Anyone care to comment on Greenberg taking a position in XTXI. Stlbeerman informed me that Greenberg has purchased over 2 million shares of XTXI. His holding company is known as Chieftan Holdings. I saw one of the most recent SEC filings listed a purchase of 800K shares. I assumed this was a vehicle created by some of the insiders that were buying shares to finance the recent Chief acquisition and gave it no thought when I firstsaw it, turns out it is a coincidence in the names. I guess we know what happens when I assume....
I think it is a bullish sign that someone has established a position of 2.5 million shares at an average price of $80.
the action in the E&P's over the last few months has made me sick. I've moved mostly into dividend paying stocks and have added to my already overweight poition in XTXI and I'll probably continue to add at these prices. Thanks again RRB
here's more -- Greenberg's philosophy -- " maintains a highly concentrated portfolio that he describes as a "defense against ignorance", he believes that the more companies you own, the less you will know about each, and the less you know about a business, the more likely you are to make mistakes due to fear and greed." He usually owns less than 10 stocks. He owns about 2.6 mm shares of XTXI.
From what I've seen he's not a hedge fund manager, but a more traditional investment manager. There's a good section on him in the book "Value Investing" by B. Greenwald if you're interested.
Yes, he's concentrated and deep value, but what's even more important (for us) is that he is LOW TURNOVER. He holds positions for at least 3 years on average. That dries up supply of shares and more than offsets the impact of any Yorktown distributions.
This is 8-9% of Greenberg's holdings and something like 15% of XTXI. This is a pretty bullish signal (more or less than insider buying, not sure, but certainly good news) and should bring XTXI some more looks.
According to the 8-K Chieftain's purchase price for the XTXI stock in the private placement was $70.17 per share for a wonderful sweetheart deal.
The private placement was pursuant to an agreement dated May 16th when XTXI was trading at $81.
XTXI must have needed the money fast to have agreed to such a price concession, and Chieftain grabbed the opportunity.
It doesn't mean that Chieftain would buy the stock at today's quote of twenty points higher.
Remember that the Chieftain, et al shares cannot collect dividends until Feb 18, 2008. If you take the next six quarters of dividends at an average of $0.75, which I think is conservative, you can deduct $4.50 from the price and get pretty close to what Lubar (an insider) paid. The "discount" now appears to be about 5%. Still a good deal, but not really a sweetheart one.
Glenn Greenberg (Chieftain) is an extremely talented investor with an excellent long term record. Chieftain typically invests in a very small number of stocks with a very long time horizon. My experience is that they do exhaustive research on their companies and know them extremely well.