Arquitos Capital Management

Talbots today on takeover, tomorrow seen returning 61 percent

Steve — Wed, 11 Jul 2012 02:15:08 +0000

Quoted in Bloomberg

Talbots Inc., which posted the worst returns of any US retailer in the past decade, is now offering some of the biggest potential gains for traders willing to bet a deal with Sycamore Partners LP will finally close.

With the Hingham-based women’s apparel chain trading 8 percent below Sycamore’s takeover bid of $2.75 a share, investors buying the stock today could post a 61 percent profit on an annualized basis if the acquisition is completed by the end of August. That would be the largest return for any pending all-cash deal in the US of more than $100 million, according to data compiled by Bloomberg.

Sycamore Networks: A Lottery Ticket That Pays You

Steve — Wed, 13 Jun 2012 01:41:26 +0000

Article at Guru Focus

What if you paid $1 for a lottery ticket, but if you didn’t win over the next two years, you could turn that ticket back in for $1.08?

As value investors, that seems like a no-brainer. At the time of this writing, Sycamore Networks (SCMR) trades for $13.30, yet has $15.31 in net assets with $15.17 of that in cash and liquid investments. With an expected annual cash burn rate of about 50 cents per share and shareholder-friendly management, we have a two-year period at these prices to see if Sycamore’s new product will hit the jackpot or not.

This is a company that many of us are probably at least somewhat familiar with. I’ve owned it off and on for at least the last three years. Previously it was only a cash or potential liquidation play. That changed about two years ago with the introduction of a new product, IQstream.

Appearance on the George Jarkesy Radio Show

Steve — Wed, 06 Jun 2012 20:36:33 +0000

Interviewed by the George Jarkesy Radio Show

I had the opportunity to appear on the George Jarkesy Radio Show yesterday to discuss one of our holdings, Aberdeen International. You can listen to it by clicking here. Fast forward to the 43 minute mark for my segment.

Berkshire Hathaway Shareholders Reaction

Steve — Sat, 25 Feb 2012 22:18:53 +0000

Quoted at WSJ.com

Steven Kiel, President, Arquitos Capital Management (Annandale, Va.): Berkshire’s annual letter is like Christmas morning for a kid. This year’s gifts include a detailed discussion on share buybacks, a warning about bonds, and praise for chapter 8 of Ben Graham’s “The Intelligent Investor,” quite possibly the most important chapter ever written on investing. Buffett reveals that he has been reluctant to buy back shares because shareholders who sell at a price Berkshire is willing to pay are getting a bum deal… My guess is that those sellers, to their detriment, won’t be reading this letter. Don’t make that same mistake.

In the argument between MSG and Time Warner Cable, the fans are the ones losing

Steve — Sat, 18 Feb 2012 03:18:20 +0000

Quoted in the Saratogian

On Jan. 1, Time Warner Cable pulled the plug on the MSG channel, citing the network’s increased demand on subscription fees. The Daily News reported that MSG wanted a 6.5 percent fee increase while Time Warner claimed the network wanted 53 percent more; as the two sides pointed fingers and blamed each other, I sat back and didn’t care.

After all, it was Week 17 in the NFL, and the Giants needed a New Year’s win over the Cowboys just to make the playoffs, bowl season was underway and I was not yet ready to shift my focus away from the gridiron.

Even after the Super Bowl, when my focus landed on college hoops, the NBA and the NHL, there wasn’t much lost for me without the MSG network. The Knicks immediately drew ire and lethargy from the fans who could see them or read about Carmelo Anthony’s near-40 percent shooting from the field. I took the plunge and purchased the NBA league pass and knew I could wait until the playoffs to jump back into hockey.

What Is Jeremy Lin Worth?

Steve — Sun, 12 Feb 2012 22:26:59 +0000

Quoted in The Atlantic

“Because of Jeremy Lin,” Steven Kiel wrote Tuesday, before Lin hit a game winning shot against Toronto, “shares hit a new 52-week high of $32.30. With 62.08 shares outstanding, today’s move up of $1.15 means the market thinks Jeremy Lin’s weekend success is worth $71.4 million.”

Want to Work for Berkshire Hathaway?

Steve — Tue, 06 Dec 2011 22:29:27 +0000

Quoted at WSJ.com

Steven Kiel of Arquitos Capital Management, a Berkshire shareholder who pointed out the job filing to Deal Journal, said: “They should charge people to work there, rather than pay them.”

A Buffett Devotee Riles His Targets

Steve — Sat, 05 Nov 2011 21:32:18 +0000

Quoted in The Wall Street Journal

He likes restaurants and insurers, runs a company called “BH” and writes long, self-effacing annual letters to shareholders.

No, this is not Warren Buffett. This is Sardar Biglari, a 34-year-old upstart business mogul who recently set his sights on Cracker Barrel Old Country Store Inc.

Mr. Biglari has long styled himself as a Texas version of Berkshire Hathaway Inc.’sWarren Buffett, albeit on a much smaller scale. The San Antonio-based investor, who runs the Steak ‘n Shake restaurant chain alongside stock investments and other holdings, has a sparse website evocative of Berkshire’s. He staged a reverse stock split of his shares to make them each worth hundreds of dollars. Mr. Biglari even shares a birthday with the 81-year-old Sage of Omaha.

Automobile makers whistle through the gloom

Steve — Mon, 12 Sep 2011 21:34:36 +0000

Quoted at MarketWatch

FRANKFURT (MarketWatch) — Automobile manufacturers may find it difficult to keep Europe’s sovereign-debt woes and fears of a double-dip U.S. recession out of mind as they prepare for this year’s Frankfurt Auto Show, analysts said.

The last event, in 2009, came as the automobile companies were left reeling by the global recession that followed the collapse of Lehman Brothers the previous fall. This time around, car makers are feeling better.

In the United States, General Motors Co. has emerged from bankruptcy having shed debt and garnered labor concessions, while Ford Motor Co., which avoided a bailout, holds plenty of cash on its balance sheet, said Steven Kiel, president of Arquitos Capital Management in Annandale, Va.

Buffett Scrambles to Limit Damage

Steve — Mon, 02 May 2011 21:40:56 +0000

Quoted in The Wall Street Journal

OMAHA, Neb.—Warren Buffett on Sunday sought to limit damage to Berkshire Hathaway Inc. and to his own reputation in the wake of a stock-trading controversy involving a top aide.

Asked at a news conference how his reputation has been affected by the episode, Mr. Buffett said: “I don’t really feel it’s changed much…Overall, everything I do is out there for people to judge.”

Mr. Buffett was severely critical at Berkshire’s annual meeting Saturday of the actions of the aide, who in January recommended Berkshire buy a company in which the aide had just invested.