- My favorite ETF is AdvisorShares TrimTabs Float Shrink ETF (TTFS)
- It has more than doubled since its recent inception
- Even after doubling, I still think it is an attractive long
Ice is almost out on Rangeley Lake.
With warmer weather ahead, my mind starts to wander to lazy ways to allocate capital without too much work. Thus, one of my few ETF ideas for your consideration.
The goal of AdvisorShares TrimTabs Float Shrink ETF (TTFS) is to beat the Russell 3000 (NYSEARCA:IWV), which it has consistently succeeded at accomplishing since it launched. It also attempts to do so with less volatility than its index.
This $222 million ETF is focused on companies with net share count reduction. One of the keys to its success has been in owning a large number of deal targets. According to Bloomberg, it has had 57 exits via acquisition, which is over one per month. These takeover targets included Kraft (NASDAQ:KRFT). Bloomberg also notes that it contains several prospective takeover candidates including Starwood (NYSE:HOT), Zoetis (NYSE:ZTS), Scripps Network (NYSE:SNI), and Rockwell Automation (NYSE:ROK).
So why do I care? I care because one of the major differences between getting paid as a shareholder and getting paid as a manager is whether or not one cares about value on a per share basis. My favorite management teams focus on value per share. Often, they reduce their shares outstanding over time in companies such as Loews Corporation (NYSE:L):
I don’t spend much time philosophizing over whether they are making me money because they are good managers or because they are large shareholders; in the case of the Tisches, I suspect that it is a large measure of both.
Another of my investments with a share price that has been rising while its share count has been falling is Ocean Shore Holding (NASDAQ:OSHC). This small bank is a likely takeover candidate in the near future, but the takeover price per share will be improved by the management’s constant buybacks while we await the bank’s sale to a strategic buyer:
