- 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.
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.