My Midyear Value Investing Highs and Lows

 | Jul 10, 2017 | 10:00 AM EDT
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It's hard to believe we already are past the midway point of 2017, which means it's time to take stock of this year's hits and misses. By nature, as a value investor, I'd generally be inclined to put the misses first, but likely would get some heat from my RealMoney editors for approaching it that way. So, I'll start with the positives instead.

The biggest winner has to be Bob Evans Farms Inc. (BOBE) , a special situation that is up more than 50% year to date and more than 100% over the past nine months. Bob Evans was the type of situation that value investors live for: a somewhat-forgotten, asset-rich name that ultimately sells off some assets -- in this case, its restaurant business -- to concentrate on a more lucrative business, namely prepared foods. I recently closed the position due to valuations, but am eager to identify the next one, which is easier said than done.

Double-net Kulicke & Soffa Industries Inc. (KLIC) , which is up 25% year to date, is one of the cash-rich and profitable names that I've held out as a potential acquisition candidate. At of the end of last quarter, Kulicke & Soffa had around $8 per share in cash and short-term investments and just $16 million in debt. That cash balance may change given last week's acquisition of privately held packaging lithography name Liteq BV, but terms of the deal have not been disclosed. Kulicke & Soffa trades for about 13 times next year's consensus earnings estimates.

Double-net West Marine Inc. (WMAR) is up 23% year to date, with much of that increase due to late June's announcement that the company will be taken private at $12.97 a share. That's yet another double-net that has been taken out ; in this case, the price is too low.

A more recent positons I've taken this year that is working so far is CPI Aerostructures Inc. (CVU) , which is up about 40% over the last three months. A June acquisition, Vera Bradley Inc. (VRA) , is up about 10% since then -- nothing to write home about, but I still believe the name is cheap. The jury is still out on this one.

A more mainstream name, Corning Inc. (GLW) , continues to plow ahead and is up 26% so far this year.

One net/net I was wary of, Sears Hometown and Outlet Stores Inc. (SHOS) , is down 50% so far in 2017.

The Losers

The biggest loser is struggling restaurant name Ruby Tuesday Inc. (RT) , which is down 39% year to date. This was another special situation, but the company's pursuit of "strategic alternatives" has not born any fruit, and the odds get longer as each day passes. This is a company likely worth more dead than alive. Ruby Tuesday has called for its annual shareholder meeting to be moved up to December because of its strategic review process, but I'm not viewing that as a positive at this point; it's still five months away.

Double-net Fitbit Inc. (FIT) is down 30% since I took an initial stake in mid-December and off 28% year to date. Still hated by the markets, the company is trying to find its way while suffering from the aftermath of its short-lived cult stock status and declining revenue and guidance.  Growth investors have moved on, leaving the value types to decide whether the company, which trades at just 1.97 times net current asset value and has more than $3 per share in cash, is a falling knife or worthy of purchase.

Farming REIT Farmland Partners Inc. (FPI) is down 19% year to date. It has lost all of its ground (pun intended) since merging with American Farmland and investors have soured on the name. Farmland Partners currently yields 5.8% and is one that I'll continue to hold while reinvesting dividends.

I've got some work to do, obviously.

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