Wednesday, April 30, 2014

April Performance

It’s been another somewhat rocky month. I closed out a small position in CBS Outdoors (Ticker: CBSO) and RDA Microelectronics (Ticker: RDA). I closed out CBS Outdoors because it was a small position, which I received from an IPO allocation. The 30 day IPO holding period was up so I decided to sell since I was not going to add to the position. 

RDA Microelectronics has acted weak since I purchased it and today the bottom fell out a bit. I exited the position generating a net loss of 5.72%. Fortunately, it was a relatively small position so no big damage. In my early days, I probably would have gone in big with RDA Microelectronics, but I’ve learned my lesson in minimizing my overall risk.

I still have special situation positions in Jos A. Banks (Ticker: JOSB), Safeway (Ticker: SWY) and Loral (Ticker: LORL). So we’ll see what happens…

Performance Year to Date = +1.63% with the running monthly returns as follows:

January -0.67%
February +6.50%
March -2.69%
April -1.51%

Tuesday, April 22, 2014

Back in RDA Microelectronics

I’ve started nibbling back into RDA Microelectronics (Ticker: RDA) (picked some up today at $17.67), which is being acquired by Tsinghua Unigroup for $18.50 in cash ($18.45 if you factor in the $0.05 ADR fee). This deal was announced in November 2013 and has dragged on quite a bit. I believe we’re approaching a more favorable risk reward time for this merger arb play. PDST originally made a bid for the company, but Tsinghua came in at the last minute and offered a more compelling price. PDST went through the formal channels by obtaining the “road pass”, which allowed PDST to make a bid for RDA Microelectronics. When Tsinghua Unigroup made the counter bid, they did not obtain a “road pass”. The Chinese regulators have held up the approval because of this issue. PDST original road pass was obtained on 11/05/13 and is valid for 6 months. The 6 months is coming up (05/05/14) and at that point Tsinghua Unigroup can formally apply for the “road pass” since only one “road pass” can be granted at a time. The regulatory approval for out bound deals has also been relaxed (no "road pass" required) starting in May 2014 for deals under $1 billion, which applies to this transaction so we should be hearing soon on the status.

Thursday, April 17, 2014

Sold Mercury Systems

I took my profits in Mercury Systems, Inc. (Ticker: MRCY) today at $13.83 generating a net gain of 4.21% over a 4 day period. I entered this as a special situations play with a potential upside target of $15.00 if Boeing (Ticker: BA) makes a bid for the company. If no Boeing, I do not see a bid of $15.00 from any private equity buyers. I decided to play it safe and take some gains in this environment.

Monday, April 14, 2014

Bought Mercury Systems

I picked up some Mercury Systems, Inc. (Ticker: MRCY) today at an average price of $13.27. I’ve been keeping a close eye on this company ever since they put themselves up for sale. Reuters recently reported that Boeing (Ticker: BA) was evaluating this company as a potential acquisition. An acquisition of this company by Boeing would make sense as it will fit nicely in their Defense portfolio.

Saturday, April 12, 2014

Bought Loral Space and Communications

Yesterday, I picked up some Loral Space and Communications (Ticker: LORL) for $73.12. Bloomberg has reported that Ontario Teachers’ Pension Plan is in the lead to acquire Telesat Holdings, which is majority owned by Loral Space and Communications. There have been reports that Loral Space and Communications can go for ~ $80 per share. This deal could be wrapped up soon so we’ll see…

Friday, April 04, 2014

Some IMS Health Holdings

I continue to play the IPO game and was allocated some shares in IMS Health Holdings (Ticker: IMS). I remember acquiring IMS Health stock in 2010 as merger arb play as it was being acquired by a consortium of PE firms. I do like this company and will consider adding to it at the right price. I’m basically on a hold mode right now and waiting to get a glimpse of earnings before making any moves.