Back in the dark days of 2020 I was actively buying a conglomerate around a couple bucks per share. The stock had fallen from the highs of $40 down to a valuation where everyone thought bankruptcy was on the horizon.

My thoughts on the valuation were pretty simple at the time. Either the stock went to zero and I lost all of my capital. Or the company somehow survived the pandemic and you get at least a ten bagger. If I sized my position right, a 1-2% position could easily become a 10-20% position, and if I was wrong I would only lose 1-2% of my capital. It was an asymmetric bet I was willing to take.

Fast forward a few months and the company ended up surviving. The stock went from $2 per share to $10 and continued to climb. I ended up selling out after the company announced a “go-private” transaction to private equity that seemed significantly under the fair market value of all of the assets.

The “go-private” transaction ended up failing as investors voted down the private equity deal. The stock fell under $10 per share and I started aggressively buying again.

Then one day I woke up and saw the company announced a significant asset sale. The asset sale was an attempt to sell one of their three business units for almost one billion dollars. One billion dollars for a company that was trading less than $100 million only one year ago during the pandemic. The stock shot up. I continued to purchase shares as it appeared the entire company was in play to be sold. My analysis suggested each business unit could be sold for close to one billion each.

This past Monday, the company announced that the sale of this asset closed. In addition, the management team announced they are doing a $12 dollar per share special dividend along with a pretty aggressive stock repurchase plan. All of the remaining proceeds will be used to pay down debt.

My average cost basis in this company is $12.50 per share. Getting a $12 dollar per share special dividend in less than a month will be significant. This dividend check is a higher payment than my first year salary at my first professional job.

It is mind blowing. Almost all of the risk in this investment will be returned to me in early February, and I can ride the rest of the investment using house money. In addition, I think this company could selloff the remaining two segments for close to a billion each. Should this happen, I am guessing the management team does additional special dividends, that could be even higher than the $12 per share they just announced.

This may be the best investment of my career and it is only just starting. All of my initial capital is getting returned to me and I can ride out the rest of this investment using house money. Should management sell the other two divisions, I stand to make a significant amount of money.

I have highlighted this investment to the community of over 1,500 investors on Alpha Letter multiple times. We have a pretty great discussion ongoing about the tax treatments of this special dividend along with what the company will look like in a couple of years. The stock is up over 20% in 2022 and anyone who bought on my initial research is getting most, if not all of their capital returned in a month.

You can get access to this community along with an archive of all my past research and future research. Join the discussion today.

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