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Tales From the Hedge Side: We Drop In on Shah Gilani
If you’ve been a Private Briefing subscriber for the last couple of years, you know we’ve had some big successes with strategies and stocks given to us by Capital Wave Forecast Editor Shah Gilani.
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On June 6, I identified El Paso Corp. (NYSE: EP) as a "Buy." The stock at the time was trading at $20.40 share.
Well, on Sunday (Oct. 16), Kinder Morgan Energy Partners LP (NYSE: KMP) said it would buy El Paso for $26.87 a share. That's a 32% premium to the price the stock was trading at at the time of my recommendation. EP stock yesterday (Monday) rose more than 24% to close at $24.45.
The Standard & Poor's 500 Index has slumped nearly 8% since June 6, so readers who followed my advice would have enjoyed a nice rate of return over the last four months, compared to the overall market.
The case that I made for El Paso back in June was a simple one: The company's assets were valued at less than the equivalent assets held by its peers. El Paso at the time was in the process of breaking itself into two parts, so it could unlock some of the trapped value.
Kinder Morgan recognized that, as well, and acted.