Recently my Special Situations portfolio acquired shares of Bridgepoint Education (NYSE:BPI) in order to take part in its tender offer. The company conducted a tender offer for 10.25 million shares for $19.50 per share, or about $200 million. I think the move was an excellent use of shareholder capital, but I'm moving on, selling any shares that remain in my account after the tender.
I think the stock still has upside from here, but I have another excellent opportunity that I'd like to take advantage of first.
A brief recap
My portfolio first acquired Bridgepoint stock in May 2012. I liked the huge cash balance and profitable operations combined with a low P/E. I purchased 50 shares at $19.36.
Then the bottom fell out, when the accreditation brouhaha broke. That took nearly a year to be resolved. In the interim, I acquired more. In April I doubled down, adding another $1,000 to the position, buying 100 shares at $10.02, at near the 52-week low.
Then following the announcement that Bridgepoint would not have problems with accreditation, I added a third stake after the stock had been de-risked. I bought 63 shares for $15.91.
In these first three trades, my average buy price came to $13.95 on the 213 shares. At its most recent closing price, that amounts to a 30% return.
Then I added 600 more shares to try to take advantage of the tender offer, a purposely short-term trade.
Foolish bottom line
So my Special Situations portfolio is selling any stock not acquired as part of the tender, because I have an excellent new buy recommendation. If you'd like to know what it is, follow me on Twitter (@TMFRoyal) or on my discussion board.
Jim Royal owns shares of Bridgepoint Education. The Motley Fool owns shares of Bridgepoint Education. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.