An Activist’s Top Trades And A Bullish Case For Starbucks

A pair of market experts recently joined PreMarket Prep to share some favorite trading ideas. Ron Bienvenu is a managing member of Spear Point Capital Management LLC and an activist investor.

First NBC And GSE Systems

Bienvenu discussed the incredible recent volatility in First NBC Bank Holding Company FNBC 3.38%.

“It has been a wild ride. The backstory on this is the company was very successful in growing using some fairly innovative accounting methods for tax credits and building a highly-specialized business around that. The problem is, on the Basel III, those accounting methods will probably no longer be sufficient to rate as capital on their balance sheet, so they’ve got a fundamental problem,” he explained.

“From where I sit, it looks like you’re going to have to restructure this business through the FDIC, so our bet is the equity is probably worth zero.”

On the other hand, Bienvenu is extremely bullish on nuclear energy play GSE Systems, Inc. GVP 4.84%.

“We think they have the best small-cap management team possibly in the country […] They have the biggest backlog in their history, and they signed a $75 million deal earlier this year.”

Bienvenu said he wouldn’t be surprised to see the stock double within two years.


PreMarket Prep was also joined by Motley Fool writer Daniel Kline, who gave his take on Starbucks Corporation SBUX 0.28% and mortgage giants Federal National Mortgage Assctn Fnni Me FNMA and Federal Home Loan Mortgage Corp FMCC 0.66%.

Kline started off by pointing out that Starbucks is facing some negative political headwinds, but it doesn’t have any real long-term competition.

“Starbucks really dominates the upscale café coffee market […] long term, they’re improving their technology and they have a huge amount of people in their app. That’s a big advantage,” he explained.

Kline compared Starbucks to, Inc. AMZN 1.74% in that it has a loyal, entrenched customer base of app users. That setup should provide…

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