Bought More Big Lots

I continued to add to my Big Lots (Ticker: BIG) position today at $41.26 and $41.29. The valuation in Big Lots is very compelling and there’s a potential for a nice premium in a private equity deal. I like the risk reward profile.

Here are my recent purchases in Big Lots:

2/18 Buy 0.5X @ $41.60
2/22 Buy 1.5X @ $41.29
2/22 Buy 0.5X @ $41.26

Sold Some Genzyme and Back in Big Lots

I sold some of my holdings in Genzyme (Ticker: GENZ) today at $75.36. I sold the 1X and 0.7X lots, which were purchased on 02/14/11 generating a total return of 4.53% over a 5 day period (232.97% annualized). I sold because I wanted to free up some cash so I can get back into Big Lots (Ticker: BIG), which I did today at $41.60. It’s a relatively small position in Big Lots, but I may add over time as cash becomes available. There’s a high probability that Big Lots will be acquired by private equity.

Another reason I sold those particular lots in Genzyme was the fact that the shares were purchased on margin. There was no benefit in holding until the closing as the margin interest would eat up the rest of the potential gains. When you use margin, time is money.

Genzyme = Done Deal

Well, it’s about time… Genzyme (Ticker: GENZ) has finally agreed to be acquired by Sanofi-Aventis (Ticker: SNY) for $74 in cash plus CVR (the maximum value of the CVR will be $14 in the best case scenario). I’m going to hang on to the shares until closing so I get the CVR’s. It’s been a fun and profitable journey. The game's not over and now it’s time to search for the next big trade…

Airgas = No Deal

The judge finally issued his ruling in favor of Airgas' (Ticker: ARG) poison pill. Air Products (Ticker: APD) promptly issued a press release stating that they have withdrawn their tender offer of $70 for Airgas. Airgas stock is trading in after hours at ~ $61. I'm not going to close out my Airgas position because I believe Airgas is very vulnerable now. The next shareholder meeting scheduled for September will be very interesting as additional members of the board will be up for re-election. Now, it's the shareholders turn to have a say. It's not over by any means...

Genzyme = Almost Done

Genzyme (Ticker: GENZ) moved up nicely today with the stock rising 3.53% on reports that the company has agreed to be acquired by Sanofi Aventis (Ticker: SNY) for $74 + CVR. The big question is the potential value of the CVR. We’ll find out in the merger agreement, which could be announced tomorrow morning. This news makes up for the Emergency Medical Services, Corp. (Ticker: EMS) take under in which shareholders were ripped off by the $300 million merger fee.

More Genzyme

I had to regroup today after the EMS (Ticker: EMS) take under, which totally blindsided me. Anyways, you have to move on to your next trade. I’ve decided to really backup the truck in Genzyme (Ticker: GENZ). We’re very close to a decision and I believe the probability is very high that we’ll have a deal by the end of the week. I already have a decent position in Genzyme so I bought more today. I usually don’t like to average down, but I just thought today’s prices were just too compelling to pass up. Here are my trades in Genzyme today:

Bought 1X @ $72.30
Bought 0.4X @ $72.06
Bought 0.8X @ $71.99
Bought 0.7X @ $71.80

The 13F reports are coming out and many of the big hedge funds have loaded up on more Genzyme.

More Big Lots and Genzyme

I added to my position in Big Lots, Inc. (Ticker: BIG) at $41.25 and Genzyme (Ticker: GENZ) at $72.30. I’ve seen numbers now higher than $49 for Big Lots so I’ll let this one play out. We should be hearing soon regarding the potential acquisition of Genzyme by Sanofi (Ticker: SNY). I don’t think they will change much from the initial WSJ reports of $74 plus CVR. It’s been a long saga and I don’t think they will haggle over a dollar or two to risk this deal falling apart. Both companies need each other and it’s time for closure.

Edit:

I closed out my Big Lots position at $41.32 generating a 2% return over a 7 day period (102.86% annualized). I rolled the funds into more Genzyme at $71.99.

Emergency Medical Services Corp. = Done Deal, but...

Emergency Medical Services Corp. (Ticker: EMS) is a done deal at $64, which was below the prevailing stock price of ~ $70 last Friday. Ouch… Clayton, Dubilier & Rice got a good deal on this one as I was expecting ~ $75. I’ll be out of this one today and move on to the next deal.

Edit:

I sold EMS at $62.97 and $62.98 generating a net LOSS of 8.47%. Looking back, would I have done anything differently? My answer is No! I'm ok with this trade. You learn and move on...

Back in SRA International, Inc.

I’m back into SRA International, Inc. (Ticker: SRA) today at $27.77. It looks like this defense company is willing to sell out to private equity according to a Reuters report . This company would be a prime candidate for private equity as is has no debt with decent cash flow. Although the chairman has a controlling stake in the company, it appears he may be willing to sell. Time will tell…

Cash Advances

There are many loan products on the markets and people have to be careful of which one to select from. You have everything from credit card cash advances to refund anticipation loans from your tax returns. I’m sure everyone gets those cash advance checks from the credit card companies in the mail all the time. It’s tempting to use those checks as they frequently offer zero percent interest rates for several months, but if you read the fine print, there’s often an upfront 4-5% charge for the loan amount. You do the math and the interest rate adds up. I would have to say that the majority of the time, you probably do not need these quick loans, but there may come a time in which you are in an emergency situation in which you need some money quickly. I doubt your bank will be willing to give you a loan in such a short period of time and if they do, I’m sure they will impose hefty fees and a long waiting period. In this tight lending environment, banks are definitely out of the picture. So where else can you go to obtain a quick and easy loan? If you really need money quickly, there are other options such as Payday loans. The Payday loans do charge higher interest rates because it’s the nature of the business. It’s a high-risk business, in which the companies will offer you immediate cash with little hassle and no credit check. Many Payday loan companies will approve your loan the same day and you will have the money the next day. There are several online companies offering easy cash advance via Payday loans. These online cash advances don’t have to be expensive if one pays off the loan and fee in a timely manner. They offer a valuable service in a niche market. I personally have not used a Payday loan service, but if there was ever an instance where I was stuck and needed some quick money, it’s an option I would consider. It’s good to know all of your loan options in case of an emergency. Like I said before, Payday loans are not for everyone, but it can be a lifesaver if an emergency arises.

The author received compensation for writing this article.

Initiated a Position in Big Lots, Inc.

I initiated a position in Big Lots, Inc. (Ticker: BIG) at $38.95. The wires are reporting that the company is exploring strategic alternatives (also known as a sale). I see private equity all over this one as the company generates healthy cash flows with little debt. I’ve seen $49 per share being floated around so we’ll see…

Added to Emergency Medical Services

I added more to my Emergency Medical Services (Ticker: EMS) position today at $70.03 and $69.99. We should be hearing the results of the auction soon. The latest news was that there were two private equity firms left bidding for the company. I’m looking for a takeout price in the mid 70’s.

Beckman Coulter = Done Deal

It’s another merger Monday as Danaher (Ticker: DHR) is buying Beckman Coulter (Ticker: BEC) for $83.50 per share in cash. I’ll be generating a total return of 12.13% over a 47 day period. Assuming a holding period of 47 days, the annualized return will be 92.91%, but this is higher since I made a big purchase just last Friday. I’ll probably sell this position sometime this week. I’m keeping a close eye on Emergency Medical Services (Ticker: EMS) and Airgas (Ticker: ARG) as there should be news this week. Genzyme (Ticker: GENZ) is pretty much a done deal as we should hear of a definitive merger agreement from Sanofi (Ticker: SNY) by Wednesday.

Edit:

I sold my Beckman Coulter position at $82.68 on 02/08/11 generating a 11.02% gain.

More Beckman Coulter

I doubled up on my Beckman Coulter (Ticker: BEC) position today at $74.01. We should be hearing very shortly regarding the outcome of the bidding process. The wires have been reporting that two private equity firms have submitted second (final) round bids. No word on any bids from the strategic buyer, Danaher (Ticker: DHR). A deal could be announced very shortly…

Edit:

I also doubled up on Emergency Medical Services Corp. (Ticker: EMS) today at $69.17.

Some BJ's

I took a small position in BJ’s Wholesale Club (Ticker: BJ) today at $48.50. The company has officially put itself up for sale today. I don’t expect a huge premium, but a dollar here and a dollar there adds up. I’ll see how things develop before adding to this position. I can see a potential deal in the mid 50’s.

Edit:

I took a small gain in BJ's at $48.72.