November was another difficult month for my portfolio as the Presidential election negatively affected several of my large holdings such as Constellation Brands and Visa resulting in a loss of 1.59% for November. Constellation Brands (Ticker: STZ
) sold off because all of a sudden there will be less people drinking their Mexican beer and a tariff will be implemented for their imports. Umm… I think not, Constellation Brands will do just fine as their products are gaining market share everywhere in the US. I doubt any tariff will be implemented for beer manufactured in foreign countries. If this was the case, all of the major beer producers will be impacted and will lobby hard to ensure this does not happen. Just doesn’t make sense for the beer biz… it’s like forcing Anheuser Busch to manufacture Bud in Mexico and calling it an American beer.
It’s hard to give a rational explanation as to why Visa (Ticker: V
) sold off, but it’s probably a risk on trade for the financials. Financials that take on the risk of lending will do well under this administration. I would say that Visa was a safe haven and investors sold to redeploy into more risky financial assets.
Both Constellation Brands and Visa are long term holds for me. I have no intention of selling any of these two for a long long time…
Now some merger arb plays, I’m still very heavy in Virgin America (Ticker: VA
) and really hope this one gets wrapped up by year end. I initiated a position in Wafergen (Ticker: WGBS
) (~ 9% position) after the shareholders approved the buyout from Takara Bio. The final buyout price of Wafergen will be determined once the annual revenues for 2016 have been finalized. The company should be able to easily do $9 million in revenues, which would equate to ~ $5.00 payout. Any additional revenues will equate to a higher payout to shareholders. The company is guiding $10 to $12 million for the year. I believe $10 million is very doable for this company.
Finally if anyone wants some lunch money, check out the WebMD Health (Ticker: WBMD
). There is a tender offer for $55 with an odd lot priority (less than 100 shares). The tender expires on 12/15/16.
Performance Year to Date = +16.12% with the running monthly returns as follows: