Rover ($ROVR) being acquired by Blackstone for $11.00/share
Good morning,
Several days ago I sent out part 1 of my ROVR deep dive because I had turned bullish on the company after seeing their Q3 earnings report where top line revenue growth was strong (above 30%) and margins were expanding faster than expected. In fact management said their long-term EBITDA margin forecast of 30% was looking too low.
I thought ROVR had 100-150% upside over the next 3-4 years so I had started a ~1.9% position (approx 2 weeks ago) which I still had coming into today.
Earlier this morning Blackstone announced they were acquiring ROVR for $11.00 per share which was a 30% premium to yesterday’s closing price. Personally I think $11.00 is too low but it’s not my decision to make. I sold my ROVR shares this morning at $11.05 to take the profits. I don’t think this deal gets blocked by FTC/DOJ but I’m not in the arbitrage business so big pops like this should be sold.
With that said, there’s no point in sending out part 2 of the ROVR deep dive which was supposed to go out tonight.
I’m still deciding on my next deep dive, I have a few candidates but need to update my investment models and go through some Q3 earnings reports and webcasts before I make a decision.
To be honest it’s getting very hard to find large cap companies where fundamentals are strong and valuations are reasonable. I see too many large caps trading at 50x 2024 earnings with 20-30% growth rates, just not attractive in my opinion.
I do believe that small/mid caps ($1-10 billion market cap) are the most attractive at current prices (obviously not all of them, still need to be selective) so that’s where I’ll be focusing my efforts. I’m still trying to find stocks with 100-150% upside over the next 3-4 years just like most of my winners over the past few years including CELH, UBER, SMCI, TMDX, NU, MELI, FOUR and many others.
If you have strong conviction for any small/mid caps please feel free to share them with me and I’ll take a look. Please don’t send me anything too speculative.
Thanks,
Jonah