Saturday, December 29, 2012

A Quick Year End Review

This was a good year as my primary portfolio generated a net gain of ~ 57% 61% for the year. In this portfolio, I employed the use of margin when high probability opportunities arose. The bulk of the gains were generated from merger arb plays in (1) Pharmasset, (2) Inhibitex and (3) Medco Health Solutions. I went “All In” in those situations and fortunately, those deals paid off. I'm currently "All In" in Nexen and anxiously waiting for this deal to close (hoping for an early close next year).

The performance in my retirement portfolio was a bit more muted with a return of ~ 22 26%. I was not able to employ the use of margin in my retirement account so I couldn’t take full advantage of the high probability plays.

The majority of my trades were special situations related. Out of the 49 closed positions, I had 3 losers: (1) Illumina, (2) Jaguar Mining and (3) I’ve been much better this year at limiting my losses when compared to the previous year. The previous year, I had two big blowups and learned a great deal from that experience.

I’ll continue to employ my current strategy in maintaining half my portfolio in growth names and the other half in special situation plays in the upcoming year.

Have a Healthy and Prosperous New Year! Off to reading the latest edition of Barron’s...

Edit: For some reason, I thought the market was closed on Monday, 12/31. I'll update my year end results again on Monday.

Update on close of 12/31: Nice year end rally and a few extra % gain for the year.

Wednesday, December 26, 2012

Fushi Copperweld = Done Deal, Really this Time!

Fushi Copperweld, Inc. (Ticker: FSIN) is finally a done deal. The company just filed with the SEC to delist the shares. I anticipate that payment should come quickly. This was probably one of the easiest arb plays I’ve been involved in this year.

Some Fushi Copperweld, Inc.

Call me crazy or what… I picked up some Fushi Copperweld, Inc. (Ticker: FSIN) this morning at $9.39. The company issued a press release stating that they intend to close this deal today and delist the shares tomorrow. The company has pushed off closing this deal for a few days, which has probably spooked some people. A 1.17% spread (buyout price = $9.50) with one day to close is a bit ridiculous, but I’m not surprised. There are lots of inefficiencies with the China plays.

Friday, December 21, 2012

Sold Gardner Denver and More Nexen Again

I sold my position in Gardner Denver, Inc. (Ticker: GDI) this morning at $74.50 generating a net gain of 1.43% over an 8 day period. I didn’t like the price action towards the end of the day yesterday and got shaken out this morning. I added to my Nexen, Inc. (Ticker: NXY) position today at $26.69.

Edit: I wish I can call it skill, but I just got lucky with Gardner Denver. Reuters is reporting that SPX Corp. has ended talks to acquire Gardner Denver sending the stock down ~ 10%. My gut feeling was to get out of this position ASAP this morning. Now it’s actually looking interesting as private equity will likely offer in the mid 70’s for Gardner Denver.

Friday, December 14, 2012

Sold Gardner Denver and More Nexen

I sold my Gardner Denver, Inc. (Ticker: GDI) position today at ~ $73.90 generating a net gain of 1.15% over a 3 day period. I used some of the proceeds to purchase more Nexen, Inc. (Ticker: NXY) at $26.77. This deal will go through; it’s just a question of when it will receive CFIUS approval. I really like the risk reward here with Nexen.

Edit: I bought back a smaller position in Gardner Denver, Inc. at $73.42.

Wednesday, December 12, 2012

Fushi Copperweld = Done Deal

It looks like Fushi Copperweld, Inc. (Ticker: FSIN) will be a done deal this week. Yesterday, the shareholders approved the merger and the company anticipates a closing by the end of this week. I had a relatively small position (~ 11% of my portfolio) in this stock. I’ll be generating a net gain of 2.37% over a 50 day period (~17% annualized return assuming I receive the cash by 12/21). Although this was a China play, I saw this as relatively low risk arb play based on the committed debt financing by the China Development Bank.

I’ve also been adding to my Nexen, Inc. (Ticker: NXY) position as I see a high likelihood that they will receive approval from CFIUS by the end of the year. We’ll see…

Edit: I sold my position in Fushi Copperweld today at $9.46 generating a net gain of 1.94% (~14% annualized). I saw more compelling opportunities and picked up some Gardner Denver, Inc. (Ticker: GDI) at ~ $73 per share.

Friday, December 07, 2012

Nexen, Inc = Almost Done Deal

It’s just about a done deal with CNOOC Limited’s (Ticker: CEO) acquisition of Nexen, Inc. (Ticker: NXY)  I’ve never seen such nervousness from the market leading up to a decision. The market was having a panic attack just hours before the announced ruling. You just need to maintain your conviction and remember why you went into the trade. All the little signs out there were suggesting that the Canadian government was going to approve this merger. Nexen made up ~ 30% of my portfolio so I’m looking at a net gain of ~ 7.75% over a 76 day period (~36% annualized gain assuming a closing by 12/31). I think I’ll rest a bit after going through the Dollar Thrifty and Nexen dramas. The arbs earned this one! Now a BIG sigh of relief…Wow…