Bought MRV Communications, Inc.

I initiated a position (~7.4% position) in MRV Communications, Inc. (Ticker: MRVC) at $9.95. MRV Communications is being acquired by a German company, ADVA Optical Networking SE for $10.00 in cash. This deal is being structured as tender offer with the tender expiring on 08/11/17. I am modeling that this deal closes on 08/11/17 with the cash hitting the account by 08/18/17. This would generate a net gain of 0.50% (~10.6% annualized return).

July 2017 Performance

July turned out to be decent month with Constellation Brands (Ticker: STZ) and Visa (Ticker: V) marching to new highs following their strong earnings reports. I also received a nice dividend payout from the Syngenta acquisition.

I continue to be very cautious with the merger arb / special situation plays. I did manage to execute several small merger arb / special situation trades this month: (1) Panera Bread – I would call this a wussy arb trade as the annualized return was only in the mid-single digits. I bought some common and sold the out of the money calls. This was a super safe deal. (2) Alere – I sold some out of the money puts. I recently closed out the position with a small gain. (3) I traded around Scripps Network Interactive. The gains were modest as I did not go in big. I’m always a bit leery with stock + cash deals.

So that really sums up the month of July. Yes, it was another dull and boring month with very few trades. Sometimes it’s good to just sit still and wait for opportunities to show up…

2017 Performance Year to date = +26.95% with the running monthly returns as follows:

January -4.50%
February +10.18%
March +5.1%
April +4.34%
May +5.67%
June +1.34%
July + 2.76%

Sold Scripps Network Interactive

I sold my position in Scripps Network Interactive (Ticker: SNI) today at $83 generating a net gain of 1.99%. I don’t see a big premium from here if it’s an all cash bid from Viacom (Ticker: VIAB). I'm just playing things conservatively in this market environment.

Bought Scripps Network Interactive

I’m bit late to the table, but I took a small stab at Scripps Network Interactive (Ticker: SNI) today at $81.38 (6% position). It looks more and more likely that Discovery Communications (Ticker: DISCA) will come out as the winning bidder for Scripps Network (Ticker: SNI). There’s probably not much of a premium at the current price, but I believe there’s still some money to be made. We’ll see next week if Viacom (Ticker: VIAB) or Discovery Communications emerges as the winning bidder…  

June 2017 Performance

I can’t believe we’ve already reached the half way point of the year… I just squeaked out a gain of +1.34% for June with help from Constellation Brands (Ticker: STZ), which announced strong results this past week with the stock hitting new highs. It’s been an amazing run for Constellation Brands as the company was the prime beneficiary in Anheuser-Busch InBev’s (Ticker: BUD) acquisition of Grupo Modelo back in 2013. I believe there’s still plenty of upside remaining in the stock as their Mexican beer portfolio: Corona, Modelo Especial (my favorite!) and Pacifico are continuing to gain strong momentum. This is a keeper for the foreseeable future.

June was definitely a quiet month for me as I did not execute any trades. Just sat around waiting for a good risk / reward merger arb opportunity.

Now looking back at the past 6 months, I guess the trade that stands out the most was the blowup in Rite Aid (Ticker: RAD) back in January. That trade really made me focus on risk management. So in a way, I’m glad that I was able to experience this loss in the beginning of the year and really build from the experience.

Here’s a snap shot of my current portfolio:

That’s about it for now…   

2017 Performance Year to Date = +23.54% with the running monthly returns as follows:

January -4.50%
February +10.18%
March +5.1%
April +4.34%
May +5.67%

June +1.34%

May 2017 Performance

May was another replay of the March / April performance. The bulk of this performance can be attributed to my positions in Constellation Brands (Ticker: STZ) and Apple (Ticker: AAPL). Both Constellation Brands and Apple were fairly stagnant in 2016, but they have finally awaken in 2017. The closing of Syngenta (Ticker: SYT) was also a positive contributor to the results.

Right now things are very quiet with no positions in any arbitrage / special situation plays. I’m just patiently waiting for the next opportunity to pop up. I do have a healthy cash position (~13%), which is rare for me. I’m usually 100% + invested at most times, but there are instances where cash just builds up as there is nothing compelling to buy.

Hopefully a decent merger arbitrage / special situations play(s) will present itself in the second half of the year. Just playing things conservatively for now...

2017 Performance Year to Date = +21.93% with the running monthly returns as follows:

January -4.50%
February +10.18%
March +5.1%
April +4.34%
May +5.67%

Sold IvenSense

I sold my position in IvenSense (Ticker: INVN) today at $12.95 generating a net gain of ~ 0.90% over a 6 day period (~54% annualized return). I’m not going be greedy and try to capture the last $0.05. It was a nice quick gain and time to move on…