This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Talking Panic Buying With Joe Feshbach

Hedge fund manager Joe Feshbach looks for value in crisis. The manager of Joe Feshbach Partners seeks out companies that are in trouble, anything from accounting scandals to criminal investigations to management turmoil. In short, Feshbach likes to buy when everyone is selling. In an interview with, he describes his contrarian style and some of his picks. As always, the positions mentioned are subject to change without notice.

Your portfolio is very concentrated. Why?

Joe Feshbach: Concentrated investing has been advocated and practiced by many legends of the equity markets, including Warren Buffett, Carl Icahn, Joel Greenblatt and others since time immemorial. We hold six positions today, because we believe that by investing very selectively in very few situations where we have developed specialized expertise, we can significantly outperform over a three- to five-year horizon. By diversifying beyond 10 stocks, academics have demonstrated that it is highly likely that your returns will closely mirror the market.

Talk to us about investing in companies under government investigation.

United Rentals (URI ) became subject to a formal order of investigation from the SEC regarding certain accounting matters in the summer of 2004. This kicked off a panic selloff followed by a relatively protracted period of stock underperformance. We got involved in July of 2005, when the chief financial officer was fired for failing to cooperate in an audit committee investigation tied to the SEC inquiry. Our theory was that the issues in question were from periods several years back, and investors were missing the strong business performance of the company. The stock has appreciated about 70% from our cost, as the investigation turned up little of concern and their business remains healthy.

What about accounting scandals or restatements?

One of our largest positions today is Sirva (SIR ), which has been in the midst of an accounting flap including accusations of impropriety by the company's former CFO, an SEC inquiry, a multiyear restatement, delayed SEC filings and violations of loan covenants. The stock has declined from $28 at its peak in 2004 to just $8 or so today, and slightly above our average cost. We believe that the scandal has disguised a strong business, which, while having a few issues around the edges, may be as much as 60% undervalued today. Our intensive grass-roots research and financial analysis skills (honed during our years on the short side) have given us great confidence in this situation.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,356.87 +288.00 1.69%
S&P 500 2,012.89 +40.15 2.04%
NASDAQ 4,644.3120 +96.4780 2.12%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs