On May 18th I wrote a post analysing Novae. My premise was that the Insurance Group’s net net working capital was very nearly at the same level as the market capitalisation of the company. You can read the full analysis here
It looks like I was right to identify this as a value investment as Axis Capital Holdings Ltd today agreed a 700p per share cash takeover of Novae. Interestingly, the shares are now trading at a slight premium to 700p as perhaps there is a potential for a second bidder.
The current price represents a 27% profit on my original purchase price – so not stellar but a decent amount for a couple of hours work.
The issue with value investing is that you have no power over when the market recognises that value. It can be within weeks, as in this case, or it could be years. It’s nice to get the occasional quick turnaround to keep things interesting.
Makes up for my currently disastrous inability to predict where on earth Oil prices are going to go next.
Good luck all.