NCAV 2011-1

The first NCAV update of the year, proved to have no major impact on the Absolute Value bucket portfolio (for information on this bucket, and how it works, read here).

Three new names (NINE and PCC) were found by the screen but were removed by my qualitative overlay;
- PCC and SVLF: the screen used total assets (rather than current assets) thereby invalidating its calculation of NCAV.
- NINE: the financial statements used were stale (over 6months old) and hence NINE was qualitatively removed.

A number of existing names (BXG, LAB, LTON, NED, TWMC, and XIN) reappeared on the screen.  As such, the final date that these names must be sold by has been extended (here are the rules when NCAV names are sold).

Finally, a short update on QXM who were subject to a take-over offer from their majority shareholder, Qiao Xing Universal Resources (XING), back in September.  The offer was of $0.80 in cash and 1.9 shares in XING for each of share in QXM, which is potentially worth $5.95 (XING closed at $2.71 on Friday) or about 20% higher than QXM’s closing price.  In early January, a special committee of QXM’s directors has authorized that the offer be put to minority shareholders.  As such with QXM trading at a discount to the bid-value, and since Our Man doesn’t want to hold any XING shares, the position will be sold either on/around 1st April 2011 (when it will have spent 366 days since last appearing in the NCAV screen) or earlier, should the deal with QXM be approved and close (so that Our Man does not receive any XING shares).