Some think we a buy17 Nov 2015 09:51
Two Under-The-Radar Takeover Targets With Strong Catalysts Ahead
Nov. 16, 2015 2:18 PM ET | Includes: PTRDF, TETHF
Disclosure: I am/we are long XUE, TETHF, PTRDF. (More...)
Summary
The M&A environment often offers opportunities where there is a spread between the stock price and the potential acquisition price.
Many investors fish for profits in takeover targets by exploiting this disconnect.
Tethys Petroleum and Petrodorado Energy deserve a closer look because there is significant spread between their stock prices and their potential acquisition prices.
Introduction
The event-driven investment strategy involves investments, long or short, in the securities of companies undergoing significant change and often helps the investors capitalize on the opportunities inherent in specific corporate events, including mergers and acquisitions. This strategy has a significant advantage over other strategies. It is often unrelated to broad market conditions and especially when we are in a flat or down market, making money this way is like "manna from heaven". Actually, this is the reason why I suggested the subscribers to my Newsletter buy grossly undervalued Metalico Inc. (NYSEMKT:MEA) at and below $0.35/share in early June 2015. Back then, Metalico was undergoing a strategic review and finally announced a buyout offer at $0.60/share in late June 2015. The deal went through as planned, and those who bought at $0.35/share had a return of approximately 65%.
On that front, I also presented:
1) Xueda Education Group (NYSE:XUE) when its stock was at $5.08/ADS, given that the company had received a buyout offer at $5.50/ADS. Xueda Education Group currently stands at $5.30/ADS, and I am waiting for an update with respect to the completion of the deal. My article is here.
2) Africo Resources Ltd. (OTC:AFCRF) and PhosCan Chemical Corp. (OTC:PCCLF), which are two debt-free small caps with ongoing strategic reviews that are potential takeover targets for their cash. Both companies are currently selling below their cash per share. My article is here.
In my linked article above, I also suggested you stay tuned because I planned to unveil additional compelling opportunities in my next articles. Given that I always keep my promises, I am back to present you the following two companies:
1) Tethys Petroleum (OTCPK:TETHF).
) Tethys Petroleum: This is an energy company whose primary listings are on the Toronto and London stock exchanges under the ticker TPL. The biggest shareholder is Pope Asset Management (NYSE:PAM) from Memphis/TN with 64.2 million shares (19.1% of the company) as of January 2015.
It operates in Kazakhstan which has expanded its economy more than 400% over the last 20 years thanks to its enormous hydrocarbon reserves, Tajikistan and Georgia, as illustrated below:
(click to enlarge)
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