I think it's precisely the serial underperforming nature of WIL that's going to make it a decent buy. The investment manager's had some real shockers - e.g. Photon, Credit Corp - and their track record is ordinary at best. Based on its past performance I can't see there being any significant support among existing for WIL to continue as it is, and among new investors (like me) they'll all be in it purely to seize upon a liquidation event.
In other words, I believe the the overwhelming WIL shareholder base is looking for a way out of their stock.
All it takes is a catalyst - say, an activist shareholder - to rally the dissatisfied shareholders, and bang, there's an instant 20% gain right there.
I think in hindsight, in a few years time, people will look back and see WIL right now as having been a golden opportunity. Consider these factors:
- The WIL shareholder base at the moment probably consists of something like (my own very non-scientific estimates) 50% dissatisfied shareholders looking to get out, 20% dissatisfied shareholders who are in a position to band together (ie. the ones who got in due to a well known tipsheet's advice) and turf management, and 20% who have recently bought in looking for a liquidation opportunity.
- There's collectively around $20m sitting on the table right now waiting to be taken, being the difference between WIL's market value of around $85m and its net assets position of $105m.
- Management can't put up much of a fight with none of them owning more than 5% of the total shares.
These factors combined IMHO lead to a strong chance of a liduidation/takeover event for WIL in the near future.
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