Top 5 ideas of the week:
HTH: Q1 2013 Progress Report on SWS Group (Hilltop Holdings owns 17% of its Stock) – In our August 9th report evaluating Hilltop Holdings (HTH), we had reviewed the performance of Hilltop’s $50M investment in SWS Group (SWS). Hilltop recently released its Q3 2012 results and Net Investment Income Increased by 4.6% during Q3 2012 versus Q3 2011 and 31.2% year-to-date.
HKN, Inc: Suspension of Coverage – We sold our position in HKN, Inc. (HKNI) on October 25th before it deregistered its shares from the NYSE MKT stock exchange (formerly the American Stock Exchange). We had also sold its shares before it executed its one-for-forty reverse stock split.
We published our evaluation of Bill Ackman’s demands for General Growth Properties (GGP) to sell itself back in September. We’re glad that GGP rejected Ackman’s demands to put itself up for sale because we believe that the company is making steady steps in order to improve its fund flows from operations.
PRISA: 85% Discount to Book and Football Deals Will Help Investors Score Big – Promotora de Informaciones (PRIS, PRIS.B) is Spain’s leading media conglomerate and its shares have taken a tumble in 2012 due to the weakness of the Spanish economy nullifying the results of its restructuring plan and preventing it from increasing its deleveraging efforts.
Recommendation: We reiterate our Strong Buy rating on Teva Pharmaceuticals ADRs with a Fair Value share price to $51.70 as the price of TEVA’s shares is at a 19.7% discount to our estimated fair value. We expect to see the company generate earnings per ADR share of $2.85 in 2012 and to increase ADR EPS by 12-15% annually over the following three years.
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