I’ve gotten a great response from my AIT stock pitch, and wanted to provide some additional commentary.

My goal for the presentation was to provide a clean look-and-feel, and not clutter the slides with tons of bullet points (the finer details would come out during the discussion).

Here are some talking points which loosely translate to my actual presentation. Hope it provides some further explanation/clarification.

Company Overview

• AIT provides distribution, repair, and value-added services for industrial customers
• Distribution network provides a competitive advantage (if machinery goes down, customers need to get it up and running ASAP. more distribution centers – > faster response time)
• Growing part of business is fluid power (~20% of sales). Higher margins than traditional industrial distribution

Investment Thesis

As I mentioned previously, I decided to go back to school for my MBA at the University of North Carolina with the intentions of pursuing investing full-time.

I joined the Investment Management Club, and just finished participating in the internal stock pitch competition – and I ended up winning 1st place!

The goal of the competition is to introduce students to the mechanics of delivering an effective stock pitch – developing a thesis, performing a full valuation, presenting in front of judges, etc. – and was designed to be a “low-pressure” way to practice for the more high-profile competitions.

We had 7 minutes to deliver the pitch, with a 3-5 minute Q/A session to follow. Stocks had to be in the Industrials sector, with a minimum market cap of $500m.

I ended up choosing Applied Industrial Technologies (AIT), a $1.2b industrial distributor. I’ve included my presentation below:

[scribd id=73944220 key=key-1ne3g7jmml3dxra99bwe mode=list]

Next up: UNC will be hosting the Alpha Challenge in November, one of the premier MBA stock pitch competitions.

Needless to say, I’m looking forward to it!

Disclosure: No positions.

Last week marked the successful conclusion of my first liquidation investment – Terra Nova Financial (TNFG).

I originally picked up the stock back in October 2010, when the stock was trading below the lower bound of the director’s estimated liquidation range.

On August 15, the company distributed a press release announcing a final liquidation distribution of $0.103 per share payable on August 19, 2011.

This was a pleasant surprise, as TNFG’s March press release had estimated a final stub payment in the range of $0.04 – $0.07 per share.

Here are the final results of the workout:

Not stunning, but a nice result for my first attempt at this type of investment.

Joe Ponzio at F Wall Street summed up a good maxim for investing in workouts:

“The question is: Upon thorough analysis, do they offer safety of principal and a satisfactory return. To answer the first part, you must know the deal; to answer the last part, you must know the timeline.”

If you have followed the series of posts on TNFG, the one constant is my utter inability to predict the timing of the various payments – but I at least had a timeline and worst-case scenario in mind.

The lesson here is to always be extremely conservative when estimating the timing and return possibilities for these type of investments.

While the returns are certainly welcome, the best part about these types of opportunities is that they are largely uncorrelated with the rest of the market.

In these volatile times, I’d be very happy putting a much larger percentage of my portfolio into these types of scenarios, and will be actively searching for similar situations.