sold half my Smiths a few days ago…

Original post here https://deepvalueinvestments.wordpress.com/2015/12/28/smiths-industries-large-conglomerate-discount/

Price has risen about 50% making it a much less attractive idea.  They are also considering aquisitions – something I instinctively dont like.

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