Current Portfolio
As of the close today my net long exposure is very low, and most long positions are of the workout variety as opposed to generally undervalued securities. This reflects my view that the general market level is not cheap.
For options positions, the percentage amount represents the notional value as a proportion of the portfolio.
LONG (92.5%)
30%
AAPL (short put)
20%
C (short put)
25%
CLGX
10%
GGP
7.5%
GS
SHORT (57.5%)
7.5%
ALGN
5%
CHCO
5%
CLWR (short call)
10%
LOPE
10%
MCO
5%
NFLX (short call)
10%
PC
5%
VPRT
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It’s great to see you posting again. What is your take on CLGX?
CLGX has a few interesting and rare qualities. It won’t matter to shareholders whether interest rates go up or down 10 percent, whether there’s inflation or deflation or whether China’s insane real estate market takes the yuan down with it. Without Corelogic, Bank of America, Citigroup and Wells Fargo, as well as home insurers would be lost in the wilderness as far as appraisals are concerned. People in the business tell me that it operates a virtual monopoly. And yet the stock trades at less than 9x 2009 after-tax earnings. There’s a short window of time to act on this before the public figures this one out.
I am comfortable making this a 40% position, but the litigation risk scares me. There are some serious allegations that CLGX colluded with WaMu to artificially inflate appraised home values. I am keeping a close eye on this.
Thanks for the quick reply. In your valuation, considering its virtual monopoly, what range of multiples would be more appropriate for CLGX?
After doing further research I discovered that my after tax income calculation is wrong. I was working off of the investor presentation appendix rather than the 8-k filed June 4. The stock is not as attractive as I originally thought, and I’ve sold my position.