In what was a relatively active month for the Absolute Returns model. We exited our position in Ambase Corp. (ABCP) on concerns expressed in last months investor letter regarding the company’s willingness and ability to unlock the remaining value. With our investment thesis substantively complete following the resolution of the company’s legal dispute, we viewed the potential for future gain versus future impairment as uncertain and sold our position accordingly.
The model’s position in Equal Energy (EQU) was exited during the recent run up as much of the expected value in a favorable resolution to the strategic review appeared to have been priced into the market. The asset disposals announced shortly thereafter appear to have been conducted at valuations short of the markets’ expectation and our timing was seemingly fortunate.
We took the opportunity to initiate a position in Porsche Automobil (XE:PAH3), the luxury car maker, at a substantial discount to the book value of its holdings. The common stock price has been depressed primarily on concerns over the numerous legal proceedings the company faces in both German and US courts.
As before, we remain ready to deploy capital should attractive opportunities present themselves and maintain a high level of conviction in the models current holdings whilst being somewhat underwhelmed by the current market environment.
The investments discussed are held in client accounts as of September 30, 2012. These investments may or may not be currently held in client accounts.The reader should not assume that any investments identified were or will be profitable or that any investment recommendations or that investment decisions we make in the future will be profitable.
Certain of the information contained in this presentation is based upon forward-looking statements, information and opinions, including descriptions of anticipated market changes and expectations of future activity. Covestor believes that such statements, information, and opinions are based upon reasonable estimates and assumptions. However, forward-looking statements, information and opinions are inherently uncertain and actual events or results may differ materially from those reflected in the forward-looking statements. Therefore, undue reliance should not be placed on such forward-looking statements, information and opinions.
