There has only been a very limited interest in the name today after the U.N. resolution.  As of yesterday, The Net Asset Value of the Herzfeld Caribbean Basin Fund, Inc. (NASDAQ: CUBA) was listed as $7.25 on the company website.  Yesterday’s closing bell price was $6.75 and today’s current share price is up 0.6% at $6.79 on close to 21,000 shares.  The 52-week trading range is $5.62 to $7.06 and the fund trades on average only about 10,000 shares a day.

As far as what the fund’s objective is for capital appreciation, it “invests in issuers that are likely… to benefit from economic, political, structural and technological developments in the countries in the Caribbean Basin, which consist of Cuba, Jamaica, Trinidad and Tobago, the Bahamas, the Dominican Republic, Barbados, Aruba, Haiti, the Netherlands Antilles, the Commonwealth of Puerto Rico, Mexico, Honduras, Guatemala, Belize, Costa Rica, Panama, Colombia and Venezuela.”  In short, this is not a pure-play for Cuba but it is the trading vehicle that usually wins when there is “‘investor-friendly” or “reopening” news or rumors about Cuba pertaining to the United States.

Normally, it would sound exciting that the Cuba Embargo even got a vote against it but the United Nations noted in its news release today that this resolution was adopted for the 19th consecutive year.  The U.S. houses the U.N., but it is not exactly a stretch to say that the U.S. does not really listen to the U.N. recommendations.

The vote was overwhelming with 187 members voting for an end to the embargo, versus only 2 against… The U.S. and Israel.  There were 3 abstentions: Federated States of Micronesia, the Marshall Islands and Palau.

Cuba is a mere 90 miles or so from Florida.  So close, yet so far away.

JON C.OGG

Reuters:   Automakers had a setback in June, an indication that the industry is facing slow growth.

Reuters:   The House passed a bill to extend jobless benefits, but the Senate may reject it.

Reuters:   Walt Disney (NYSE: DIS) bought Apple Inc. (NASDAQ: AAPL) iPhone game maker Tabulous.Reuters:   Google Inc. (NASDAQ: GOOG) bought online travel software company ITA Software for $700 million.

Reuters:   Dell Inc. (NASDAQ: DELL) bought Scalent.

Reuters:   Ed Whitacre of GM said 2010 would be a good year for the company’s IPO

WSJ:   Habitat for Humanity became one of the ten largest homebuilders in the US.

WSJ:   France and Germany are at odds over how Europe should be rebuilt

WSJ:   Mortgage bonds backed by the US government have become more attractive.

WSJ:   There is confusion about how the new financial reform bill will treat derivatives.

WSJ:   Deepwater drilling off Cuba threatens Florida beaches.

WSJ:   Healthcare companies are facing huge changes in how they do business.

WSJ:   Goldman Sachs Group (NYSE: GS) is defending its actions on trades with American International Group (NYSE: AIG) during the financial crisis.

WSJ:   Apple Inc (NASDAQ: AAPL) is still allowing Google ads on its iPhone and iPad.

WSJ:   GE (NYSE: GE) said that CEO Jeff Immelt’s attacks on China and President Obama do not reflect the firm’s views.

WSJ:   Blockbuster will be delisted from the NYSE.

WSJ:   As factory activity rebounds many workers do not have the necessary skills.

FT:   Fears are growing over slow economic demand.

FT:   Apple is pushing its on-demand movies business segment of its iTunes store.

Bloomberg:   Portable missile defend plans may cost $43 billion.

Bloomberg:   Carl Icahn says he owns 38% of Lions Gate.

Douglas A. McIntyre

The company listed the following data on its website today, with the values based upon last week’s close: Net Asset Value (unaudited) $4.37 per share; Closing Price $5.72.

This is not just a play on Cuba. It seeks to make investments that the manager feels are likely to benefit from economic, political, structural and technological developments in the countries in the Caribbean Basin.  This starts out listing this as Cuba, but it also includes many more places: Jamaica, Trinidad and Tobago, the Bahamas, the Dominican Republic, Barbados, Aruba, Haiti, the Netherlands Antilles, the Commonwealth of Puerto Rico, Mexico, Honduras, Guatemala, Belize, Costa Rica, Panama, Colombia and Venezuela.

The closed-end fund invests at least 80% of its total assets in a broad range of securities of issuers including U.S.-based companies that engage in substantial trade with, and derive substantial revenue from, operations in the Caribbean Basin countries.

The company’s listed information at NASDAQ shows it up 10% at $6.20 today, and its 52-week trading range is $3.11 to $9.18 on only about 35,000 shares.

Net asset values rise and fall with markets.  Whether or not this is for you is something that is, well, entirely up to you.  Investors should always look at the premium and discount in a closed-end fund and determine what funds really invest in for their own parameters.  These NAV’s are always just benchmarks, but they can be tracked rather easily.

This is deep into micro-cap territory as well.  Some days it trades under 10,000 shares.  When there is news on Cuba-US relations, we see many times the normal volume.

JON C. OGG

Herzfeld Caribbean Basin Fund Inc. (NASDAQ: CUBA) is actually the investment angle for this as far as U.S. investors are concerned.  The fund invests in companies that are perceived to benefit from normalized relations down the road.  Shares are up over 4% today at $8.37.  The volume is frequently light, and today’s 13,761 shares show that.  It has not seen a single trading session of more than 100,000 shares trade hands since February. 

The company’s web site also lists its Net Asset Value as $7.62 as of June 19, 2008.  The current market cap is listed as $31 million on NASDAQ, although we would caution that a fairly recent offering might make the number slightly different.

Jon C. Ogg
June 20, 2008

With the news that Fidel Castro will not be returning to official power to run the country, this will get a lot of attention today and this week.  We’d advise traders that the swings we see this week should be quite wild.  If you want to see how "Castro-rumors" in the past have moved this closed-end fund, look at the move in late-2006 and then again in early to mid-2007.  This saw similar moves in the earlier part of this decade and in the late 1990′s.  You can find more historical data at the herzfeld.com site.

Unfortunately we are still a long ways off from any normalized relations.  Fidel’s brother Raul has been in charge of the country for much of the last 18-months as Fidel has "been ill."  But the good news is that this is at least step one of a ten or twenty step process.  We have covered this one before for our "10 Stocks Under $10" letter, and this one is now looking like it can come to fruition.

We’d beware of any major gap-ups that are too high in this closed-end fund because its total share count is so small and the float is extremely thin.  Herzfeld also closed at a discount to its N.A.V. last week, and this used to trade at a slight premium to a large back when this was above $10.00.

Be advised that this recently had a float of about 1.7 million shares before the last distribution and its market cap was only about $12.5 million, but that appears to have roughly doubled after a fairly recent rights offering.  It has an extremely thin daily trading volume, so today’s moves are going to probably be quite exaggerated.

Jon C. Ogg
February 19, 2008