Whitney Tilson lists the 15 most common types of value opportunities in this article. These are the types of opportunities that Whitney has capitalised on during his investing career:
- Out-of-favour blue chips.
- Turnrounds of broken businesses.
- Cyclicals at the bottom of the cycle.
- Distressed industries.
- Overlooked small-caps.
- Fallen growth angels.
- Growth at a reasonable price.
- Piggybacking on activism.
- Let someone else do the investing. Think Berkshire Hathaway etc.
- Free/mispriced option. Where an ongoing businesses justifies the current market price and an investor gets a valuable option – in the form of a new market opportunity or turnround of a floundering business.
- Declining cash cow.
- Oddball companies. Companies that have a revolutionary business models that are poorly understood, resulting in cheap stock prices. Classic examples are Southwest Airlines, Dell and Kinder Morgan.
- Discount to the sum of the parts. Like Tyco before the recent spin-offs.