As you are aware, Arohan’s Investing Life has been replaced with Value Stock Guide.

Within few hours, I will be rolling out the Value Stock Guide Premium Access, a membership program where members will receive detailed stock research, analysis, commentary, dedicated value investing forums and much more exclusive content.

Prior to the Launch, I am giving away 50 free lifetime memberships for just pre-registering. There is still time and not all 50 spots are taken yet. If you are interested, just go over to the registration page and sign up.

Once you see the payment button, this opportunity will be gone

...

Read Full Article >>

For some time I have been thinking about ways to improve and make this site better for my readers. This has now led me to a conclusion that it is best if this site is retired. And replaced with something new!

Within a month or so, this site and its contents will be removed.

And thus, Value Stock Guide is born!

Value Stock Guide is the new website (with a spankin’ new domain name) where I will now be writing about value investing. As of now, VSG is still being developed and tweaked and you will see brand new articles popping up in a day or so.

VSG now features a great new look, I really love it, which should make reading and browsing a more pleasurable experience. The site will also have free and paid sections and I plan to cover more recommendations, research and personal portfolio details over there.

Hop over there and subscribe to the feed. ...

Read Full Article >>

If you have not yet signed up for the AIL Premium service, make sure you do it today.

Starting November 1st, Arohan’s Investing Life will become a members only site. Following is a list of the changes that you will see.

• All future and past blog entries will be protected and will only be accessible to registered  members
• The free feed will be removed. As a member, you can subscribe to members only feed
• The free newsletter subscribers will continue to  receive the monthly newsletter for free but will no longer receive any new articles or posts
• The 7-day free trial offer from AIL Premium will no longer be offered

Read about all the benefits that you get with AIL Premium membership. You can also sign up here before Oct 31st 2009 and receive the 7 day free trial.

To make it easy for my regular readers, I am offering a discounted membership (for 6 months) at 90% off.

As intrepid readers know, Leucadia National is one of the core holdings for the AIL Premium portfolio. And for a good reason.

Leucadia and its principles have shown uncanny ability over the years to make opportunistic investments and profit from it. Capmark appears to be a case in point, and although all is not said and done yet, Cummings and Steinberg have terrific track record to finding value in the trash heap.

Commercial Real Estate company Capmark Financial filed for bankruptcy protection today. This is not a surprise to anyone watching the mortgage industry and was widely expected. Capmark entered into a pre-bankruptcy filing Asset Put Agreement with Berkadia III LLC, where Capmark can exercise its put rights to sell certain parts of the company to Berkadia III.

As you may know, Berkadia is a 50/50 partnership between Berkshire Hathaway and Leucadia National. This is indeed not the first joint transaction that these two companies have done. Here are the basic facts about the deal:

Investors yesterday sold off on the news that Sterlite is making a convertible note offering of $500 million, convertible in the US listed ADS. Yes, convertible notes have a dilutive effect on the stock.

Yesterday I also commented that the convertible note offering is being done to finance an expansion project and as long as the interest payment on the note is lower than the return on capital the company is able to generate, one should view this as a positive value creating news and that the investors are wrong to sell off on this news.

Today the company released a little more information on the convertible note offering that supports my view.

The convertible note will pay an interest of 4% per annum and will be convertible at $23.33 per share of the ADS. Please note that the share price closed yesterday (Oct 15, 2009) at $16.62. There fore , there is 40% premium built into the conversion price over yesterday’s close. The notes are not dilutive, yet.

Trucking trends are one of the key early indicators of the economic activity. This is probably not one of the most watched indicators but it does show the economic activity in the trenches. Best of all, this indicator is as close to reflecting the revenue trends at one of our holdings as you can possibly get.

[Content protected for Premium members. Sign up now to read the full post]

Overall the trends are encouraging and while there is no guarantee that they will continue, there appears to be enough momentum gathering in the economy that one can be hopeful. If nothing else, this holding still trades at a significant discount to its intrinsic value so there is enough margin of safety left.

Post from: Arohan's investing life

[Premium] August Trends Bode Well for Trucking and One of Our Holding ...

Read Full Article >>

There are two bits of news today on one of my favorite emerging markets/commodities play. Sterlite Industries (SLT) plans to become the largest copper smelter in the world and has announced a 400 ktpa brownfield expansion project in India along with a captive power plant generating 160 MW. The project is expected to be commissioned by middle of 2011.

The total investment in this capital project is estimated to be $500 million.

Concurrently, the company also launched a $500 million convertible debt offering which will be convertible to the ADS listed on New York Stock exchange.

Commodities are in a long term up-cycle and any new capital investment projects are likely to be value creators over the long term. Primary metals like copper are critical to the growth of emerging economies. While a convertible debt offering potentially dilutes the stockholders, it is important to note that a potentially more valuable asset is being created as long as the return on capital on this project exceeds the interest on the note. Of course, this remains to be seen. The stock is selling off on the news and can be an attractive entry point.

This is a quick note for my readers to let them know that starting Nov 1, Arohan’s investing life will change to a members only site.

I have taken this decision after a lot of deliberation. The fact is that it is unfair for my Premium members if some of my content is available for everyone to read. I have been trying to separate the content between free content and premium content but it is too much work and hassle and the time can be better used to add more value to the members. Besides, this will allow me to continue to write about value investing, my enduring passion, to a committed audience, without having to worry about such distractions as SEO, Page Ranks, Advertisements, article popularity, daily visitors/pageviews, etc.

You can still read my free writings at Seeking Alpha where I will be contributing occasional original articles. To follow me on Seeking Alpha, just go to my author page ...

Read Full Article >>

Friedman Industries, Incorporated (FRD) is engaged in steel processing, pipe manufacturing and processing, and steel and pipe distribution. This is a sector that has suffered a double whammy of declining demand and a whipsawing spot market steel prices. Needless to say, the company business and the stock price has suffered too.

This is a small company in the sector and probably has one of the strongest balance sheet. It appears to be well positioned to prosper when the demand for its products improve. The catalyst here being a generally improving economy as well as  increased infrastructure spending in the next 2 years as part of the stimulus.

I am putting this company stock on my watch list, with an intention of committing money to it when my liquidity allows it. At that time, I will post a detailed analysis for the AIL Premium ...

Read Full Article >>

National Presto (NPK) operates in 3 distinct segments: Housewares/small appliances, Defence Products and Absorbent Products. From a business perspective, pressure cookers, ammunitions and diapers cannot be more dissimilar. Still, the company has managed to successfully integrate distinct businesses and gain economies of scale in each segment.

National Presto is currently valued at $600 million in market capitalization. It has no long term or short term debt, $146 million in cash and marketable securities and $310 million in Book Value. The question is, whether the shares are currently priced attractive enough to justify taking a position.

Valuing the Assets

This will be a quick exercise. It is evident that the company is selling at a premium to the book value (almost 2x). This is not a classic Grahamesque investment. Still, there are a few key takeaways that we need to consider.