It’s About To Blow!!!
November 27, 2011
Ride The Trends…
December 4, 2011

No Sense In Trying To Make A Few Extra Cents…

Yesterday, Fibrek Inc. (FBK: Canada) received an unsolicited takeover offer for its shares. This takeover substantially undervalues the company. As this offer is unsolicited, there’s a reasonable chance that the acquirer sweetens the offer in the next few months. Unfortunately, I think the best case scenario is that shareholders get a few pennies more. While you wait for those pennies, Mercer International (MERC: NASDAQ) is even cheaper in terms of valuation and much more concentrated in the NBSK market that I am enamored with.

I have swapped my Fibrek for Mercer and will use today’s closing price of 0.97 to close out this Fibrek position—unfortunately at a small loss. I have also added considerably to my Mercer over the past few months. Today’s decision in China to reverse course with tightening financial liquidity should allow Chinese tissue makers to begin rebuilding their inventory. All of this should be bullish for the NBSK market and for Mercer in particular. This has increasingly become a large position for me, and I am thankful to have been given a chance to increase this position.

Categories: Current Investments
Positions Mentioned: none

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