Owner: ryanhegs.com - Huge Profit, Little Risk URL:http://www.ryanhegs.com Join Date: Tue, 31 Jul 2007 19:59:16 -0500 Rating:0 Site Description: This blog is perfect for anyone with a few hundred or a few thousand dollars to invest. This blog uses arbitage opportunities in small companies to make profits with little risk. Topics of business, marketing, and technology are also discussed. Site statistics:Click here
Applebee’s Anyone? No Thanks. (APPB) 2007-09-06 22:36:22 Applebee’s and IHOP may be merging! Interesting combination! This poses a small arbitrage situation similar to the opportunity with Monarch that I wrote about on September 3. At this time it isn’t a good enough deal for me to jump in, but since it’s a company most everyone has heard of, and since I don’t have a better deal for you (yet), I thought I’d bring it to your attention.
According to a preliminary proxy statement dated September 6, 2007, if the merger goes through Applebee’s will shares will be bought at $25.50 per share. It is currently trading at $24.89, but it has been as low as $24 even in the last few months. I imagine that the stock will hang just below $25 because of the news. If it happens to drop it may be worth considering. You’ll find an excerpt from the PREM14A below:
At the special meeting, you will be asked to adopt the agreement and plan of merger, dated July 15, 2007, among Applebee’s, IHOP Corp. (“IHOP”) and CHLH Read more:Anyone
, Thanks
Some Potential in Monarch (MCBF) 2007-09-03 00:37:35 On October 9, 2007 stockholders of Monarch
Community Bancorp (MCBF) will vote on whether to approve the merger of MCBF into Monarch (MCBF is currently a wholly-owned subsidiary of Monarch). According to a DEF14A filed on August 30, 2007, if the vote is in favor of the merger those with fewer than 1,000 shares will have their shares bought at $13.50 per share. MCBF is currently trading at $12.26 per share. So an arbitrage situation is present. Unfortunately, at this time it isn’t as profitable as I would like. If the price of MCBF were to decrease substantially it may be more lucrative. We will keep our eyes on this…actually, it may not hurt to pick a price that you would find this deal worthwhile and put in a limit order now. The details from the DEF14A are below:
A special meeting of stockholders of Monarch Community Bancorp, Inc. will be held at 5:00 p.m. on Tuesday, October 9, 2007, at Monarch Community Bank’s Main Office at 375 North Willowbrook Road, Coldwater, Mich Read more:Potential
Free Link from John Chow 2007-09-02 23:47:50 Here’s a great opportunity to increase your page rank. Write a review of John Chow’s blog and include a link to his home page as well as a link to this article and he will link back to your blog. Read the instructions carefully.
John Chow is a dot com mogul who can help you make money online.
Chapter 2: Flattener #3 2007-09-02 23:04:34
The World Is Flat: A Brief History of the Twenty-first Century - Thomas L. Friedman
Chapter
2: The Ten Forces That Flattened the World
Flattener #3
Work Flow Software
…the rise and integration of work flow software was a quiet revolution that most people had no clue was happening. It crystallized in the mid-to late 1990s and, when it did, it had as profound an impact on the world as the first two flatteners. It enabled more people in more places to design, display, manage, and collaborate on business data previously handled manually. As a result, work started to flow within and between companies and continents faster than ever.
-page 78
The first breakthrough in work flow was the PC and email. The next was the usage of standard protocols for the transfer of information between any computer, anywhere. Such standards include HTML, HTTP, TCP/IP, XML, and SOAP. Other standards also developed, such as JPEG as the standard for images and PayPal for online payments. AJAX (asyn
Two Arbitrage Opportunities (CNFL & MEDRF) 2007-10-12 23:31:59 The first thing on my recent “to-do list” was to pick up my hunt for decent arbitrage opportunities. After sifting through the last 2-3 weeks of SEC Filings (I’ll discuss my method at a later date) I only came up with two that were intriguing.
The first is Medaire Inc. (MEDRF). In a recent PRE 14C they announced a 1:5,000 reverse stock split with fractional shares being purchased for $1.11 per share. At the time the stock was trading near $1/share. If the shares could be purchased at $1.00 then you’d be looking at a 10% profit on up to $5,000 in a matter of months. At this time the stock is trading at $1.05, cutting the profit down to about 5%. So…depending on the price you can purchase the stock it may be worth while.
The second opportunity, and in my opinion the better of the two, is Citizens Financial Corp. (CNFL). In this going private transaction, as described in an 10/4/07 DEF 14A, Citizens will be doing a 1:250 reverse stock split with fractional s Read more:Arbitrage
, Opportunities
Note to Self 2007-10-03 22:53:42 Well, life has been a little too hectic lately to keep this updated. Here are a few notes to myself, or a “to-do list”, to keep me accountable.
1. Research SEC records from the last 2-3 weeks to find arbitrage opportunities.
2. Research ABX (Barrick Gold Corp.) and other ways of investing in Gold.
3. Reserach ATHN (Athena Health) and compare with MDRX (Allscripts), which I currently own. Athana Health is very similar to Allscripts except that it is web-based. I think that this may be a better service since web-based applications are growing trend and offer more flexibility. ATHN’s IPO was September 20 and was offered at $18 per share. It is trading over $30 a share. I need to look at the financials and see if I want to get in and when.
4. Catch up on my summary of “The World is Flat” (I’m currently summarizing chapter two, but I have just about finished reading the book).
5. Share what I’ve learned in my online class “The Analysis and Val
First Time: Stock Sold at a Loss (ERGN) 2007-10-17 08:55:30 Today I sold my first stock at a loss. I purchased 199 shares of ERGO, now ERGN, on January 8, 2007 for $0.88 per share. This was an arbitrage play that should have netted a $240 profit; however, my timing was off by a day or two so I missed the split (get the details in my post You Can’t Win Them All). After missing the reverse/forward split the price of the stock dropped. Even though this was not a stock I was interested in holding for the long term I was too proud to sell it at a loss. I put in a limit order to sell the stock for enough to break even or make a small profit after commissions. Well, after nine months I decided that I’d be better off selling the stock at a loss and re-investing the money elsewhere. So I ended up selling my 199 shares for $0.78, 10 cents less than the purchase price. With most of my money tied up in other stocks the extra cash from this sale allowed me to place an order on more shares of CNFL. Read this post to find out more about the CNFL a Read more:First
, Stock
, First Time
Bought 249 Shares of Citizen’s Financial (CNFL) 2007-10-30 10:05:28 In a previous post I outlined the arbitrage opportunity present in Citizen
’s Financial
(CNFL). Today I purchased my 249 shares for $6.66/share. I started my offer at $6.50 and as the date of the going private transaction neared a slowly increased my limit offer until it was taken. So now I will wait for the vote and the reverse split. If things go as planned my 249 shares will be bought for $7.25/share, netting me a $149 profit in a matter of months. Please read this post to understand the reasoning behind this purchase.
Sold Half of China (CHN) 2007-10-30 09:51:05 I purchased The China
Fund Inc. (CHN) for $28.56 on 3/28/06 (read rationale). In the following year and a half the ETF has done extremely well. Due to my concerns that China may be experiencing a bubble with overvalued companies I put in a limit order to sell half of my shares when the price reached double my purchase price. Yesterday, 10/29/07, I sold half of my shares for $52.85/share. This means that all of the money I invested in the fund I have received back…and I still own half of my shares! I am pleased with my first “two-bagger” and hope there are more to come!
Sold All Shares of Microsoft Today (MSFT) 2007-10-26 22:35:14 I purchased shares of Microsoft
(MSFT) at $27.02 on 3/29/06 (read rationale). A year and a half later, with competition from Apple and web-based software applications as well as a lack-luster Vista and Zune release, I had my doubts about whether this was a stock I wanted to hold for the long run. To give Microsoft credit, they have done some great things with the XBox, Live, AdCenter, etc. So with these thoughts I set a limit order to sell my shares a week ago. I set it at $34 and change (at the time it was trading at $29). After earnings came in ahead of estimates the stock price jummped near $36 this morning. I was fortunate and my shares were sold for $35.92, giving me around a 30% gain on the stock in a year-and-a-half. I am pleased; however, I am still quasi-interested in Microsoft and will continue watching it and do some more research. I may pick-up some shares again when the hype cools down and I feel that it is trading at a more attractive price.
Read more:Today
Companies I am Interested In (Value) 2007-11-06 23:15:47 A recent issue of Forbes Magazine featured “Americas 200 Best Small Companies
”. I used their list of 200 companies and the data included to search for stocks that I think would be good investments. I first went through the list and read the short description of each company. Any time I came across a company that sounded good to me - provided a good or service that made sense to me and sounded like something that would be needed given my very limited understanding of the global economy. This part was purely subjective. After creating a list of several dozen companies, I looked at the financial info that was given - primarily the P/E ratio. I was looking for companies that appeared to be relatively cheap, so I eliminated any company with a P/E ratio over 20. This narrowed my list to about 20 companies. Next I looked into the other financial information that was given (5 year average EPS, Sales, ROE, etc). This information helped me narrow my list to 8 companies. Once I had go Read more:Value
A quick $300+ with CB Financial (CBFJ) 2007-11-05 22:00:32 Looks like CB Financial
is planning to vote on a 1:132 reverse split in the near future. If the vote is in favor of CB Financial going private, all shareholders holding less than 132 shares will have their shares bought for $20/share. Currently CBFJ is trading at $17.50/share. 131 shares x $2.50 (the difference) = $327 profit before comissions. As always do your own homework and check out the details for yourself before making any trades.
Link to the PRE 14A
Chapter 2: Flattener #6 2007-11-08 23:16:40
The World Is Flat: A Brief History of the Twenty-first Century- Thomas L. Friedman
Chapter
2: The Ten Forces That Flattened the World
Flattener #6
Offshoring: Running with Gazelles, Eating with Lions
First the difference between Outsourcing and Offshoring:
Outsourcing means taking some specific, but limited, function that your company was doing in-house—such as research, call centers, or accounts receivable—and having another company perform that exact same function for you and then reintegrating their work back into your overall operation.” Offshoring, by contrast, is when a company takes one of its factories that it is operating in Canton, Ohio, and moves the whole factory offshore to Canton, China. There it produces the very same product in the very same way, only with cheaper labor, lower taxes, subsidized energy, and lower health-care costs.
-Page 137
China began progressing toward capitalism in 1977. At first China was viewed as an opportunity for exports; however,
Chapter 2: Flattener #5 2007-11-08 22:54:08
The World Is Flat: A Brief History of the Twenty-first Century- Thomas L. Friedman
Chapter
2: The Ten Forces That Flattened the World
Flattener #5
Outsourcing
Back in 1951 India setup its first of seven Indian Institutes of Technology. These IIT’s produce highly skilled workers; however, for years these workers had to leave India to become professionals. It wasn’t until the late 80’s and early 90’s that companies (GE being one of the first) began to realize that they could utilize Indian talent in India.
One event that led to a great increase in the outsourcing of work to India was Y2K. The computer work involved in preparing millions of computers for the new millennium required a lot of tedious work by software engineers. Companies quickly realized that they did not have the manpower to devote to this…but India did! This outsourcing proved to be a significant flattener.
India benefited both from the dot-com boom and the dot-com bust:
The boom laid the cable that co
50% + Profit in Orion Healthcorp (ONH) 2007-11-08 22:09:00 Orion Healthcorp (ONH) is proposing a 1:2,500 reverse/forward split. It the split happens as written, all fractional shares will be bought for $0.23/share. Orion is currently trading at $0.15/share. So there is a possibility of an 8 cent profit per share on a 15 cent per share investment. Not too shabby. The only problem that I ran into was that Scottrade would not allow me to place an order on this stock without calling them (which probably means an extra $15+ fee to make the trade). Is it worth it? Probably, since a $375-$400 investment will likely become $575 in a matter of months. Will I do it? Maybe, I guess I’m a little embarassed to call and place an small order on a 15 cent stock.
Read more:Orion
Citizen’s Financial Update (CNFL) 2007-11-15 21:56:58 My 249 shares of Citizen
’s Financial
(CNFL) were moved out of my account today. That means that things were successful and are moving along. It is only a matter of time before the cash is transferred into my account. What an easy way to make a quick $150! Read the following two posts to know what I’m talking about:
When I first pointed out the arbitrage opportunity.
When I made the purchase.
Read more:Update
66%+ profit opportunity with Harold’s Stores (HLDI) 2007-11-15 21:50:08 On 11/13/07 I purchased 999 shares of Harold
’s Stores (HLDI) for $0.18 a share. Why? Because according to their most recent definitive proxy statement, on December 6 they will be voting on a 1:1,000 reverse/forward stock split with fractional shares to be paid out at $0.30 per share for every pre-split share. This means that in just over a month I will make a 66% profit
on my investment (as long as shareholders vote in favor of the split). I originally attempted to purchase the shares when they were around 15 cents, but due to a positive quarterly report the price went up a bit. So I will have to settle for 66% instead of 100%. There is still time to get in on this one. Just “do your own due diligence” before any transaction.
Arbitrage: Citizen’s Bancorp (CZBC) and Altrust Financial (ATFS) 2007-11-18 23:03:23 Citizen’s Bancorp (CZBC) PRER14A on 11/15 states that those holding fewer than 250 shares will have their shares bought at $23.50/share. CZBC is currently trading at $20. This would yield around a 20% profit.
Altrust Financial
(ATFS), according to a PREM on 11/14/07, will buy shares back at $17.25 if you hold fewer than 6,400 shares. AFTS is currently trading at 15.50/share. This transaction would make an 11% profit on an investment of up to $99,000.
Read more:Arbitrage
, Citizen
A Perfect Mess - Introduction 2007-12-03 23:33:37 A Perfect
Mess - Eric Abrahamson & David H. Freedman
A Perfect Mess begins with an example of two magazine stores located across from each other on Broadway. One store is highly organized and uses software to track how many magazines are sold and what needs ordered. The other is much less organized, with magazines scattered. The organized store sells many more magazines; however, the less organized store is the one that survives. The reason is that even though the more organized store had more sales, the sales did not make up for the added expenses of computer software and man-hours to keep things in order. This example shows that “there are often significant cost savings to be had by tolerating a certain level of messiness and disorder” (5).
Though it flies in the face of almost universally accepted wisdom, moderately disorganized people, institutions, and systems frequently turn out to be more efficient, more resilient, more creative, and in general more effective tha Read more:Introduction
JLN, MGST, & TOAK - Thanks commenters! 2007-12-20 23:27:51 I’d like to thank two readers, Ian and Mat, for pointing out a few more arbitrage opportunities.
From Mat:
JLN - according to a recent 8-K it appears that Jaclyn (JLN) is in the early stages of planning to go private. Their tentative plan is a 1:250 reverse split with fractional shares being bought at $10.21/share. JLN is currently trading around $6/share. This would be an awesome opportunity, but at this stage there is a lot of risk as a date has not been set and they could change the conditions of this transaction at any time. Definitely one to watch!
From Ian (in his words):
Treaty Oak Bankcorp (TOAK): Less than 2500 shares for $11 per share. The current ask is 10.50. It was at $9.50 a little while back so I'd hope it goes back down.
Magstar Tech (MGST): Less than 2000 shares at $.425 per share. It's currently at around $.25, but it was at $.15 a little while ago.
I currently am trying to buy MGST. Had a limit order at $0.17 today. Someone else got in at $0.15 and then the Read more:Thanks
Bought Critical Path (CPTH) 2007-12-20 23:14:09 In my last post I pointed out an arbitrage opportunity with Critical Path (CPTH). I put in a limit order for 13,000 shares (about $1,000 worth) earlier this week for $0.076. The order was completed today. I’ll have to wait longer than I’d like as they haven’t announced the date of the vote yet, but I should pocket over $300 after commissions.
Critical Path (CPTH) Arbitrage Opportunity 2007-12-16 12:33:40 According to this 8-K, Critical Path (CPTH) is entering into a merger to take the company private. If the merger takes place it looks like it will happen in the spring of 2008. So there is definitely time on this one. If all goes according to plan shares will be bought back for $0.102. The stock is currently trading at $0.08/share. This could yield a profit of over 25%. My only concern is that we are dealing with several months before this happens and the merger isn’t exactly a done deal. I may see if I get lucky with a bid lower than the current market price. It is a 1:70,000 reverse split…so there is the potential to make a good chunk of money if you are willing to risk a good chunk of money.
Read more:Opportunity
, Arbitrage
Harold's Stores (HLDI) Update 2007-12-16 11:49:47 According to a December 6, 2007 Schedule 13E3 by Harold
’s Stores, shareholders voted in favor of a 1:1,000 share reverse split. My 999 shares (that I bought for $0.18/share) should be redeemed for $0.30/share very soon. This is a 66% profit in a matter of months. Another easy $100+!!
More information on my Harold’s Stores transaction.
Read more:Update
Citizen's Bancorp (CZBC) Shares Purchased 2007-12-16 11:38:18 I purchased 72 shares of Citizen
’s Bancorp for $20.55/share on December 12, 2007. Due to the low trade volume, this was the maximum number of shares that I was able to purchase before the December 18 vote. If the vote is in favor of the reverse split then my shares will be bought back for $23.50/share. This should give me a quick $200 profit. The following post explains more about the CZBC Arbitrage Opportunity.
Citizen's Financial - Cash Received! 2007-12-16 11:31:16 On December 12 over $1,800 was transfered into my Scottrade account for the redemption of 249 shares of Citizen
’s Financial
(CNFL). This arbitrage oppurtunity gave me an 8% gain (or about $140) on a $1,665 investment in just a month and a half. Read these posts to learn more:
When I first pointed out the arbitrage opportunity.
When I made the purchase.
Stock Transfered Out of Account.
MGST Cash Received! 2008-03-01 22:07:41 Friday, February 29, I received the $849.57 in cash for my 1,999 shares of MGST ($0.425/share). I purchased MagStar Technologies (MGST) for $0.28/share back on December 28, 2007. That is a 50% profit in just over two months!
MagStar Technologies (MGST) Delivered Out! 2008-02-07 19:53:20 My 1999 shares of MagStar Technologies (MGST) were delivered out of my Scottrade account today. I purchased 1999 shares of MGST for $0.28/share in late December. I should be receiving $0.425/share very soon. This will be a profit of about 50% (just under $300). Read more:Delivered
Scottrade Cashed-Out Harolds Stores (HLDI) 2008-01-31 23:03:42 Thursday, January 31 Scottrade cashed-out my 999 shares of HLDI. It seemed like a long wait, but it was worth it. I purchased my shares for $0.18 back in November. After 2.5 months I’ve made a 66% profit! This certainly wasn’t as smooth as many of my previous arbitrage plays, but I can honestly say [...]
Chapter 2: Flattener #7 - Supply-Chaining 2008-01-30 23:37:35 The World Is Flat: A Brief History of the Twenty-first Century- Thomas L. Friedman
Chapter
2: The Ten Forces That Flattened the World
Flattener #7
Supply
-Chaining: Eating Sushi in Arkansas
Friedman points to supply-chaining as the seventh force that flattened the world. He defines supply-chaining as “a method of collaborating horizontally–among suppliers, retailers, and customers–to create value” (p. 152). [...]
Peoples Bancorp (PFDC) Going Private 2008-01-28 23:21:06 Peoples Bancorp (PFDC) is considering a 760-1 reverse split with fractional shares paid-out at $16.75/share. PFDC is currently trading at $14.84/share. HOWEVER - this will only be at the record level - shares in street name will not be cashed out. In order for this to work you would need to become a shareholder of [...] Read more:Peoples
, Going
, Private
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