International Speedway

Ok, I don't know much about this company. But.... over the last few days everyone and there other has bought increased shares as per Finviz.com

I found the beef

Ok Wendy's..... WEN recently acquired Arby's from Triarc (was under TRY).

470 million shares out, combined earnings of the 2 companies is about 12.1 billion,

earnings per share of .... 25 dollars per share.

current share price of .....4 dollars

price to earnings (my projection) .... (0.16)

Industry Avg price to earnings .......ABOUT 10 ...... so we are looking at a 250 dollar stock price when the market realizes that a mistake has been made.

How did this happen? TRY did the following: converted all class b's into class A's. Then all owners of Wendy's received 4.25 shares of TRY for every share of WEN (ie TRY was assimilated with only one stock remaining)

Oh, and they pay a dividend with a yield of 12%.

So..... if I miscalculated........ go ahead and assume a 90% margin of safety. You are still paying 4 dollars for 25 dollars.

And they pay you to find out.

The Government Backed Monopoly-JP Morgan Chase, Bear Sterns, Washington Mutual

There is a huge value stock by my calculations. Starting with JPM, we have a book value of approximately 120 bill dollars. This is just what the current assets are worth, not even the earnings which it was capable of achieving.

If you go back to march 17th and the government backed acquisition of Bear Sterns by JPM for 10 dollars a share. The book value of Bear, as per the govt, is about 30 Bill.

Now JPM has acquired WaMu which is worth a minimum of 24 bill.

Accordingly, JPM is now worth 174 Bill. With 3.44 billion shares out, this makes JPM share price WORTH 50 dollars a share.

I'm not talking earning ability, I'm talking liquidation value. Conservatively, they have 10 dollars of cash per share.

Now......If we attempt to calculate the earnings ability of JPM when the market calms down we can find the true value. JPM had earnings of 3.5 bill at the end of 2007, Bear Stearns had earnings of 2.5 billion, and WaMu had earnings of 3.5 billion. Total earnings of 9.5 billion, we'll just be conservative and say 5 billion, or 1.45$ per share . If we use a simple DCF model then the value of JPM is about 65 dollars per share. (if you accept a modest 10% growth rate for the next 10 years, 0% thereafter, and a discount rate of 5%)(BTW actual ROE of BSC was 18.5%, WM was 14%, and JPM is 13%)

Right now, JPM is about 48 dollars per share which is about 2/3 the price of my EXTREMELY conservative income calculations. The 50 bucks in assets is free collateral.

Now, we have the government backing these acquisitions. JPM has officially become a monster of a company. Provided that JPM isn't ruined by the acquisitions, which does not seem likely, it will emerge with a much larger market share of the investing business.

Back that up with the float capital which is being made available by the new definition as a bank holding company and you have essentially risk free leverage in the form of bank deposits and savings accounts.

JPM is minimally worth 110$ a share. The only thing which could make this even sweeter would be to take over Thornburg Mortgage and an insurance company.

The Beginning

The purpose of this blog isn't to bore everyone with the details of my life. The point is to create an easily discoverable place in which to find all of the special situation investing opportunities which I can find. There may be some interpretations but the point it to condense all of the different opportunities in one place