Thursday, November 12, 2015

Sold Cleco and More WuXi Pharmatech

I liquidated my position in Cleco (Ticker: CNL) today at $49.77 generating a net loss of 4.78%, which takes into account of the upcoming dividend payout. I try to limit any losses to ~ 5% and this one just about gets there. In this game, you have to minimize your losses to protect yourself. The price action has been horrible. I was wrong and I learn from my mistakes…

I added to my position in WuXi Pharmatech (Ticker: WX). The shareholder vote is scheduled for November 25th. This deal is anticipated to close 12 working days after the vote, which works out to December 12th according to my calculations. I’m modeling the cash hitting my account by December 18th, which is still a healthy ~ 20% annualized return at today’s prices.

11 Comments:

At November 12, 2015, Blogger lamano said...

Pure protection through a stop loss, or did the price action, based on your experience, tell you something?

I am a bit afraid the pro money managers have access to whats being said at the hearings, and might be betting according to the strength of the arguments and reaction of the judge/committee

 
At November 12, 2015, Anonymous Anonymous said...

U in $ZSPH?

 
At November 12, 2015, Blogger Money Turtle said...

I use mental stops and just keep a close eye on the price action. There's no doubt that there are hedge fund attorneys / analysts attending the hearing to gauge the outcome of the judges decision. I've learned that someone always know more than you do. The price action is telling me that the hearing is not going smoothly for Cleco.

I'm not in ZSPH. Did a quick trade way back when the rumors first popped up. I was hoping to play this via short puts, but there is not a big premium on the option prices.

 
At November 13, 2015, Blogger lamano said...

Thanks for your comments!

Keep up the good work

 
At November 17, 2015, Blogger Money Turtle said...

Anonymous has left a new comment on your post "Sold Cleco and More WuXi Pharmatech":

CNL is continuing its decline.

Did you take a look at FXEN? They also have a preferred - FXENP. They are supposed to vote on Nov. 25.
-----------------------------------------------------------------------------------
CNL is just a wait and see game with the decision from the ALJ. Even if the ALJ recommends to approve the deal, the Commission can still vote against the deal. I’ll just keep on the sidelines for now…
FXEN looks like a good speculation. Tender offer closes on 11/25.

 
At November 21, 2015, Anonymous TB said...

Any thoughts on EMC - the deal has some risks ( dell not going through with financing) but the spread is wide.

 
At November 21, 2015, Blogger Money Turtle said...

I think there's also some concerns regarding how / if the tracking stock will be taxed. I'm not in this one, but will keep an eye on it. I see better risk / reward plays than EMC at this moment.

 
At November 23, 2015, Anonymous Anonymous said...

U in AGN?

 
At November 23, 2015, Blogger Money Turtle said...

Was in AGN earlier for a quick trade, but no position now.

 
At December 02, 2015, Anonymous Anonymous said...

Hi MT,

CNL seems to beheading back up. Have you been reevaluating the situation?

Also, there is a tender offer to buy Perseon Corporation (PRSN)for $1. This is a tiny Healthcare company. They recently pushed off the Tender offer date to December 21. The stock went down to 67 cents. If it goes through this is a very handsome return. The market seems to be pricing this as high risk. Do you have any opinion on this?

Your insights are always appreciated.

Thank You

 
At December 02, 2015, Blogger Money Turtle said...

I haven't had time to revisit CNL...

Regarding PRSN, looks like the tender was extended due to financing (need additional time for due diligence by investors). The risk is that they find something during due diligence and pull funding. It's probably worth a small gamble...

 

Post a Comment

<< Home