July 2015 Performance

July turned out unexpectedly well with a net gain of 5.48% for the month. I would label this month as a transition as I closed out my merger arb positions in Altera (Ticker: ALTR), Hospira (Ticker: HSP) (short Puts) and Omnicare (Ticker: OCR). I used the funds to build up a large position in Receptos (Ticker: RCPT) by going long the stock and short Puts. I really like the risk reward in Receptos, which is anticipated to close by the end of August. Receptos is the type of deal that I am willing to go in big.

So what drove the gains for July? Visa (Ticker: V) and MasterCard (Ticker: MA) reported good earnings and drove the stocks nicely higher. Qiagen (Ticker: QGEN) participated in the biotech rally by breaking out to multi year highs.

And what didn’t work? Apple (Ticker: AAPL) delivered respectable earnings, but the market didn’t like it and sold it off.

So hopefully next month, I get to report that Celgene (Ticker: CELG) successfully completed its tender offer for Receptos. So that's it for now...

2015 Performance Year to Date = +21.85% with the running monthly returns as follows:

January +3.4%
February +7.03%

March -0.33%

April +0.39%

May +5.59%

June -1.2%

July +5.48%

Closed Out Hospira / Portfolio Update

I closed out my short Put positions in Hospira (Ticker: HSP) this week. I generated a decent gain and decided it was a good time to reduce my risk a bit. This was an unhedged (naked) position so if there are any hiccups with the US or EU antitrust regulators, I would be in a little bind. On the other hand, I continued to build a short Put position in Receptos (Ticker: RCPT) and I believe this deal will close rather quickly without any antitrust issues.

I haven’t done this for a while, but here is an overall snap shot of my current non retirement portfolio holdings and the percentage weighting:

June 2015 Performance

June was certainly a challenging month with the macro events affecting the markets. It was a quiet time for me as I just basically held onto many of the pre-deal plays that were entered in the previous months. I’m still in the following merger arb positions: Altera (Ticker: ALTR), Omnicare (Ticker: OCR), Pall (Ticker: PLL) and Hospira (Ticker: HSP) via short Puts. I anticipate the Hospira deal to close next month.

I initiated a small position (~3%) position in Capitol Acquisition Corp II (Ticker: CLAC). This is basically a blank check company that is in the process of acquiring Lindblad Expeditions. Lindblad Expeditions is a small cruise line that has partnered with National Geographic’s in providing a high end / adventure cruise experience. I’ve always been intrigued with the cruise business and really like the attractive valuation of this deal. This acquisition should close next week pending shareholder approval.   

I’m playing a bit of defensive right now and just waiting patiently for good opportunities to show up.

2015 Performance Year to Date = +15.52% with the running monthly returns as follows:

January +3.4%
February +7.03%

March -0.33%

April +0.39%

May +5.59%

June -1.2%