Actavest Opportunities

Capitalizing on mispriced securities

Combining research, risk management, and active dissemination of our ideas 

The Actavest Opportunities Solution currently comprises two separate strategies focused on identifying mispriced securities. It is an opportunistic strategy that is only invested when opportunities present themselves - the rest of the time we are invested in cash or short-term government bonds. 

Fallen angels strategy

Uncovering value opportunities created by irrational investor sentiment or misunderstood companies
The Concept
  • When negative investor sentiment dominates price action and becomes irrational; ⇒
  • Fundamental valuations often become overlooked; ⇒
  • Resulting in attractive investment opportunities to buy good companies at cheap prices.
What we do
  • Use a systematic process to identify potential "fallen angel" candidates.
  • Perform rigorous analysis and research to understand the underlying value and catalysts for a turnaround.
  • Accumulate positions in our top ideas as prices accommodate our risk reward hurdle rates.
  • Elaborate our thesis and disseminate online to investment related publishers.
  • Manage the trade and exit the positions as market conditions play out.
Holding period
  • Medium to longer term.
 
Case study

In this case, we identified a REIT, Istar Financial (STAR) which was being perceived as primarily a mortgage lender, still suffering from the 2008 real estate fallout, whereas in fact their profile had significantly shifted to being more like that of a landowner, in a good position to benefit from new home construction among other factors. We published our thoughts in September of 2012 and the stock experienced a 100% gain over the next 15 months.

 

 

 

Enlightened thesis strategy

Uncovering long or short opportunities created by a misunderstood investment thesis
The Concept
  • When the market misunderstands an investment thesis; ⇒
  • Fundamental valuations often become overlooked; ⇒
  • Resulting in opportunities to buy or sell companies at substantial variation from fair value.
What we do
  • Use a systematic process to identify mispriced securities.
  • Perform rigorous analysis and research to understand the underlying value.
  • Accumulate long call option or long put option positions in our top ideas.
  • Elaborate our thesis and disseminate online to investment related publishers.
  • Manage the trade and exit the positions as market conditions play out.
Holding period
  • Short term
 
Case Study

In this case, we identified Groupon (GRPN) as being underappreciated for the underlying value of their large subscriber base and laid out the thesis once Alibaba (BABA) announced taking an equity position in Groupon. This was a shorter trade and was implemented using call options. The stock price increased by about 30% in the three weeks following publication of our article.