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.