Monday, January 23, 2006

Hit #77

The Sports Authority (TSA) today announced that it being acquired, in a going-private transaction, by Green Equity Investors for $1.3 billion in cash. This offer, of $37.25/share is a 67% premium over my average cost of $22.32/share.

I had bought TSA shares more than a year ago, after momentum investors started dumping the shares following evidence of slowdown in growth. Apart from what looked like a great value, some insider buying activity also provided comfort. More importantly, the secular trend towards a more active/healthy lifestyle wasn't going away.

A number of other players in the sector remain extremely attractive. Gander Mountain (GMTN) is trading at bargain levels, and has seen substantial insider buying recently. Ditto Cabela's (CAB). I own a somewhat large number of Gander Mountain shares, and recently also bought into Cabela's. I will continue buying both.

Big Five (BGFV) is also looking attractive, and it comes with a 1.4% yield to boot. I will be looking at it closely in the coming months.

Another interesting buy is Dover Saddlery (DOVR), one of the few IPOs of last year languishing in negative territory. This seller of equestrian products will be a great fit for a larger store operator.

Previous hit - Albertson's (#76)


Post a Comment

<< Home