HII Update + Another Spinoff

Huntington released an 8k with their executive comp details and it looked pretty tame. I'll take a pass.

In other spinoff news, interesting to see John Malone's name crop up in the latest - as a major (indirect) shareholder in Expedia. Of course with his interest in it, there will probably be a lot of close analysis of the transaction.

It's quite interesting that the news was released on the same day as news of justice department approval of Google's purchase of ITA (travel data). I know almost nothing about these companies but that looks like it could be neutral news for the Expedia chunk (they could commercialize their Best Fare Search data, little effect on hotwire) but very bad for Tripadvisor (as it becomes easier to order tickets after searching Google and their Hotpot/Places rating system grows). Yet market and analyst reaction seemed to focus on the value that can be unlocked for Tripadvisor.

A Small Put

I bought a few puts on Nomura ADRs (NMR). The main reason wasn't speculative; I wanted to see a trade all the way through on Interactive Brokers. I had recently been extremely gutted to find out I couldn't trade Japanese equities through them - their CSR said it was due to Japanese regulations but after poking around some message boards it looks like IB might be unique in their interpretation. I missed a couple thousand dollars on the trades I wanted.

The speculative reasoning was simple - I was looking for a large multiple payoff in the event of nuclear catastrophe. I had no special insight into the chance of that happening (I thought 1%-20%), but figured I wouldn't be trading against anyone who did - and option pricing models certainly didn't. So I didn't do any fundamental research and just looked over a few financial ADRs for some decent out of the money puts.

While the nuclear news has been mostly bad, it hasn't emptied Tokyo. I had mentally written the puts off as a 100% loss but got bailed out by the recent dip of the yen. Looks like I had lucky timing too; they were $5 strike 4/15 options I bought at $.20 and unloaded Wednesday at $.25

Currency

I'm not sure what currency or basket I should benchmark my performance in or hedge my expected expenses. Frankly, I have now idea where I'm going to be in a few years time. I might:

• Do an MBA in Singapore (Insead - EUR and SGD).
  
• Do an MBA in Australia (University of New South Wales - AUD)
• Look for a job in the US (USD)
• Continue working in Japan (JPY)

So a split perhaps? 12.5% EUR, 12.5% SGD, 25% AUD, 25% USD, 25% JPY? The thing is those don't even look like currencies any more; they look more like bets. EUR on the PIIGS, USD on Ben, JPY on the bureaucracy, AUD on resources. I'm currently about 50/50 USD and AUD (including having sold next year's expected YEN savings) but extremely uncomfortable with the situation.

HII

I recently read Joel Greenblatt's book after reading Mike Burry's recommendation in The Big Short, so I thought I'd take a look at some spinoffs (Blatt's stomping ground of choice). Huntington Ingalls Industries will be spun out of Northrop Grumman. A quick skim looked appealing - the industry PE ratios were around 10x, restructuring/writeoff charges depressed recent earnings, it's a leveraged transaction, and the transaction required and received Navy approval.

Since the only important customer is the Navy, I figured insider positions were even more important than usual for this transaction. However, I haven't been able to find insider positions! The 224 page information statement simply reported 2010 compensation info. The SEC filings for initial positions show blanks. I thought I read somewhere that the relevant data would be posted on huntingtoningalls.com but the website isn't live yet (despite the stock being tradeable for a couple days). Maybe this is normal but it seems strange to me. If I can find that information in the next few months I'll research this issue more.