market folly

At Invest For Kids Chicago yesterday, John Keeley Jr. of Keeley Asset Management gave a presentation on going long ITT Corp (ITT) and some savings and loan companies.

Be sure to check out all notes from Invest For Kids Chicago where numerous high profile hedge fund managers shared their latest investment ideas.


Long ITT Corp (ITT)

Keeley runs $5 billion focused on long-only in the small and mid-cap space. He focuses on spinoffs, cap assets, emerging from bankruptcy, below book value, S&L conversions, and distressed 'wayward' utilities.

There have been 849 spinoffs since 1895 (around 33 per year). He singled out ITT Corp as they focus on industrial products. It trades at 20 and they think it's worth 26+. People are ignoring it because they like the water business (Xylem Inc - water products & services, Exelies - defense & has the highest upside but also the highest risk because of defense spending questions).

Keeley also likes savings and loan companies but says you have to buy a basket in the small market cap arena. His best ideas are: Capitol Federal Financial (CFFN), Oritani Financial (ORIT), ViewPoint Financial Group (VPFG), Rockville Financial (RCKB), and Territorial Bancorp (TBNK).

You can view full notes from Invest For Kids Chicago here.