August 2017 Performance
All in all, the portfolio generated a net gain of 4.81% for the month. The positive result for August was primarily attributed to Apple (Ticker: AAPL) and Alibaba (Ticker: BABA), which both gained over 10% for the month. My other positions: Constellation Brands (Ticker: STZ), MasterCard (Ticker: MA), Visa (Ticker: V) and Sanofi (Ticker: SNY) gained between 3 to 4% for the month. The only loser was Qiagen (Ticker: QGEN), which generated a loss of ~ 2% for the month. I also generated some small gains in the following merger arb plays: Scripps Network Interactive (Ticker: SNI) and MRV Communications (Ticker: MRVC).
I did enter two special situation plays recently: Rockwell Collins (Ticker: COL) and
Kite Pharma (Ticker: KITE). Rockwell Collins is currently being targeted by United Technologies (Ticker: UTX)
with a rumored price around $140. I have ~ 9.5% position in this play and
looking to a definitive agreement soon. Kite Pharma agreed to be acquired by
Gilead Sciences (Ticker: GILD) for $180 per share in cash. This deal is structured as a tender
offer with a potential close in the second week of October. I am playing the
Kite Pharma deal via short long dated Puts.
I continue to be on the defensive with a cash cushion. I start to worry
when individual investors start piling into the market as observed in the new
account openings at discount brokerages. And the fact that I am doing this well is a big warning signal!
2017 Performance Year to date = +33.08% with the running monthly
returns as follows:
January -4.50%
February +10.18%
March +5.1%
April +4.34%
May +5.67%
June +1.34%
July + 2.76%
January -4.50%
February +10.18%
March +5.1%
April +4.34%
May +5.67%
June +1.34%
July + 2.76%
August + 4.81%
posted by Money Turtle @ 10:03 PM
9 comments
9 Comments:
MT,
Great result$ for August. Lets keep it rolling. Thanks for KITE strikes. What makes you so optimistic on a potential close for KITE in mid October? SEC filing indicated by year end. Does GILD have some magic? ha ha ha.
Regards,
Inforesource7
The SEC filings simply state an expected closing in Q4. Gilead is expected to launch the tender offer 10 biz days after the announcement (around 9/12). The tender offer will be open for 20 biz days unless it is extended. I don't see any anti-trust or financing issues. This should be completed in the second week of October (around 10/12). They want this deal to close fast so that's why they are going the tender route.
All,
WSJ is reporting UTX to acquire COL for $23B / $140 per share/ $93.33 in cash and $46.67 in UTX stock. WSJ is the lead reporter and has the entire story locked unless you subscribe. I was able to get a glimpse of the pricing details though.
Now we have to hope for a good stock price tomorrow morning. Watch UTX stock price for market reaction and vote of confidence.
Regards,
Inforesource7
All,
Press release provides more deal details. Here is all you need to know. Source was PRNewswire via yahoo/finance. I had to correct UTC to UTX in the text below.
"Under the terms of the agreement, each Rockwell Collins shareowner will receive $93.33 per share in cash and $46.67 in shares of UTC common stock, subject to a 7.5 percent collar centered on UTX's August 22, 2017 closing share price of $115.69. UTX expects to fund the cash portion of the transaction consideration through debt issuances and cash on hand, and the company is committed to taking actions to maintain strong investment grade credit ratings. The transaction is projected to close by the third quarter of 2018, subject to approval by Rockwell Collins' shareowners, as well as other customary closing conditions, including the receipt of required regulatory approvals."
Regards,
Inforesource7
Stock will trade close to 135 tomorrow
Maybe even close to 130 where its trading now..
MT,
With one year closing and less chance of antitrust issues, where do you think it trades tomorrow?
MT,
I believe it all depends on how the UTX price responds. Does the market like the deal or not? UTX did not over pay. $500m in cost savings and deal accretive to UTX after one full year sounds good.
On 8-29-17 COL had an intra day high of $135.31 (candle wick or as I call it an antenna). Maybe we tag that stock price or go a little higher?
Regards,
Inforesource7
I agree, ~ $135 is where I see COL trading. Also COL pays a dividend ~ 1% if anyone decides to hang around until the end.
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