Prem Watsa’s Big Bet an Acquisition Candidate?

Nicholas Vardy

Nicholas Vardy has a unique background that has proven his knack for making money in different markets around the world.

U.S. stock markets traded down last week, with all three major averages pulling back.

The Dow Jones Industrial Average lost 0.69%, as did the S&P 500. The tech-heavy Nasdaq fell by 0.95%. The MSCI Emerging Markets Index recovered by 1.05%.

Your Smart Money Masters holdings continued to move independently of the markets. Long suffering Navigator Holdings (NVGS) soared 10.42%. Baxter International (BAX) continued upward, rising 3.46%. Both PayPal Holdings (PYPL) and the Vanguard FTSE Emerging Markets ETF (VWO) eked out slight gains.

Several of your positions continue to trade below their 50-day moving averages and therefore are HOLDs. VWO, however, has moved back to a BUY.

The underlying factor affecting Navigator Holdings’ stock price is the health of the oil shipping market and, in particular, the rates that oil and natural gas shippers can charge for their services. With the tumbling price of oil, these rates are trending down.

So, investing in Navigator Holdings alongside Wilbur Ross is a big bet that the tanker market, depressed for so long, is finally set to turn around. Inevitably, Navigator’s stock prices will follow suit. When it does, the price will move very sharply, as it did this past week.

Meanwhile, BlackBerry’s (BBRY) Q1 profits surged on account of the $940 million one-time arbitration award from Qualcomm. The stock pulled back sharply, however, on news that revenues in the software segment missed expectations.

There is, however, new buzz about BlackBerry as a potential acquisition candidate.

Recall that Blackberry’s most attractive asset is its autonomous driving software already used by 60 million users. Google and Apple are both looking to build an operating system for autonomous vehicles. Tesla and Samsung are also players in this space. Finally, Qualcomm, NVIDIA and NXP Semiconductor each have compelling reasons to acquire BlackBerry.

Exclusive  Senior Brazilian Fund Returns over 63% for the Year

In short, BlackBerry has a lot of potential suitors. Don’t be surprised if a bidding war erupts for BlackBerry — resulting in a buy out far above its current share price.

Portfolio Update

Sincerely,

Nicholas Vardy

Nicholas A. Vardy

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