Friday, August 30, 2013

Cooper Tire & Rubber Again

I’m back in Cooper Tire and Rubber (Ticker: CTB) today at $31.59. The definitive proxy was filed today and they are targeting an early Q4 close. There’s still a bit of risk in this merger arb play, but it’s worth a shot here. I have a 3% position in Cooper Tire.

Some Vodafone Group PLC

I picked up a few shares of Vodafone Group PLC (Ticker: VOD) yesterday at $31.68. This position currently makes up ~ 4% of my portfolio. If this deal does materialize, it’ll be interesting to see how Vodafone returns some of the cash to shareholders. All in all, I see this as a positive development for both Vodafone and Verizon (Ticker: VZ). We’ll see very soon…

Sunday, August 25, 2013

Onyx Pharmaceuticals and Amgen Are Almost There

It looks there’s finally closure in the Amgen (Ticker: AMGN) / Onyx Pharmaceuticals (Ticker: ONXX) saga. The New York Times (click: here) broke the news on Saturday that Amgen was close to acquiring Onyx Pharmaceuticals for ~ $125.

I of course like everyone else was looking for something around ~ $130, but I’ll take $125 at this point. My average price is $115.64 so I have a potential 8% gain. I also sold some September $115 puts so I’ll collect some nice premium from those. All in all, I’m pleased with how this turned out, but I didn’t have the conviction to go in big. Still a ~ 10% position will have a positive impact on my portfolio.

So hopefully tomorrow morning, we'll see the official press release.

Friday, August 23, 2013

Sold Cooper Tire & Rubber

I sold my position in Cooper Tire & Rubber Company (Ticker: CTB) this morning generating a net gain of 0.35% over a 3 day period. The more I evaluated this position, the more uncomfortable I got. You have Cooper Tire & Rubber reporting disappointing earnings, but what I fear most is the macro economic issues affecting India. I can see a lot that can go wrong with this merger arb play.

Thursday, August 22, 2013

Back to School with Constellation Brands

I couldn’t help it, but found the following news headline a bit amusing:

Constellation Brands to Present at Barclays Capital Back-To-School Consumer Conference, Sept. 4, 2013 in Boston

You know that Constellation Brands is the largest wine and the third largest beer company in the US with brands ranging from Robert Mondavi to Corona. Yep, alcohol is one of the must have staples for the back to school crowd.

Wednesday, August 21, 2013

A Little Cooper Tire & Rubber Company

I took a small position (making up ~ 3% of my holding) in Cooper Tire & Rubber Company (Ticker: CTB) today at $32.37. This company is being acquired by the Indian company, Apollo Tyres, Ltd. for $35 in cash. There is definitely some risk here with the Indian currency getting hit to the strike at Cooper’s manufacturing facility in China. I’m modeling in a closing by December 31, 2013, which would equate to a net gain of 8.12% (~ 22% annualized return). Also note there is an upcoming dividend payout from Cooper.

Thursday, August 15, 2013

Back in Onyx Pharmaceuticals Once Again

I nibbled back into Onyx Pharmaceuticals, Inc. (Ticker: ONXX) today at $116. Fortunately, I was short the August 120 puts and closed those out on Monday. I now view the risk reward as favorable with a potential deal price of $130. The sell off today was a bit of over reaction on news that Amgen (Ticker: AMGN) is holding off based on review of data from an ongoing trial. I have to say that Amgen is playing their cards perfectly.

Thursday, August 01, 2013

Sprouts and Some Recent Trades

I received a small IPO allocation in Sprouts Farmers Market (Ticker: SFM). I was expecting a nice pop, but nothing like the + 120%. I’ll probably just hang onto the shares and see what happens down the road. We don’t have Sprouts Farmers Market up here in the East Coast, but people have described it as a cross between Whole Foods Market (Ticker: WFM) and Trader Joe’s. I can see this company just duplicating its success state by state as it expands. I do like this concept and clearly the market has very high expectations for this company.

I sold my position in Onyx Pharmaceuticals (Ticker: ONXX) today and essentially breaking even. I wanted to free up a little bit of cash. I’m short the August 120 Puts, which I’ll probably hold into expiration to collect the premium. It's hard to say who will eventually get Onyx, but if I were to choose I would have to say that Amgen (Ticker: AMGN) is the one. Amgen's portfolio is a bit dated with the old drugs still carrying the company. They need something quickly to fill their pipeline and Onyx will provide some nice products that can fill the gap. How much? I'll probably guess $140 - $150 will get the deal done. 

I’ve been adding to my positions in Biogen Idec (Ticker: BIIB), Vertex Pharmaceuticals (Ticker: VRTX) and VISA (Ticker: V) during the recent sell offs. These are some of my longer term holdings and the recent weakness in these stocks was a perfect buying opportunity.

What else… I closed out my merger arb plays in Life Technologies (Ticker: LIFE) and BMC Software (Ticker: BMC). I used the proceeds to initiate a position in Spreadtrum Communications (Ticker: SPRD). Spreadtrum Communications is being acquired for $30.95 ($31 minus the $0.05 ADR fee). Spreadtrum Communications is one of those China takeover plays that carry a high spread due to the China discount. There’s a good chance that this deal closes by the end of September, which will equate to a + 20% annualized gain. At this point in time, I view Spreadtrum Communications as a better merger arb play than Life Technologies and BMC Software.