In the stretches where mfi has performed the best, there has been a decent amount of merger and acquisition activity. It is a quick way to unlock the value of value stocks. KSW hit the wires earlier this week. They were a classic value stock, albeit a small market cap.
Today, another one hit, MEDW. Sadly, I did not partake in this one (a snappy 39% premium, even so drawing the ever present greenmail lawsuit). However, MEDW is in my spiffy 50 portfolio which s now up 15% on the year.
I wonder whether these are one hit wonders or whether more m&a is on the horizon. There are still numerous low-valued stocks and a well-rated company can borrow pretty cheaply (or perhaps use cash already on the balance sheet).
Stay tuned.
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