Monday, October 13, 2014

Sold Shutter Fly and TRW Automotive

I made some adjustments to my special situations / arb plays today. I sold off my position in Shutter Fly (Ticker: SFLY) generating a loss of 15.20% and TRW Automotive (Ticker: TRW) generating a loss of 2.55%. I certainly did not expect the news from Shutter Fly in which the private equity firm Silver Lake pulled its bid for the company at the last minute. It’s not easy to sell for a loss, but sometimes it’s best to step away and re-evaluate the situation. I also sold TRW Automotive because the risk reward at this point was not ideal as there are better opportunities out there. What better opportunities? I started to build a position in Bally Technologies (Ticker: BYI) at an average price of $79.80 (potential annualized return of 19.73% assuming a closing by December 31st) as the company anticipates the completion of this deal by year end at a takeout price of $83.30.

Wednesday, October 01, 2014

September Performance

September turned out to be ok considering the market volatility. My positive performance can be attributed to the gains in the following positions: Intermune (Ticker: ITMN), Veterx Pharmaceuticals (Ticker: VRTX) and Apple (Ticker: AAPL). It’s been a very challenging year unlike last year where just about anything you touched made money.

I still have a few arb / special situation plays: Safeway (Ticker: SWY), Montage Technology (Ticker: MONT), Lorillard (Ticker: LO), TRW Automotive (Ticker: TRW) and Shutter Fly (Ticker: SFLY). We’ll see how those play out…

Other than that, not much going on… I’ll be keeping a close eye on Constellation Brands (Ticker: STZ) earnings report tomorrow. I still believe there are more catalysts (i.e. completing the build out of the manufacturing plant, debt reduction, returning cash to shareholders, etc…) to move this one higher. I still plan to hold this one for a while.

Performance Year to Date = +16.65% 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%
August +4.57%
September +2.02%

Monday, September 29, 2014

Intermune = Done Deal

Roche (Ticker: RHHBY) completed its acquisition of Intermune (Ticker: ITMN) today. I’ll have to wait until the October options expiration to close out the position. I sold the January 2016 $70 Puts at an average price of $0.65. I generally like to write Puts on these tender offer plays as it offer a relatively quick closing with minimal risk. Writing Puts can be risky so that’s why I’ll only enter these positions after an announced merger agreement. It’s all about the odds… just like poker.

Tuesday, September 23, 2014

Intermune - Almost Done

Roche’s (Ticker: RHHBY) acquisition of Intermune (Ticker: ITMN) is pretty much a done deal now. The company received all of the required regulatory approvals as of yesterday as we head toward to expiration of the tender offer on September 26th.  I’ll most likely hang on and let the options expire in October unless I see something more compelling to free up some buying power.

Wednesday, September 03, 2014

Intermune Regulatory Approvals

It looks like Roche’s (Ticker: RHHBY) acquisition of Intermune (Ticker: ITMN) has a good chance of being completed by the end of this month if all the regulatory approvals are received. The company has to obtain approvals from three countries. The required approvals and decisions are as follows: US HSR 09/17, Australia 09/22 and Germany 09/25. This tender expires on 09/26, the day after the receipt of the last regulatory approval. The spread is not wide enough to play via common so I’ve been selling the January 2016 $70 Puts.

Monday, September 01, 2014

August Performance

August certainly didn’t feel like a positive month, but it was actually a decent month. Looking at my portfolio, the majority of the gains was attributed to the closing out of the Idenix short Puts. Apple (Ticker: AAPL) continued to act strongly as it heads into the September product announcement. The remaining positions pretty much held their own and did not have a significant contribution to the overall portfolio performance.

For the special situation / arb plays, I currently have the following positions: Bally Technologies (Ticker: BYI), Intermune (Ticker: ITMN), Safeway (Ticker: SWY), TRW Automotive (Ticker: TRW) and Lorillard (Ticker: LO). I’m aggressively playing Intermune via short Puts.

Performance Year to Date = +14.63% 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%
August +4.57%

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.