Monday, October 09, 2006

Hit #117 (CNS)

Nasal strip maker, CNS Inc. (CNXS), is being acquired by GlaxoSmithKline for $566 million in an all-cash deal. The offer, of $37.5/share, represents a gain of 220% over my average cost per share of $11.69.

To give credit where it is due, this company was first brought to my notice by Motley Fool's Hidden Gems newsletter, the only content on TMF worth paying for. I did not invest immediately after that mention, but took my time looking for other factors like insider buying. CNS looked like the perfect takeover candidate, though the one trick pony nature of the business made it risky. Such naturally strong takeover candidates are rare.

Since I mentioned the Hidden Gems newsletter, there is one more item in there that I would recommend to those who have a stomach for volatility and lots of patience - the Tiny Gems section in the newsletter. There are some great long term winners there, if you follow a disciplined approach to add on dips, and never overpay.

Previous hit - Maritrans (#116)


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