Friday, August 29, 2014

Intermune Arb Play

I’ve been striking out a lot this year on some special situations / arb plays. The averages will eventually catch up to you, but I’m patient and looking out for the next target. I had a good position in the Intermune, Inc. (Ticker: ITMN) common around $51 and sold for a small quick profit. You know what happened next… Right now, I’m playing Roche’s (Ticker: RHHBY) acquisition of Intermune by selling the $70 January 2016 Puts. This deal should closely fairly quick as Roche initiated the tender offer today.

Tuesday, August 26, 2014

Constellation Brands: Back To School

I always find it amusing when I read the following headlines: Constellation Brands (Ticker: STZ) to Present at Barclays Capital Back-To-School Consumer Conference, Sept. 4, 2014. I’m sure you know what Constellation Brands sell… booze as in Corona and Robert Mondavi. I have no doubt that students will go crazy for Corona. One of these days, I’ll head to one of their investor conferences so I can sample some of their goods. Constellation Brands continue to be one of my largest positions and plan on hanging on for the long haul…

Wednesday, August 06, 2014

Idenix = Done Deal

Merck (Ticker: MRK) completed its tender offer for Idenix Pharmaceuticals (Ticker: IDIX) for $24.50 in cash yesterday. I sold some (actually a good amount) of the January out of the money Puts and those will expire on 08/16/14 via accelerated option expiration due to the closing of the deal. I hope to see more of these types of deals in the future. Anyways, I’ve been raising some cash to ride through this volatile period.

Friday, August 01, 2014

July Results

Talk about end of month volatility! Would have thought there would some positive end of month window dressing… I corrected the June performance data as my brokerage firm did correct the option pricing that skewed the results. There weren’t many positions that contributed positively to the July performance. Idenix Pharmaceuticals (Ticker: IDIX) did help a bit as it received regulatory approval and Apple (Ticker: AAPL) held up well. Closed out some out of the money short Put positions from option expiration on Hilshire Brands (Ticker: HSH) and BE Aerospace (Ticker: BEAV), which helped the portfolio just a bit. The other positions were pretty much a draggg...

Now on to some other trades… I’ve cashed out of my common position in Idenix Pharmaceuticals at prices ranging from $24.42 to $24.44. I still have my out of the money short Put position, which I will likely let expire.

I picked up some Bally Technologies (Ticker: BYI) today at ~ $77.79. Looks like an interesting arb play as Scientific Games (Ticker: SGMS) is buying the company for $83.30 in cash. Unusually wide spread with a closing anticipated in early next year so I must be missing something here!

Performance Year to Date = +10.06% with the running monthly returns as follows:

January -0.67%
February +6.50%
March -2.69%
April -1.51%
May +7.30%
June +2.59%
July -1.46%

Monday, July 21, 2014

Idenix: Almost There...

Today, Merck (Ticker: MRK) announced that it has received HSR approval for its acquisition of Idenix Pharmaceuticals (Ticker: IDIX):

“At 11:59 p.m., Eastern time, on July 18, 2014, the waiting period applicable to the Offer and the Merger under the HSR Act expired. Accordingly, the condition of the Offer relating to the expiration or termination of the HSR Act waiting period has been satisfied.”

It looks like this is on track to close when the tender expires on August 8th. I’ve been adding to my common at ~ $24 and have a full position (also sold out of the money Puts). Now just make sure that a black swan does not show up!

Thursday, July 03, 2014

Portfolio Reflection

I’ve been reflecting on the overall composition of my portfolio and realize that my top four holdings (Constellation Brands (Ticker: STZ), Vertex Pharmaceuticals (Ticker: VRTX), VISA (Ticker: V) and Apple (Ticker: AAPL)) currently make up ~ 59% of my portfolio value. Obviously, I have strong conviction with these positions and plan to hang on to them for a while. As you know, I also utilize special situation plays to add a bit of alpha to my portfolio. The special situation plays have positively impacted the performance of my portfolio. I plan to continue to utilize a growth investment theme in conjunction with special situations plays. I am very comfortable with my current portfolio and do not plan to make any major changes for the time being.

Here’s a summary overview of my current positions. I’m not going to talk about each of them, but I think you get the idea of my investment style. I still enjoy this game very much in trying to beat the market. If I didn’t believe that I can beat the market, I would simply invest in a low fee index fund. I stay far away from actively managed mutual funds since the fees they charge in comparison to their performance are not worth it.

Monday, June 30, 2014

June Results

I can’t believe we’re already starting off the second half of the year. So for the month of June, the portfolio performed well as some of my larger positions such as Constellation Brands (Ticker: STZ) and Apple (Ticker: AAPL) approached new highs. In addition, Vertex Pharmaceuticals (Ticker: VRTX) announced positive phase 3 clinical trial results on VX-809 and Kalydeco for cystic fibrosis, which helped to propel the stock up nicely. The portfolio generated a positive return for June of + 0.57% to + 2.15%. Why this range? I usually just look at the end value of the portfolio at the close on the last trading day of the month and that would be +0.57%, but today there was a weird option pricing for my Safeway short Put resulting in a wide bid / ask spread. This pricing skewed the value of my portfolio down. If I ignore that crazy option price, my portfolio will have increased ~ +2.15% versus the +0.57%. For simplicity, I think I’ll just use the +0.57% for the month of June.

That’s it for now…

Performance Year to Date = +9.50% to (+11.08%) with the running monthly returns as follows:

January -0.67%
February +6.50%
March -2.69%
April -1.51%
May +7.30%
June + 0.57% (+2.15%)