William,
I think the company made some mistakes this past quarter. Former chairman Brian McAdams was a poor choice as chairman. Now that he's out, and Safeguard has control of the board, the company should have no problem regaining its long term growth prospects. At $6.75, NM is very undervalued, based on a long term perspective.
I would be surprised if some bigger company didn't make an acquisition bid for the company, since it's so cheap. In fact, recently, when the stock tanked to 5.125 on 2.4 shares traded, I saw some huge block trades on the buy side. It seems that since volume has decreased since then, and since the stock price has moved higher, someone is buying up a lot of NM shares. If that's true, and the buyer now has more than 5% of the outstanding stock, they will need to report it in a 13D filing with the SEC. The due date for the filing is on Friday, so we may know who is buying the stock. If not, the stock is still a good value at the current price.
I just bought more NM this week, increasing my shares by 50%. I recommend that anyone thinking about buying NM do so on Thursday. The call options are a riskier yet more rewarding play (strike price of 7.5 and 10 for February).
Buy on Thursday, because if some company were to make a bid to acquire National Media, the announcement might be made on Friday. I have been thinking that the company might get taken over for the past 4 or 5 months now. But at this price, it's a deal. I figure that the board will not except less than $12 per share. I think the company should get $15.
If I may speculate a bit more, I will offer possible companies which may be the buyer.
Catalina Marketing (POS)
Liberty Media (LBTYA, LBTYB), a unit of Telecommunications, Inc. (TCOMA, TCOMB)
Safeguard Scientifics (SFE)
Who knows. Anyway, it should be interesting if it happens. Otherwise, I think the stock will rise above $9 by the summer.
Just my .02 worth,
Todd |
