Monday was another interesting day in the markets. It seems like it’s been a few years since we have had even a week where markets were totally boring.
The S&P 500 was down 0.5%. Toronto was basically flat.
Blackberry / Research in Motion has a tentative agreement to be bought out for $9 a share. It’s apparently subject to 6 week due diligence period. Blackberry is free to accept a higher bid if one should materialize before the proposed deal closes or becomes more firm. The current bidders would receive a $150 million termination fee in that event.
The bidding group is led by Prem Watsa at Fairfax Financial. He has been called the Canadian Warren Buffett. Of course, he is nothing of the sort. Buffett generally only invests in companies where it seems reasonably certain that the company will be around and be much larger in 10 years. That hardly describes Blackberry. Also Buffett would require good management in place. That also hardly describes Blackberry. Buffett also says that turn arounds seldom do turn. Good luck Prem Watsa.
Canadian Tire was up 1.7% to $93.25 today. Not a huge jump but certainly interesting on a day taht the markets were generally weak. Canadian Tire jumped around 1% quite suddenly at noon. It’s possible that its planned REIT IPO has moved closer to reality. Or perhaps some analyst up-graded Canadian Tire today. Recent declines in interest rates (a modest decline which occurred with the Fed’s failure to taper) should help bring a higher price for the REIT. For the most part I am holding my current Canadian Tire position but I do have order in to trim slightly at $94 and $95.
Stantec was up 2.3% to $54.42. That is a gain of 37% this year on top of a 44% gain last year. While it does not look overly expensive I am nevertheless tempted to sell or trim my position. This has been a truly wonderful investment over the years. It can be volatile at times but over the years it has grown hugely.