Fixing A Mistake: Back in Beckman Coulter, Inc.

I realized I made a mistake yesterday in selling Beckman Coulter, Inc. (Ticker: BEC). So how do I fix it? I sold the shares of Mastercard Incorporated (Ticker: MA) that I bought yesterday @ $218.21 resulting in a break even trade. I added back my Beckman Coulter position @ $74.86, $75.09 and $75.10. I want to continue to build a good position in Beckman Coulter because I have a strong conviction on this one.

More Mastercard Incorporated

I don’t do this often, but I decided to average down on Mastercard Incorporated (Ticker: MA) at $217.89. People are going crazy over the proposed action by the fed to cap interchange fees for debit card transactions. I can see banks simply just say “screw it” with debit cards and focus on the more profitable credit cards. I’ve never used a debit transaction and don’t see any benefits in using it. I use credit transactions all the time and on just about everything. However, I do pay off my balance in full and reap the cash back bonus rewards. Ok, I’m veering off topic… I did sell my position in Beckman Coulter, Inc. (Ticker: BEC) at $74.74 (generating a 1% gain over a 3 day period or 120% annualized) to pay for Mastercard Incorporated.

My risk arb play in Airgas, Inc. (Ticker: ARG) isn’t fairing that well. I don’t see anymore downside, but it will take some months for it get up to the 70s. I’ll have to see what happens in the New Year as the judge makes his decision on the validity of the poison pill.

Also Genoptix, Inc. (Ticker: GXDX) is not acting so well, but this company has tons of cash so that should buffer any downside. I have to dig up some more info on this to see what’s going on.

Sold Applied Signal Technology

I sold my position in Applied Signal Technology (Ticker: APSG) this morning at $37.78 per share generating a net gain of 7.39% over a 2 week period (190% annualized). I like to look at annualized returns when I’m dealing with risk arb plays. I’m back in Beckman Coulter, Inc. (Ticker: BEC) today at $74.00. With news of multiple bidders, I’m starting to think that $90 is a real possibility. I’m going to hold tight on Beckman Coulter now. And a little more risky trade, I picked up some The KEYW Holding Corporation (Ticker: KEYW) at $13.94 per share. This is a small defense contractor with a strong focus on cyber security. I’m looking for this one to get taken out eventually. This is also a decent company on a fundamental basis and has a strong management team.

Edit:

I sold The KEYW Holding Corporation today at $14.26 generating a 1 day gain of 2.22%. I'll likely get back in on any pull backs...

Applied Signal Technology for $38.00

Nice to see first thing on the morning headline news: “Raytheon (Ticker: RTN) buying Applied Signal (Ticker: APSG) for $490 million”. So Raytheon has agreed to purchase Applied Signal Technology for $38 per share in cash. This was the top end of the valuation range so no complaints at all… I was looking for $37 and had a hunch that Raytheon would win the bidding contest. My average cost was $35.12 so I’m looking at a ~ 8% return over a 2 week period. I’ll see where Applied Signal Technology opens before deciding to sell or wait a bit. This was a very low risk trade if you listen to what Applied Signal Technology and Raytheon were saying.

Full Position in Genzyme

I’m done with Genzyme (Ticker: GENZ)… I’m done backing up the truck in Genzyme stock that is! Now, I have a full position and it’s time to sit back and watch the high stakes poker game. Seriously, we’re really close to the finish line with Sanofi-Aventis (Ticker: SNY) looking to acquire Genzyme. Sanofi has a plan in place and will execute it in January. Meanwhile, Genzyme will make a last ditch effort to convince people of the value in Campath for MS next week. The players are slowly revealing their hands…

Some Visa and Mastercard

What the heck… Sometimes, I enjoy some pain in trying to catch a falling knife. I picked up some Visa (Ticker: V) @ $68.75 and Mastercard (Ticker: MA) @ $227.52 yesterday during the sell off. I definitely didn’t pick the bottom, but the value was there and these companies will eventually rebound. I’m planning on hanging on both of these for awhile…

Oh, I sold my position in Emergency Medical Services (Ticker: EMS) @ $64.28 (generating a 0.37% over a 3 day period) to pay for Visa and Mastercard.



Edit: 12/17/10

I just lost a couple of fingers... A Small Oouch!

Initiated Positions in Genoptix and Emergency Medical Services

I took some quick profits in Beckman Coulter (Ticker: BEC) @ $71.05 (generating a one day gain of 0.32% gain). I’m still looking to buy back into Beckman Coulter in the low 70’s. I initiated some new positions in Genoptix, Inc. (Ticker: GXDX) @ $21.00 and Emergency Medical Services Corp. (Ticker: EMS) @ $64. Both of these companies are for sale as they are exploring “strategic alternatives”. For the time being, I shifted the funds from Beckman Coulter to these companies as I see a bit higher returns versus Beckman Coulter.

Lots of decisions right now… We should hear next week the results of the bidding for Applied Signal Technologies. I’m looking at $36 to $37 per share, but it could end up a tad higher if the bidding gets heated. There’s not much of this type of defense companies around anymore so there will be a scarcity premium. The company has stated that it wants $38, but will the bidders pay up? My gut tells me that Raytheon (Ticker: RTN) gets this company for around $37.

Some Airgas and Beckman Coulter

I started sniffing around at some more risk arb plays… I picked up some Airgas (Ticker: ARG) last week @ $65.76. This one is full of drama and I don’t think Air Products & Chemicals (Ticker: APD), Inc will just give up the fight just yet. The big question is whether the Airgas poison pill will hold up in court. From my M&A course, we were taught that poison pills have not been effective in preventing a takeover and is used as a tool to maximize the share price of the target company. We shall see shortly…

I also picked up a few shared of Beckman Coulter (Ticker: BEC) today @ $70.82. I see this eventually be taken out at $80+. It’s still in the early bidding process, but I have the conviction to hang in there with this one.

Finally, I’ve been trading Radware (Ticker: RDWR), which is rumored to be acquired by Riverbed (Ticker: RVBD) or Hewlett-Packard (Ticker: HPQ) for $45+. I basically just broke even on the trades. I don’t have a strong conviction on this one and I’m just going to leave this one alone.

Some Trades: MEE, PRPX and APSG

I took my profits in Massey Energy (Ticker: MEE) @ $51.42 generating a 1.8% gain over a two day period. I sold at the open and should have waited just a bit as the stock gained some momentum through the day. I need to learn not to mess with trades in the first 30 minutes of the opening bell.

I sold my position in Portec Rail Products (Ticker: PRPX) today @ $11.60 generating a 0.43% gain over a two day period. L.B. Foster needs at least 65% Portec Rail Products shares tendered for the deal to go through. The latest figure was ~ 63% tendered so it looks like some have withdrawn their tendered shares. A few months back, over 65% of the shares were tendered. I think there’s a possibility that L.B. Foster Co. (Ticker: FSTR) may extend the tender until the end of the year to get their hands on more shares. In any case, I believe there’s lots of value in Portec Rail Products. I just needed to free up some cash to play Applied Signal Technology (Ticker: APSG).

Sooo on to another trade today… I got in and out of Applied Signal Technology generating a 2.62% gain. Not a bad day… Lots of small gains and that’s basically my strategy these days.

Some Portec Rail Products and Massey Energy

So yesterday, I picked up a few shares of Portec Rail Products (Ticker: PRPX) @ $11.55 and Massey Energy Co. (Ticker: MEE) @ $50.51. Why Portec Rail Products? This company is in the process of being acquired by L.B. Foster Co. (Ticker: FSTR) for $11.80 in cash. The closing is currently being held up because the DOJ is seeking some divestitures before signing off on the deal. The current tender offer expires on December 15th and I believe there’s a high probably that the deal will close by December 15th. Even if for some reason this deal gets derailed, I see Portec Rail Products stock going up because it is very cheap. I see this as a very good risk reward opportunity. The only downside is the thin float, which makes it very difficult to accumulate a good position. I was only able to buy half of what I wanted because of the thin volume. I may try to buy more next week if the price is right.

Now onto to Massey Energy… The company has announced that it is exploring strategic alternatives (also known as a sale). This morning it was announced that the CEO, Don L. Blankenship, will be retiring at the end of this month. This tells me that the company has a very high probability of being sold. The CEO was pretty much against a sale, but now he’s out of the way. Alpha Natural Resources (Ticker: ANR), ArcelorMittal, Arch Coal (Ticker: ACI) and a state run coal mine company in India have been rumored to be interested in Massey Energy. We should see a nice little pop on Monday…