Tuesday, April 18, 2006

Hit #90

Warrent Buffett's Berkshire Hathaway announced today that it is acquiring sports apparel/footwear maker, Russell (RML) for $580 million in cash.

I had mentioned Russell as a candidate in this post following rumors of a J. Jill takeover (which did materialize later). I did end up buying some shares, just last week!

The offer, of $18/share is a 30.53% premium to my average cost of $13.79/share. The offer still undervalues the company. While a Buffett deal is done only on friendly terms, I believe there is room for a better price for investors. I do hope that fund owners object to this bid on price.

Update: Recent filing shows that the CEO opposed the sale and felt that the company would be a lot more valuable given more time. But the Board seemed to have made up its mind. Who cares what shareholders think!

Two other similar potential candidates I mentioned here and here, are still worth buying. They are Cutter and Buck (CBUK) and Ashworth (ASHW). I bought a few CBUK recently and will be considering buying some ASHW soon.

A few recent IPOs also seem like good investments, provided you don't mind paying a bit more and you are ready to buy more on any pullbacks. These are mainly growth stories, and eventual takeover targets. They are Under Armour (UARM), Volcom (VLCM) and Crocs (CROX).

Previous hit - Portal (#89)


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