In their Workouts model, manager Fat Pitch Financials invests in special situations in which a corporate event sets the future value of a security. This includes events like mergers, liquidations, tender offers, etc. Media reports and securities filings are heavily relied on for research purposes.
The top holding in the model is Harbin Electric Inc (NASDAQ: HRBN). HRBN is a manufacturer and developer of electric motors, located in China. On October 11th, the HRBN announced plans to take the company private by forming an investment fund to buy all the outstanding shares not already owned by the Board of Directors’ Chairman and Chief Executive Officer. The press release mentions buying the outstanding stock for $24 per share. On December 20th, Yahoo! Finance showed HRBN with a closing price of $17.62.
The next largest holding in the model is biopharmaceutical company Crucell NV (NASDAQ: CRXL). In September, CRXL announced that they were in negotiations with Johnson & Johnson (NYSE: JNJ) for a potential public offer at about €24.75 per share with a minimum acceptance level of 95 percent (or 80 percent if certain other conditions are met). According to a subsequent release, JNJ’s plan is to maintain the same facilities, senior management and employment levels. On December 20th, Yahoo! Finance reported that CRXL had a closing price of $31.00.
Another top holding in the Workouts model is the water company Pennichuck Corp (NASDAQ: PNNW). On November 12th, PNNW announced that it had entered into a merger agreement with the City of Nashua N.H. , contingent upon several things including the agreement of 66 percent of the holders of outstanding common shares. The city plans to purchase outstanding common stock at $29 per share. Yahoo! Finance reports that PNNW had a closing price of $27.33 on December 20th.
