Mosaic Capital (M-X)

Likes the management team; it’s just the business model that he doesn’t really like. Generally they have a portfolio of about 12 investments, and if he is going to invest in something along that basis, he would make those investments himself. Unless there is something particular in those portfolios that he can’t replicate himself, he would rather do it directly. Dividend yield of 5.7%.

The big picture is reasonable, but it may be possibly breaking down. He doesn’t like that the chart shows a series of troughs that it has successfully tested, and it kind of appears to be breaking down right now. Looking for higher highs and lower lows, this may be on the verge of taking out that last low. It’s a little early to tell, but be a little cautious. Volume has been quite light in the last several days, which would indicate a lack of conviction.

Sold his holdings too early. Management is really solid. The overall business strategy of acquiring accretive companies still makes sense. Likes the way they fund themselves. They use a preferred share, which is redeemable, so they don’t dilute the common shareholders as much as other acquiring companies do. Hasn’t looked at this one closely lately. Typically you will do well in this scenario.

Sharp management. They are acquiring diverse businesses and funding a dividend with it. Attracting investors and capital with their dividend on both the preferred and common stocks. They generally take a majority position. The one caveat is Western exposure. Expect the dividend will grow.