BBAY.L BlueBay Asset management

I bought BBAY.L on 14-Jun-2010 at 277p per share. At he time, I noticed that they were on a PE of 12, yield of 5%, a growth of 173% in EPS expected for the forthcoming year, and 31% for the subsequent year. It seemed quite an attractive opportunity.

Here's some notes I wrote:

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28 jun 2010 update
greenblatt rank 937/2917: 32%
ev1 = 558 - 4 - 87 =467
ev2 = 4.31*107 = 461

rbit = 26
ey = 26/361 = 5% Poor
On forward:
ey = 57/461 = 12% better

ce = 17 + 87 = 105
roc = 26/104 = 25% very good

OL = (17+87)/100 = 1.04 very good
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29 jun 2010 BBAY loses star fund manager

The price currently stands at 483.5p. Subsequent developments since my purchase is that it is being bought out. I still hold the shares, but they will be suspended on 16-Dec-2010, and I ought to get the money at the end of December, maybe early January. The takeover price is 485p. The shares have, therefore, been a very good buy for me. Analysts have said that the price paid is more than the estimated intrinsic real worth of the business.

BBAY has been my best return for the year. A considerable amount of luck was involved, as I had no idea that it would be taken over at a huge premium. The combination of huge yield, increasing projected earnings seem to have really helped it. It earned good ROC, and its ROA were through the roof. Note that the PE wasn't in the super-low valuations. A PER of 12 is somewhat undemanding, but not super-low.