Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Insider Places a Very Big Bet on Horsehead Holding

Not a single corporate officer has bought a single share of Horsehead Holding (NASDAQ:ZINC) in at least the past two months, according to Form 4 filings with the SEC — but that doesn’t mean insiders are avoiding Horsehead stock. To the contrary, one “statutory insider” of the company, one which owns more than 10% of the company’s shares, just made a big bet on the zinc miner’s stock bouncing back.

Big time.

Specifically, according to SEC filings published on July 22, Dalal Street, LLC, purchased 581,393 shares of Horsehead Holding on July 20. With purchase prices averaging $7.91 per share, that amounts to a $4,598,287 investment — or more than 1% of Horsehead’s market capitalization, all bought on a single day. Dalal Street is the investment vehicle used by famed value investor Mohnish Pabrai.

Mohnish Pabrai
Mohnish Pabrai
Mohnish Pabrai

What does it mean to you?
Coming just weeks before Horsehead Holding is due to report Q2 earnings (on August 7), Dalal’s investment this week suggests that “someone knows something” — or at least strongly suspects something, and probably something good for Horsehead shareholders.

With Horsehead shares down 62% over the past year, this would be a nice change to say the least.

Still, before investors decide to let Dalal lead them to water, a few words of caution about Horsehead are in order: Firstly, the stock is not currently profitable, and analysts expect Horsehead to end this year with a loss. Second, the stock pays no dividend — so if earnings disappoint next month, there will be no dividend check to soften the blow. Third and finally, Horsehead is carrying a mule-load of debt — $418 million against less than $85 million in cash.

All of which is to suggest that Horsehead Holding looks like too much of a nag to be betting the ranch on. Sure, it could pay off correspondingly big, and Dalal seems to think it will. But until Horsehead has proven it can go the distance, the best approach here is probably to “bet small, lose small.”


This $19 trillion industry could destroy the Internet
One bleeding-edge technology is about to put the World Wide Web to bed. And if you act quickly, you could be among the savvy investors who enjoy the profits from this stunning change. Experts are calling it the single largest business opportunity in the history of capitalism… The Economist is calling it “transformative”… But you’ll probably just call it “how I made my millions.” Don’t be too late to the party — click here for one stock to own when the Web goes dark.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.