Tuesday, October 13, 2009

Almost There for Centennial Communications

I can finally see the light at the end of the tunnel in the Centennial Communications (Ticker: CYCL) / AT&T (Ticker: T) deal. This one was a longgg wait for those, who got in early. AT&T is acquiring Centennial Communications for $8.50 in cash. I initiated a position in Centennial Communications on 9/18/09 and continued to add with the last purchase on 10/5/09. Today, the Justice Department cleared the deal so the only obstacle remaining is clearance by the FCC, which should occur very shortly. AT&T has stated that they expect this deal to close early Q4, which in my mind means end of October. Assuming an end of October close, my return on this risk arb play will be 6.51%, which equates to an annualized return of 56.42%.

Here’s a summary of my purchases:

9/18 2X @ $7.98
9/22 0.3X @ $7.98
9/22 0.7X @ $7.99
9/29 0.2X @ $7.93
10/5 0.1X @ $7.93

Monday, October 12, 2009

Random Stuff

You’re probably wondering what happened to me since my postings have dried up… It’s tough to keep track of the market and focus on your day job. Maybe my day job should be managing a portfolio? :) Anyways, I’ve been looking at some big picture trends. So I’ll just blab a bit about some stuff that comes to my mind...

The first trend that pops in my mind is the increase Federal funding for basic life science research (increase funding to the NIH, NCI, NSF and the FDA). The sector that will benefit most from this trend is the life science reagent suppliers. My favorites in this space are Life Technologies (Ticker: LIFE), Qiagen (Ticker: QGEN), Sigma Aldrich (Ticker: SIAL), Thermo Fisher Scientific (Ticker: TMO), Techne (Ticker: TECH) and Bio-Rad Laboratories (Ticker: BIO). I currently have positions in Life Technologies and Qiagen, which I’ve owned since their IPOs’ wayyy back. I’m looking to initiate positions in the others when the price is right.

The second trend I like is the commodities in particular black gold. Oil is on the up and up… there’s no doubt about that. I’m focusing on the deep offshore oil drillers such as Diamond Offshore Drilling (Ticker: DO) and Transocean (Ticker: RIG). I currently have a position in Diamond Offshore Drilling. This company is all business in maximizing shareholder value with a nice dividend payout. I recently took some profits in Petrobras (Ticker: PBR), but will get back in on a pullback.

I like the biotech sector, where some great innovation is taking place. I’m still heavy in this sector with holdings in Amgen (Ticker: AMGN), Genzyme (Ticker: GENZ), BioMarin Pharmaceutical (Ticker: BMRN) and Biogen Idec (Ticker: BIIB). I’m not looking for a lottery ticket in this group as I only focus on the profitable companies. These companies will generate steady growth and there’s a chance they may get acquired if the big pharmas get hungry.

Finally, I like to balance my portfolio with a bit of risk arbitrage. I view this as the income producing part of my portfolio. Right now I have risk arb positions in Sun Microsystems (Ticker: JAVA) and Centennial Communications (Ticker: CYCL). I’m expecting both to close before year end… hopefully by the end of November at the latest. Waiting for the deals to close can drive you nuts sometimes!

Well, that’s it for now. Just some thoughts...

Sunday, October 04, 2009

The Love of Money

If you're into financial documentaries, check out The Love of Money produced by the BBC (click: here for a preview). It details the demise of Lehman Brothers and how it facilitated the melt down of the financial markets around the world. If you Google: The Love of Money BBC, you'll find some links where you can download the three part series. It's definitely worth watching.