The Weekly Wrap-Up provides summaries of recent publications from the Spin-Off Report including links to the full-length research reports.  If you haven’t engaged with the research over the past seven days, the Weekly Wrap-Up will quickly update you on our newest and highest conviction ideas.

Newest Publications & Updates

UPDATE: Jefferies Financial Group Inc. (GEHC)
January 17, 2023

Jefferies Financial Group Inc. (NYSE: JEF) announced the completed spin-off of Vitesse Energy (NYSE: VTS) after the market open on January 17, 2023. JEF shareholders received one share of VTS for every 8.49668 shares of JEF owned. Shares of VTS closed trading on January 13, 2023, at a price of $15.29.

We approach our valuation under the assumption that little to no value was being attributed to Vitesse Energy within the consolidated JEF stock price. Further, we view the current JEF institutional shareholder base as unlikely to have a meaningful interest in holding shares of the oil and gas entity following the distribution, as their probable reason for owning Jefferies is for financial market exposure.

We value shares of JEF at $36 per share and rate shares at NEUTRAL. We fairly value shares of VTS at $23 per share and rate shares of VTS at a BUY.

Radar Screen – February 2023

Monthly publication providing ongoing analysis on companies with potential for a value-unlocking event

Companies discussed this month:  Alphabet Inc. (GOOG), Amerco (UHAL), Crown Holdings Inc. (CCK), Griffon Corp. (GFF), Hasbro, Inc. (HAS), IAC Inc. (IAC) JELD-WEN (JELD), Liberty Broadband (LBRDK), Lions Gate (LGF), Matthews (MATW), Natura & Co. Holding (NTCO), Par Technology (PAR), Penn National Gaming (PENN), RCI Hospitality (RICK), Teck Resources (TECK), Tiptree Inc. (TIPT), The J.M. Smucker Co. (SJM), Western Digital (WDC), Whirlpool Corp. (WHR)

Spin-Off Calendar – February 2023

Published monthly, The Spin-Off Calendar provides one-page summaries of every spin-off under coverage from the announcement date, followed by the filing of the Form 10 and continuing 60 days post completion.

Spin-Off Report Compendium – January 2023

Murray Stahl’s commentary on various investing themes and single stock recommendations.

European Spin-Off Compendium – February 2023

Murray Stahl’s commentary on various investing themes and single stock recommendations in Europe. 

Bits & Pieces

Covers mispriced stub securities, tracking stocks and other arbitrage opportunities.

Product Specialist

Rich Albanese
ralbanese@pcsresearchgroup.com
+1 646-839-5566

The Weekly Wrap-Up provides summaries of recent publications from Hidden Opportunities including links to the full-length research reports.  If you haven’t engaged with the research over the past seven days, the Weekly Wrap-Up will quickly update you on our newest and highest conviction ideas.

Newest Publications & Updates

UPDATE:  Griffon Corp. (GFF)
January 9, 2023

On January 9 GFF announced a cooperation agreement with Voss Capital, a ~6% holder, that would see its chief investment officer, Travis Cocke, appointed to the company’s Board (as well as add him to the Nominating, Governance and Strategic Consideration committees). Additionally, following the 2023 Annual Meeting, Voss will “select and appoint” an additional independent director (with the Board overall size not to exceed 13 members).

Our base case fair value estimate for Griffon Corp. (GFF) remains $46.50 per share, reflecting a blended multiple of 9.3x on F2023 adjusted EBITDA of $427.7 million along with projected net debt of ~$1.44 billion (see Exhibit #1 on page 2).

INITIATION:  IAC Inc. (IAC)
December 28, 2022

IAC has a long history of value unlocking transactions, in which it has typically acquired relatively nascent businesses, grew them, both organically and by acquisition, and ultimately monetized them via spin-off or sale, including, among others, Ticketmaster, ILG, Lending Tree, HSN, Expedia, TripAdvisor, Trivago, Match Group, Angi, Inc. and, most recently, Bluecrew.

In our view, shares are currently undervalued with the implied value of its private holdings (the so-called “stub”), based on the current market prices of its public holdings inclusive of net debt, at $1.06 billion, which is notably the lowest implied value seen over the last two years and well below our $3.23 billion fair value estimate.

In terms of its private holdings, based on IAC’s guidance & commentary, as well as peer and M&A valuations, we value Dotdash Meredith at $26 per share and Emerging & Other at $10 per share, which awards per share values of $7 and $3 to Care.com and Vivian Health, respectively, while assigning zero value to the other businesses (i.e., Mosaic, The Daily Beast, IAC Films & Newco). Search’s profits are assumed to partially offset corporate costs while Turo is valued at ~$3 per share. For its public holdings, based on the current market prices, we value ANGI at ~$11 per share and MGM at ~$25 per share. Accounting for remaining corporate costs as well as net debt yields a total sum-of-the-parts value of ~$67 per share (with bull and bear cases of ~$92 and ~$43 per share, respectively).

Radar Screen – February 2023

Monthly publication providing ongoing analysis on companies where we see potential for a value-unlocking event

Companies discussed this month: Alphabet Inc. (GOOG) Amerco (UHAL), Crown Holdings Inc. (CCK), Griffon Corp. (GFF), Hasbro, Inc. (HAS), IAC Inc. (IAC) JELD-WEN (JELD), Liberty Broadband (LBRDK), Lions Gate (LGF), Matthews (MATW), Natura & Co. Holding (NTCO), Par Technology (PAR), Penn National Gaming (PENN), RCI Hospitality (RICK), Teck Resources (TECK), Tiptree Inc. (TIPT), The J.M. Smucker Co. (SJM), Western Digital (WDC), Whirlpool Corp. (WHR)

Product Specialist

Rich Albanese
ralbanese@pcsresearchgroup.com
+1 646-839-5566

The Weekly Wrap-Up provides summaries of recent publications from Hidden Opportunities including links to the full-length research reports.  If you haven’t engaged with the research over the past seven days, the Weekly Wrap-Up will quickly update you on our newest and highest conviction ideas.

Newest Publications & Updates

UPDATE:  Griffon Corp. (GFF)
January 9, 2023

On January 9 GFF announced a cooperation agreement with Voss Capital, a ~6% holder, that would see its chief investment officer, Travis Cocke, appointed to the company’s Board (as well as add him to the Nominating, Governance and Strategic Consideration committees). Additionally, following the 2023 Annual Meeting, Voss will “select and appoint” an additional independent director (with the Board overall size not to exceed 13 members).

Our base case fair value estimate for Griffon Corp. (GFF) remains $46.50 per share, reflecting a blended multiple of 9.3x on F2023 adjusted EBITDA of $427.7 million along with projected net debt of ~$1.44 billion (see Exhibit #1 on page 2).

UPDATE:  RCI Hospitality Holdings Inc. (NASDAQ: RICK)
December 29, 2022

Close coverage of RICK with shares trading roughly in-line with our fair value estimate; we will look to re-recommend if/when valuation shifts or incremental steps toward strategic alternatives emerge.

For context, RICK has returned ~95.5% (compared with a ~1% increase in the S&P 500 and a ~2.75% rise in the Russell 2000) since our initial recommendation in June 2022.

INITIATION:  IAC Inc. (IAC)
December 28, 2022

IAC has a long history of value unlocking transactions, in which it has typically acquired relatively nascent businesses, grew them, both organically and by acquisition, and ultimately monetized them via spin-off or sale, including, among others, Ticketmaster, ILG, Lending Tree, HSN, Expedia, TripAdvisor, Trivago, Match Group, Angi, Inc. and, most recently, Bluecrew.

In our view, shares are currently undervalued with the implied value of its private holdings (the so-called “stub”), based on the current market prices of its public holdings inclusive of net debt, at $1.06 billion, which is notably the lowest implied value seen over the last two years and well below our $3.23 billion fair value estimate.

In terms of its private holdings, based on IAC’s guidance & commentary, as well as peer and M&A valuations, we value Dotdash Meredith at $26 per share and Emerging & Other at $10 per share, which awards per share values of $7 and $3 to Care.com and Vivian Health, respectively, while assigning zero value to the other businesses (i.e., Mosaic, The Daily Beast, IAC Films & Newco). Search’s profits are assumed to partially offset corporate costs while Turo is valued at ~$3 per share. For its public holdings, based on the current market prices, we value ANGI at ~$11 per share and MGM at ~$25 per share. Accounting for remaining corporate costs as well as net debt yields a total sum-of-the-parts value of ~$67 per share (with bull and bear cases of ~$92 and ~$43 per share, respectively).

Radar Screen – January 2023

Monthly publication providing ongoing analysis on companies where we see potential for a value-unlocking event

Companies discussed this month:  Amerco (UHAL), Crown Holdings Inc. (CCK), Griffon Corp. (GFF), Hasbro, Inc. (HAS), IAC Inc. (IAC) JELD-WEN (JELD), Liberty Broadband (LBRDK), Lions Gate (LGF), Matthews (MATW), Par Technology (PAR), Penn National Gaming (PENN), RCI Hospitality (RICK), Teck Resources (TECK), Tiptree Inc. (TIPT), The J.M. Smucker Co. (SJM), Western Digital (WDC), Whirlpool Corp. (WHR)

Product Specialist

Rich Albanese
ralbanese@pcsresearchgroup.com
+1 646-839-5566

The Weekly Wrap-Up provides summaries of recent publications from the Spin-Off Report including links to the full-length research reports.  If you haven’t engaged with the research over the past seven days, the Weekly Wrap-Up will quickly update you on our newest and highest conviction ideas.

Newest Publications & Updates

UPDATE: Jefferies Financial Group Inc. (GEHC)
January 17, 2023

Jefferies Financial Group Inc. (NYSE: JEF) announced the completed spin-off of Vitesse Energy (NYSE: VTS) after the market open on January 17, 2023. JEF shareholders received one share of VTS for every 8.49668 shares of JEF owned. Shares of VTS closed trading on January 13, 2023, at a price of $15.29.

We approach our valuation under the assumption that little to no value was being attributed to Vitesse Energy within the consolidated JEF stock price. Further, we view the current JEF institutional shareholder base as unlikely to have a meaningful interest in holding shares of the oil and gas entity following the distribution, as their probable reason for owning Jefferies is for financial market exposure.

We value shares of JEF at $36 per share and rate shares at NEUTRAL. We fairly value shares of VTS at $23 per share and rate shares of VTS at a BUY.

Radar Screen – January 2023

Monthly publication providing ongoing analysis on companies with potential for a value-unlocking event

Companies discussed this month:  Amerco (UHAL), Crown Holdings Inc. (CCK), Griffon Corp. (GFF), Hasbro, Inc. (HAS), IAC Inc. (IAC) JELD-WEN (JELD), Liberty Broadband (LBRDK), Lions Gate (LGF), Matthews (MATW), Par Technology (PAR), Penn National Gaming (PENN), RCI Hospitality (RICK), Teck Resources (TECK), Tiptree Inc. (TIPT), The J.M. Smucker Co. (SJM), Western Digital (WDC), Whirlpool Corp. (WHR)

Spin-Off Calendar – January 2023

Published monthly, The Spin-Off Calendar provides one-page summaries of every spin-off under coverage from the announcement date, followed by the filing of the Form 10 and continuing 60 days post completion.

Spin-Off Report Compendium – January 2023

Murray Stahl’s commentary on various investing themes and single stock recommendations.

Bits & Pieces

Covers mispriced stub securities, tracking stocks and other arbitrage opportunities.

Product Specialist

Rich Albanese
ralbanese@pcsresearchgroup.com
+1 646-839-5566

The Weekly Wrap-Up provides summaries of recent publications from Hidden Opportunities including links to the full-length research reports.  If you haven’t engaged with the research over the past seven days, the Weekly Wrap-Up will quickly update you on our newest and highest conviction ideas.

Newest Publications & Updates

UPDATE:  Griffon Corp. (GFF)
January 9, 2023

On January 9 GFF announced a cooperation agreement with Voss Capital, a ~6% holder, that would see its chief investment officer, Travis Cocke, appointed to the company’s Board (as well as add him to the Nominating, Governance and Strategic Consideration committees). Additionally, following the 2023 Annual Meeting, Voss will “select and appoint” an additional independent director (with the Board overall size not to exceed 13 members).

Our base case fair value estimate for Griffon Corp. (GFF) remains $46.50 per share, reflecting a blended multiple of 9.3x on F2023 adjusted EBITDA of $427.7 million along with projected net debt of ~$1.44 billion (see Exhibit #1 on page 2).

UPDATE:  RCI Hospitality Holdings Inc. (NASDAQ: RICK)
December 29, 2022

Close coverage of RICK with shares trading roughly in-line with our fair value estimate; we will look to re-recommend if/when valuation shifts or incremental steps toward strategic alternatives emerge.

For context, RICK has returned ~95.5% (compared with a ~1% increase in the S&P 500 and a ~2.75% rise in the Russell 2000) since our initial recommendation in June 2022.

INITIATION:  IAC Inc. (IAC)
December 28, 2022

IAC has a long history of value unlocking transactions, in which it has typically acquired relatively nascent businesses, grew them, both organically and by acquisition, and ultimately monetized them via spin-off or sale, including, among others, Ticketmaster, ILG, Lending Tree, HSN, Expedia, TripAdvisor, Trivago, Match Group, Angi, Inc. and, most recently, Bluecrew.

In our view, shares are currently undervalued with the implied value of its private holdings (the so-called “stub”), based on the current market prices of its public holdings inclusive of net debt, at $1.06 billion, which is notably the lowest implied value seen over the last two years and well below our $3.23 billion fair value estimate.

In terms of its private holdings, based on IAC’s guidance & commentary, as well as peer and M&A valuations, we value Dotdash Meredith at $26 per share and Emerging & Other at $10 per share, which awards per share values of $7 and $3 to Care.com and Vivian Health, respectively, while assigning zero value to the other businesses (i.e., Mosaic, The Daily Beast, IAC Films & Newco). Search’s profits are assumed to partially offset corporate costs while Turo is valued at ~$3 per share. For its public holdings, based on the current market prices, we value ANGI at ~$11 per share and MGM at ~$25 per share. Accounting for remaining corporate costs as well as net debt yields a total sum-of-the-parts value of ~$67 per share (with bull and bear cases of ~$92 and ~$43 per share, respectively).

Radar Screen – January 2023

Monthly publication providing ongoing analysis on companies where we see potential for a value-unlocking event

Companies discussed this month:  Amerco (UHAL), Crown Holdings Inc. (CCK), Griffon Corp. (GFF), Hasbro, Inc. (HAS), IAC Inc. (IAC) JELD-WEN (JELD), Liberty Broadband (LBRDK), Lions Gate (LGF), Matthews (MATW), Par Technology (PAR), Penn National Gaming (PENN), RCI Hospitality (RICK), Teck Resources (TECK), Tiptree Inc. (TIPT), The J.M. Smucker Co. (SJM), Western Digital (WDC), Whirlpool Corp. (WHR)

Product Specialist

Rich Albanese
ralbanese@pcsresearchgroup.com
+1 646-839-5566

The Weekly Wrap-Up provides summaries of recent publications from the Spin-Off Report including links to the full-length research reports.  If you haven’t engaged with the research over the past seven days, the Weekly Wrap-Up will quickly update you on our newest and highest conviction ideas.

Newest Publications & Updates

UPDATE: Jefferies Financial Group Inc. (GEHC)
January 17, 2023

Jefferies Financial Group Inc. (NYSE: JEF) announced the completed spin-off of Vitesse Energy (NYSE: VTS) after the market open on January 17, 2023. JEF shareholders received one share of VTS for every 8.49668 shares of JEF owned. Shares of VTS closed trading on January 13, 2023, at a price of $15.29.

We approach our valuation under the assumption that little to no value was being attributed to Vitesse Energy within the consolidated JEF stock price. Further, we view the current JEF institutional shareholder base as unlikely to have a meaningful interest in holding shares of the oil and gas entity following the distribution, as their probable reason for owning Jefferies is for financial market exposure.

We value shares of JEF at $36 per share and rate shares at NEUTRAL. We fairly value shares of VTS at $23 per share and rate shares of VTS at a BUY.

Radar Screen – January 2023

Monthly publication providing ongoing analysis on companies with potential for a value-unlocking event

Companies discussed this month:  Amerco (UHAL), Crown Holdings Inc. (CCK), Griffon Corp. (GFF), Hasbro, Inc. (HAS), IAC Inc. (IAC) JELD-WEN (JELD), Liberty Broadband (LBRDK), Lions Gate (LGF), Matthews (MATW), Par Technology (PAR), Penn National Gaming (PENN), RCI Hospitality (RICK), Teck Resources (TECK), Tiptree Inc. (TIPT), The J.M. Smucker Co. (SJM), Western Digital (WDC), Whirlpool Corp. (WHR)

Spin-Off Calendar – January 2023

Published monthly, The Spin-Off Calendar provides one-page summaries of every spin-off under coverage from the announcement date, followed by the filing of the Form 10 and continuing 60 days post completion.

Spin-Off Report Compendium – January 2023

Murray Stahl’s commentary on various investing themes and single stock recommendations.

Bits & Pieces

Covers mispriced stub securities, tracking stocks and other arbitrage opportunities.

Product Specialist

Rich Albanese
ralbanese@pcsresearchgroup.com
+1 646-839-5566

The Weekly Wrap-Up provides summaries of recent publications from the Spin-Off Report including links to the full-length research reports.  If you haven’t engaged with the research over the past seven days, the Weekly Wrap-Up will quickly update you on our newest and highest conviction ideas.

Newest Publications & Updates

UPDATE:  GE HealthCare Technologies Inc. (GEHC)
January 10, 2023

GEHC was spun off from General Electric Co. (NYSE: GE) after the market close on January 3, 2023. GE shareholders of record received one share of GEHC for every share of GE held. GE has retained a 19.9% ownership stake in GE HealthCare.

GEHC is expecting to report 4Q and full year 2022 revenue of approximately $4.9 billion and $18.3 billion, respectively, representing year-over-year growth of 7% and 4%. Notably organic growth was 12% in 4Q and 7% for full year 2022.  The company’s initial 2023 outlook calls for organic revenue growth of 5% – 7%, adjusted EBIT margins of 15.0% – 15.5%, and free cash flow conversion of 85% or greater of adjusted net income

We maintain our BUY rating and adjust our fair value estimate to $66 per share (previously $73 per share) reflecting our lower EBITDA estimate while maintaining our 11.0x valuation multiple.

Radar Screen – January 2023

Monthly publication providing ongoing analysis on companies with potential for a value-unlocking event

Companies discussed this month:  Amerco (UHAL), Crown Holdings Inc. (CCK), Griffon Corp. (GFF), Hasbro, Inc. (HAS), IAC Inc. (IAC) JELD-WEN (JELD), Liberty Broadband (LBRDK), Lions Gate (LGF), Matthews (MATW), Par Technology (PAR), Penn National Gaming (PENN), RCI Hospitality (RICK), Teck Resources (TECK), Tiptree Inc. (TIPT), The J.M. Smucker Co. (SJM), Western Digital (WDC), Whirlpool Corp. (WHR)

Spin-Off Calendar – January 2023

Published monthly, The Spin-Off Calendar provides one-page summaries of every spin-off under coverage from the announcement date, followed by the filing of the Form 10 and continuing 60 days post completion.

Spin-Off Report Compendium – January 2023

Murray Stahl’s commentary on various investing themes and single stock recommendations.

Bits & Pieces

Covers mispriced stub securities, tracking stocks and other arbitrage opportunities.

Product Specialist

Rich Albanese
ralbanese@pcsresearchgroup.com
+1 646-839-5566

The Weekly Wrap-Up provides summaries of recent publications from Hidden Opportunities including links to the full-length research reports.  If you haven’t engaged with the research over the past seven days, the Weekly Wrap-Up will quickly update you on our newest and highest conviction ideas.

Newest Publications & Updates

UPDATE:  Griffon Corp. (GFF)
January 9, 2023

On January 9 GFF announced a cooperation agreement with Voss Capital, a ~6% holder, that would see its chief investment officer, Travis Cocke, appointed to the company’s Board (as well as add him to the Nominating, Governance and Strategic Consideration committees). Additionally, following the 2023 Annual Meeting, Voss will “select and appoint” an additional independent director (with the Board overall size not to exceed 13 members).

Our base case fair value estimate for Griffon Corp. (GFF) remains $46.50 per share, reflecting a blended multiple of 9.3x on F2023 adjusted EBITDA of $427.7 million along with projected net debt of ~$1.44 billion (see Exhibit #1 on page 2).

UPDATE:  RCI Hospitality Holdings Inc. (NASDAQ: RICK)
December 29, 2022

Close coverage of RICK with shares trading roughly in-line with our fair value estimate; we will look to re-recommend if/when valuation shifts or incremental steps toward strategic alternatives emerge.

For context, RICK has returned ~95.5% (compared with a ~1% increase in the S&P 500 and a ~2.75% rise in the Russell 2000) since our initial recommendation in June 2022.

INITIATION:  IAC Inc. (IAC)
December 28, 2022

IAC has a long history of value unlocking transactions, in which it has typically acquired relatively nascent businesses, grew them, both organically and by acquisition, and ultimately monetized them via spin-off or sale, including, among others, Ticketmaster, ILG, Lending Tree, HSN, Expedia, TripAdvisor, Trivago, Match Group, Angi, Inc. and, most recently, Bluecrew.

In our view, shares are currently undervalued with the implied value of its private holdings (the so-called “stub”), based on the current market prices of its public holdings inclusive of net debt, at $1.06 billion, which is notably the lowest implied value seen over the last two years and well below our $3.23 billion fair value estimate.

In terms of its private holdings, based on IAC’s guidance & commentary, as well as peer and M&A valuations, we value Dotdash Meredith at $26 per share and Emerging & Other at $10 per share, which awards per share values of $7 and $3 to Care.com and Vivian Health, respectively, while assigning zero value to the other businesses (i.e., Mosaic, The Daily Beast, IAC Films & Newco). Search’s profits are assumed to partially offset corporate costs while Turo is valued at ~$3 per share. For its public holdings, based on the current market prices, we value ANGI at ~$11 per share and MGM at ~$25 per share. Accounting for remaining corporate costs as well as net debt yields a total sum-of-the-parts value of ~$67 per share (with bull and bear cases of ~$92 and ~$43 per share, respectively).

Radar Screen – January 2023

Monthly publication providing ongoing analysis on companies where we see potential for a value-unlocking event

Companies discussed this month:  Amerco (UHAL), Crown Holdings Inc. (CCK), Griffon Corp. (GFF), Hasbro, Inc. (HAS), IAC Inc. (IAC) JELD-WEN (JELD), Liberty Broadband (LBRDK), Lions Gate (LGF), Matthews (MATW), Par Technology (PAR), Penn National Gaming (PENN), RCI Hospitality (RICK), Teck Resources (TECK), Tiptree Inc. (TIPT), The J.M. Smucker Co. (SJM), Western Digital (WDC), Whirlpool Corp. (WHR)

Product Specialist

Rich Albanese
ralbanese@pcsresearchgroup.com
+1 646-839-5566

The Weekly Wrap-Up provides summaries of recent publications from Hidden Opportunities including links to the full-length research reports.

If you haven’t engaged with the research over the past seven days, the Weekly Wrap-Up will quickly update you on our newest and highest conviction ideas.

The Weekly Wrap-Up provides summaries of recent publications from the Spin-Off Report including links to the full-length research reports.

If you haven’t engaged with the research over the past seven days, the Weekly Wrap-Up will quickly update you on our newest and highest conviction ideas.