Saturday, January 02, 2016

2015 Performance

As 2015 came to a close, I reflected on what I would have done differently and the answer was really nothing. I learned to be more patient and let the event driven positions play out. In the previous years, there were many instances where I closed out the position before letting the event come to its conclusion. I was also more disciplined in pursuing more late stage merger plays instead of speculating with the early ones.

I was able to squeak out a gain of 0.64% for December and this was primarily attributed to the closing of several arb plays (Integrated Silicon Solution, WuXi Pharmatech and Altera). For the year, I managed to generate a gain of 33.48%, which was primarily attributed to the special situation plays and my holding in Constellation Brands (Ticker: STZ), which currently makes up ~ 20% of my portfolio. Constellation Brands was a strong performer by generating a gain of ~45% for the year. The following also contributed positively to the portfolio: Qiagen (Ticker: QGEN) ~ +17%, Visa (Ticker: V) ~ +18%, MasterCard (Ticker: MA) ~ +13% and Vertex Pharmaceuticals (Ticker: VRTX) ~ +6%.

Not all was well as a couple of the long positions declined for the year. Apple (Ticker: AAPL) declined ~ 4% (my third largest position) and Sanofi (Ticker: SNY) declined ~ 7%. I have no intentions of liquidating Apple or Sanofi as they present good value at the current prices.

I also initiated some new positions such as Lindblad Expeditions (Ticker: LIND) and Regeneron (Ticker: REGN), which have performed reasonably well so far.

So in summary, 2015 was a great year if you were into special situations / merger arb. I do think that we’ve probably seen the peak for M&A, but there will always be opportunities to take advantage of. In terms of strategy, I’ll continue to do what I’ve been doing for the last couple of years. I’m hoping that I can surprise myself with another strong year like 2015, but we’ll see. I just take it one day at a time…

So that’s a wrap for 2015 and onto 2016!

2015 Performance Year to Date = +33.48% with the running monthly returns as follows:

January +3.4%
February +7.03%
March -0.33%
April +0.39%
May +5.59%
June -1.2%
July +5.48%
August -0.89%
September -4.89%
October +12.90%
November +2.28%
December +0.64%

Annual performance for the past four years is as follows:

2012 +61%
2013 +44.61%
2014 +29.47%
2015 +33.48%


At January 06, 2016, Anonymous Anonymous said...

Hi MT,

Congratulations on another great year.

Could you let us know what your percentages are for your holdings, I am assuming that the higher your allocation the stronger your conviction.

Sanofi (SNY) is near its low for the year. Do you think this is a good entry point, or is it "trying to catch a falling knife"?

Your insights are always appreciated.


At January 07, 2016, Blogger Money Turtle said...

Sanofi has some problems with their diabetes franchise, but once they get that resolved the company should do well. Their crown jewel is Genzyme, which they got for cheap. You have to be patient with this one...


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