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 31^st) as the company anticipates the completion of this deal by year end at a takeout price of $83.30.

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%