Saturday, December 04, 2010

Some Portec Rail Products and Massey Energy

So yesterday, I picked up a few shares of Portec Rail Products (Ticker: PRPX) @ $11.55 and Massey Energy Co. (Ticker: MEE) @ $50.51. Why Portec Rail Products? This company is in the process of being acquired by L.B. Foster Co. (Ticker: FSTR) for $11.80 in cash. The closing is currently being held up because the DOJ is seeking some divestitures before signing off on the deal. The current tender offer expires on December 15th and I believe there’s a high probably that the deal will close by December 15th. Even if for some reason this deal gets derailed, I see Portec Rail Products stock going up because it is very cheap. I see this as a very good risk reward opportunity. The only downside is the thin float, which makes it very difficult to accumulate a good position. I was only able to buy half of what I wanted because of the thin volume. I may try to buy more next week if the price is right.

Now onto to Massey Energy… The company has announced that it is exploring strategic alternatives (also known as a sale). This morning it was announced that the CEO, Don L. Blankenship, will be retiring at the end of this month. This tells me that the company has a very high probability of being sold. The CEO was pretty much against a sale, but now he’s out of the way. Alpha Natural Resources (Ticker: ANR), ArcelorMittal, Arch Coal (Ticker: ACI) and a state run coal mine company in India have been rumored to be interested in Massey Energy. We should see a nice little pop on Monday…


Post a Comment

<< Home