Following on from my article yesterday where I commented on some of bad news to sneak out over the festive 2011/2012 period (see here -The Good, Bad and the Holiday News), I will touch on some of the positive news items to also come out over this period.

Late last year Blackstar (BCK) made an offer to merger with Mvela Group (MVG) (see here -TAS, FGL, 1TM & BCK/MVG), but more recently Mvela shareholders holdings c.20% blocked this action. A pity, but ce la vie.

Even more recently, Blackstar has decided to initiated share buy back program. This is a technique that Blackstar has utilized in the past (when it was exclusively on the LSE's AIM market) to try and eliminate the discount to NAV that its shares trade at. The maximum share price paid for these repurchase shares has been pegged to no more than 5% above the average market value of the shares for the five business days preceding the day on which the shares are purchased.

Blackstar's current spot price is 1000cps.

Also, Blackstar's share repurchase is limited to no more than 14.99% of the Group's share capital.

The argument in favour of a share repurchase is that it is a company re-investing into itself and is anti-dilutionary for existing share holders. The argument against it is really that it can distort the share price of the company and if the share repurchase is mis-timed (look at Anglo American Plc's share buy back during the peak pre-2007 market!) it could in fact cost existing shareholders more than simply paying everyone a good dividend.

Personally, I prefer dividends to share buy backs. Still, a share buy back is better than nothing when a company has excess cash.

Alright, that was not the most positive news item, but it is noteworthy...

What is a little more of a positive festive season news item is the trading update from Blue Label Telecoms (BLU).

Blue Label is basically an electronic wholesaler of a pre-paid airtime and pre-paid electricity and has indicated that it expect its Core EPS and HEPS for H1:12 to be more than 20% higher than the comparative period last year. I currently have Blue Label as a defensive BUY recommendation at Thebe Stockbroking, as I like their cash generative defensive revenue stream (pre-paid airtime and pre-paid electricity are both inelastic).

What is interesting is the colour that Blue Label adds to the trading update where it explains that this rise in earnings is due to "...an extraneous transaction, the details of which are confidential...".

It will be interesting to see what exactly the "exraneous transaction" is...

Cyclical businesses do terribly in bear markets, but brilliantly in bull markets. Bell (BEL) is your atypical extremely cyclical business: not only does it sell capex items (vehicles and related yellow plant and machinery) into the mining, agricultural, industrial and construction industries (that themselves are cyclical), but Bell also has a cost structure that holds extreme operating and financial leverage.

Hence, it is extremely encouraging that Bell's trading update indicates that the FY 11 December results are expected to show an improvement of more than 20% due to "...an improvement in trading conditions and particularly demand from the mining sector."

This bodes well for, not just the mining sector, but in fact the other businesses servicing the mining sector, like PSV (PSV), TWP (part of Basil Read, BSR), Ansys (ANS), BWI (BWI), Metmar (who trades mined commodities as well as owns some mining/mineral assets, MML), etc...

Finally, Mercantile (MTL) was subject to a surprise bid from Bidvest to acquire it (see - Bidvest Bidding for Mercantile Bank). The bid fell through when Mercantile's 92% parent, Portuguese Caixa Geral de Depõsitos SA, blocked it.

This may have awakened Caixa Geral's to the fact that there is very little reason that an 8% free float company should ever be listed. Thus, Caixa Geral is more than likely to be the driving force behind Mercantile's announced intention to make an offer to its minorities to buy them out and this should result in its delisting.

If I were a Mercantile minority shareholder, assuming the price is right, I would take the money and run. MTL has underperformed due to its lazy balance sheet for years... I suspect nothing will change.

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