Members Only Login

©LanczGlobal, LLC. 2008
All rights reserved.

Our investment research and analysis has been nationally recognized:

CNBC

Barrons

Forbes

Bloomberg

Marketwatch

Reuters

Associated Press

Wall Street Journal

Click for live support

LanczGlobal Past Research Highlights



Merger Mania Part II

Merger Mania IIJanuary 2007
The year 2007 has started the way 2006 both started and finished with our members benefiting from takeover activity. During the first week of 2007, Motorola closed on its acquisition of Symbol Technologies for $15 a share in cash. This works out to be a 48% premium from our original recommendation at $10.13 a share in seven months prior. One of our favorite foreign companies, Suez, also hit new highs the first week of 2007 on talk of a potential new bidder coming in considering the delays in its merger attempt with Gaz de France S.A. Suez stock has now nearly doubled from our original recommendation in September 2005 at $27.55 and is becoming fairly valued. We finished 2006 with an old favorite Biomet receiving a $44 a share takeover offer in late December. The takeover price represents a nearly 50% premium from Biomet's lows in July 2006 and a full ten fold (yes a ten bagger) from our original purchases in 1993. Biomet's announcement marked our eleventh recommendation that had benefited from such takeover activity in 2006. This handily beats 2005's impressive total of eight, particularly (as we stated in last year's year end report) considering that we do not seek out takeovers. Rather it is just one potential byproduct of our research in finding undervalued companies. 2006 marked one of our best years in our 26 year history in terms of the absolute quantity of companies benefiting from M/A. While we take great pride in our research, in fairness a good part of this success has been created by the excess liquidity (cash) available throughout the world. We expect this trend to continue throughout most of 2007 albeit at quite possibly a moderately lesser pace.




Merger Mania

Merger ManiaDecember 2005
Our clients continue to benefit from merger activity as Wall Street concurs with our research by initiating substantial premium takeover bids on many of our recent recommendations. Through the first half of 2005, no fewer than six of our holdings have benefited from takeover activity. In the third quarter, two more of our holdings attracted premium takeover offers - both of which from foreign companies. Ivax Corp (IVX) received a takeover offer from Teva Pharmaceutical, resulting in a huge percentage gain in Ivax since our recommendation in November 2004. Such foreign takeovers of U.S. companies have increased four fold in 2004 over 2003 and we expect the upward trend to continue. Also, in June 2005, we started accumulating Endesa SA which has recently received a premium takeover offer from Spain's Gas Natural SDG SA. Our goal is not to buy investments that will necessarily be acquired by another party at a premium, but we do like catalysts that can propel valuations upward that are not yet factored in by Wall Street. This is one of the many ways we reduce risk within our portfolios. Our eight holdings benefiting from takeover activity is only one potential catalyst that we look for, yet has become a large part of our overall research process that has helped us outperform.




Gearing Up For Generics

Generic DrugsNovember 2004
It is common knowledge that we like to buy when prices/valuations are down and expectations are low. From a sector standpoint, we had made strategic moves in buying energy several years ago before that sector became all the rage and taking advantage of the pharmaceutical plunge with the Hillary scare ten years ago. Lately, several sectors have experienced significant sell-offs and we have decided to emphasize two companies that have been hitting new lows over this past week. Investors may be thinking we will focus on the insurance industry or large pharma after their recent plunge in valuation, but we would rather focus on the generic drug sector. Now that the utility stocks we favored early this year have appreciated well beyond our buy limits, select generics offers the best risk-to-reward for new monies. It is also reassuring that like with some of our medical device favorites, the generics offer a solid long term outlook making current depressed valuations even more appealing. Teva Pharmaceutical , whose ADR's trade on the NASDAQ under the symbol TEVA, is based in Israel and has become the worldwide industry leader. Their ADR's plunged to new lows last week below $23 a share down over 34% from valuations established 4-5 months ago. IVAX Corp. (ASE: IVX) has taken an even more dramatic 42% plunge after reporting earnings last week that disappointed Wall Street. While IVAX is definitely the more speculative of the two (note our safety rating), we do feel that Wall Street not only over reacted in selling these companies, but also missed the point regarding their earnings. Both companies are doing well showing strong revenue and earnings growth and when you combine this with their excellent long term prospects, their sell-offs give the patient investor an extremely enticing opportunity. Investors should buy both stocks up to their respective buy limits of approximately $27 a share for TEVA and $15 for IVAX. Potential returns of 20% or more annually are feasible from current depressed levels once Wall Street awakens from these overly dismal expectations.




Barron's: Energy Merchants

Reprint From: May 15, 2001 Issue of The Lancz Letter
BarronsJust as the Internet was the catalyst that started the mania for technology stocks, California's energy woes seem to be the catalyst for stocks like Calpine. Calpine is seemingly on everyone's favorites list despite the fact that the stock has already soared from around $3 a share a little over two years ago to unprecedented levels of nearly $60 a share today. We are not saying it will plunge anytime soon, but at some point investors will realize that current growth rates cannot continue and at that time the stock will be very susceptible to a nasty fall. California's energy problems will eventually be resolved. In fact, within two years California will be a net exporter of energy.




What Ever Happened to Tech Wreck

Reprint From: November 8, 1999 Member's Only Sector Spotlight
Tech WreckThe euphoria around technology stocks is growing to levels that should be a cause of concern to most investors. We have discovered from experience that when investors favor a sector so much that it falls under the "must have at any price scenario," then it is a good time to take some profits. Nearly twice the mutual fund dollars are going into technology funds this week than the first week of October. It seems to be a given now to get growth you have to buy technology related stocks, particularly with the growth prospects of the internet. Many novice investors feel that this outperformance of technology is commonplace, but just three years ago technology companies traded at a 19% discount to non-technology peers. Currently with shares in higher and higher demand such an occurrence (of trading at a discount) seems unthinkable. We are advocates of technology and feel technology will continue to be a vital catalyst for global economic growth. But some of the extreme valuations force us to take some profits and be extremely selective with any new purchases here. The internet craze reminds us of the early tech craze of 1982-1983, when a host of PC companies went public... of which Apple Computer was the only one that survived. To put it simply tech stocks do go down and we would rather take some profits now when prices are hitting new highs than try to get out the door when everyone else decides that tech prices are too high. Last Friday's Microsoft ruling is taken as a "nonevent" by Wall Street and this confirms our thoughts that investors are looking at everything in tech through rose colored glasses. Last week we met with several fellow money managers in San Francisco and one conversation perfectly illustrates the IPO internet craze. The firm manages $11B institutionally and has recently established retail mutual funds for the general public. They were bragging about their emerging growth fund being up 50% last month alone. It turns out that this new fund with only $8M in assets was the beneficiary of many of the "hot" IPO's of late causing such a small fund to soar in price. Even though this was not an IPO fund, this institution discovered the best way to get a bang for their IPO dollar, was to put a good part of the firm's allocation into this new fund. This is definitely a sign of the beginning of a craze. How all this will shake out is not known but the high quality leaders should continue to do well. The vast majority of the internet IPO's will probably experience the same fate as Atari and Commodore of the early 1980's. The early sign of this is that the first internet grocery IPO, Peapod, Inc., has recently announced that it may not have enough money to continue operations through next year. If internet euphoria begins to dry up so will the cash that is funding all of these speculative deals. That will lead to only one possible outcome for many speculative internet IPO's at today's excessive valuations.



Disclosure: LanczGlobal LLC is an independent investment research firm. All articles and content are for informational purposes only and are not intended to be a solicitation, offering or recommendation of any security. LanczGlobal LLC does not represent that the securities, products, or services discussed in this publication or within LanczGlobal.com are suitable or appropriate for all investors. All recommendations and analysis constitute an opinion which may change without notice and may or may not prove correct. Readers must make their own independent investment decisions, as past success can not guarantee future results. LanczGlobal LLC or Alan B. Lancz are not affiliated or endorsed by any national media and only acts as an authoritative source of information. Such information does not constitute a recommendation to buy or sell securities or investment vehicles.