Friday, December 11, 2009

Recent Arb Trades

On 12/8, I closed out a small risk arb play on Sunair Services (Ticker: SNR) @ $2.71 generating a net gain of 0.74% over a 2 week period (19.33% annualized). I sold Sunair Services because I found a more rewarding arb play in SkyTerra Communications (Ticker: SKYT.OB), which is going private for $5.00 in cash. I picked up a few shares at $4.88 on 12/10. Management states that they expect the deal to close in late 2009 or early 2010.

I also got back into IMS Health (Ticker: RX) today at $19.88. The stock sold off today based on a potential health care bill proposal that can restrict some of their right to access script data. After doing some quick digging, the consensus is that the bill has a very low probability of passing. Even if it passes, the effect on earnings will be minimal. My bet is that this deal goes through at $22.00 by March. This is a good risk / reward arb play.


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