Out of BMC Once Again

I sold my position in BMC Software, Inc. (Ticker: BMC) today at $45.62 generating a net gain of 0.42% over a 2 day period. I was just reviewing my risk once again. The potential 5% gain from here (assuming a buyout price of $48) just wasn’t worth it. It’s a relatively small position so the potential gain would not have had a big impact on my performance. I made a little bit on BMC and now I’ll move on…

BMC Software Once Again

I’m back in with a small position in BMC Software, Inc. (Ticker: BMC) @ $45.40. I got shaken out during yesterday’s sell off. I had a chance to further evaluate and realized I made a mistake by selling a bit early. I’m not going in big with this one as I lack a strong conviction unlike Life Technologies where I had a good position. There is definitely a lot of pressure on the board to sell the company.

Sold BMC Software

I sold my position in BMC Software, Inc. (Ticker: BMC) today at $44.65 generating a net gain of 1.79% over a 3 day period. I didn’t like the price action and the “sources” have mentioned that the bids by the private equity firms aren’t much higher than the current price. There is a potential that the company may decide not to sell itself if the PE firms don’t increase their bids. I would lean towards a deal happening, but I don’t like the risk reward here.

Some BMC Software

I took a small position today in BMC Software (Ticker: BMC) today at $43.84. Bids are due today and it looks like two private equity teams (KKR / TPG Capital and Bain / Golden Gate Capital) are bidding for this company. Price being floated around is mid 40’s plus so we’ll see. I don’t expect any surprise bidders like what transpired with Life Technologies (Ticker: LIFE). I have to thank Infosource7 for this one as it fell off my radar screen.

Updates on: HOGS, LIFE and STZ

I’m back in Zhongpin, Inc. (Ticker: HOGS) at $12.85. This company is currently going through the process of a management buyout for $13.50. It’s been a long process, but it looks like the end is near. The SEC is currently reviewing the preliminary proxy statement. I believe the SEC will give the go ahead with the definitive proxy statement in April and a potential closing in late May or early June. I’m looking at a potential net gain of ~ 5.06% (annualized return of 24.95% assuming a June 30^th closing).

I’m pleased with Thermo Fisher Scientifics’ (Ticker: TMO) $76 bid for Life Technologies (Ticker: LIFE). I picked up more Life Technologies on April 3^rd at $65.59 and looking at a net gain of 15.87% (annualized return 18.79%) from that purchase. The downside of this deal is that it is going to take a long time to close. I’m using a closing date of January 31^st, 2014 in my annualized return calculations. I’ll probably hang on until the closing unless I find some more appealing opportunities during this time.

Finally, Anheuser Busch InBev (Ticker: BUD) and the DOJ have reached an agreement making Constellation Brands (Ticker: STZ) the 3^rd largest brewer in the US. This is a big win for Constellation Brands and it’s going to benefit tremendously from this deal. This deal in which Anheuser Busch acquires Modelo SAB and sells assets to Constellation Brands is expected to close in June. I’m going to hold onto Constellation Brands for the long term.

A Little Evertec, Inc.

I put in an indication of interest and received a few IPO shares of Evertec, Inc. (Ticker: EVTC). This company is a leading payment processor in Latin America and the Caribbean. It’s profitable and I like this kind of biz where there is a lot of recurring revenue. I’ll probably hang on for a bit and see how it plays out. It’s up ~ 5% and may add, but I want to evaluate for at least a few months so we’ll see…

Constellation Brands & Anheuser-Busch Almost Done

We’re almost at the finish line with Anheuser-Busch InBev’s (Ticker: BUD) acquisition of Grupo Modelo SAB. As you probably know, Constellation Brands, Inc. (Ticker: STZ) stands to gain a brewery and licensing rights to several Modelo brands such as Corona making it the 3^rd largest brewery in the US. Constellation Brands will gain all this goody in return for the DOJ’s blessing in allowing Anheuser-Bush to acquire Grupo Modelo. Yesterday, Anheuser-Busch and Constellation Brands announced that they have reached an agreement in principle with the DOJ. It looks like they are just dotting the”i’s” and crossing the “t’s”. According to the press release, this should be finalized by April 23^rd. The DOJ is basically guaranteeing the success of Constellation Brands after the completion of the merger. I plan on holding onto Constellation Brands (~ 25% of my portfolio) for a while as I see very nice growth for this company. I’ve also been writing the April 40 and 42.50 puts on Constellation Brands to collect some premium along the way.

Some Life Technologies

I added to my Life Technologies (Ticker: LIFE) position today at $65.59. It’s looking likely that Thermo Fisher Scientific (Ticker: TMO) will make a bid for Life Technologies. Looking at the stock movement in Thermo Fisher, the market will be receptive of this acquisition. These two companies complement very well with one another. I would be surprised if Thermo Fisher passed up on this opportunity.

Life Technologies and Thermo Fisher?

Reuters is reporting that Thermo Fisher Scientific (Ticker: TMO) is in the lead to make a bid for Life Technologies (Ticker: LIFE) with bids due next week. The price mentioned was $65 to $70. I can’t see a deal happening in the 6’s, but in the 7’s… Yes. Life Technologies will be an excellent fit for Thermo Fisher and I actually wouldn’t mind if there was a stock component if Thermo was to make a bid.