May 2016 Performance
Well, it’s a nice to be finally in the green for the year. A good portion of the positive performance in May can be attributed to the various special situation / merger arb plays. For example, I got lucky with Nanosphere (Ticker: NSPH) in which there was a nice bump in price as another bidder came knocking on the door. In addition to Nanosphere, I am currently in the following special situation / merger arb plays: DreamWorks Animation (Ticker: DWA), Medivation (Ticker: MDVN), Qihoo 360 (Ticker: QIHU), Morgan Hotel Group (Ticker: MHGC), WaferGen Bio-systems (Ticker: WGBS), Krispy Kreme (Ticker: KKD) (short puts) and Cabela's (Ticker: CAB), which I just initiated this afternoon after checking out a write up from the NY Post.
I do not remember a time in which there was so much M&A activity occurring in a single month. In the start of the year, I envisioned that M&A would be subdued for 2016, but I’m glad to be wrong.
Now it’s just watching the grass grow as I wait for these positions to close…
2016 Performance Year to Date = +5.17% with the running monthly returns as follows:
January -5.47%
February -3.50%
March +7.51%
April +0.84%
May +6.34%
posted by Money Turtle @ 4:20 PM
29 comments
29 Comments:
What was the average price you paid for CAB. Thank You.
I bought CAB @ $49.55.
do you think CAB goes for 60+. They trying to sell this company since last nov.
Thank you
CST close to sale also
I can see CAB price going into the 60's.
Was keeping a close eye on CST yesterday, but the price just got away from me...
60s seems rich for CAB from a PE buyer...
That's a nice average so far for the year.
Regarding CAB i was hoping high 50's
here is BBG article regarding at least 60 pps
http://www.bloomberg.com/gadfly/articles/2016-04-19/cabela-s-shouldn-t-demand-too-much-from-a-buyer?cmpid=yhoo.headline
Barrons article today states it will sell under current bid
http://www.barrons.com/articles/cabelas-sale-doesnt-merit-a-premium-price-1465023264
Maybe better to cash out monday if no deal is announced?
CAB: Final bids are due at the end of month. I would be surprised if there were no premium to the current price. You have private equity and a strategic bidder interested in CAB. I would look for high 50s to low 60s.
Hey,
I wanted to contact you, but there's no contact form on the site, nor in blogger profile.
Could you please email me at simon@cafecredit.com?
Feel free to remove this comment.
Thanks,
Simon.
Hi MT,
What is your current opinion on VRTX? Is it a large part of your portfolio? Do you think the current price is a good entry point? Do you view it as a high risk company?
If you were not holding VRTX or STZ, which would you prefer to buy now (if any)?
Thanks
I've been taking some VRTX off during this recent run up and putting it into REGN.
I wold prefer STZ if I didn't have a position in it right now. They're just trying to keep up with the demand for their beer and the wine biz is finally turning around.
IM was ok HSR? passed?
I haven't seen anything about HSR approval. I believe June 6th was the due date. I don't see any HSR issues.
Does next week seem reasonable to see SNY bump their bid for MDVN before the consent solicitation/revocation are effective/mailed?
Possible...Definitely looking for a bump before the vote.
I noticed CAB has come down into the range that you paid for it. Do you still think it is a good investment? What percent of your portfolio have you allocated to it?
CAB was a 5% position. I recently sold and initiated a position in RAD today. At this point, I view RAD as a better risk / reward opportunity.
LNKD do you see any antitrust issues?
I don't see any anti-trust issues with LNKD and Mr. Softee.
see a safe deal LNKD, do you see any other obstacle? spread is very low below 2%, would be nice at least a 3%. Why they think to close end of 2016? shouldn't be faster such deal?
Hi MT,
Do you still like REGN? Have you given it a big allocation? What about REGN do you like? The momentum is down lately. If you still like it, do you think that now is a good entry point?
Thanks
LNKD: This deal will take time to close based on the time to obtain regulatory approvals from US, EU, Canada and Brazil.
REGN: Not a big position. I like their pipeline for the long term. Entry point??? Depends on your objective and time horizon.
Hi MT,
It looks like there are so many different opportunities out on the table now. Would you be able to show us how your portfolio is currently allocated? I think many of us would find that very informative.
Thank You
Hi MT, any idea what caused the RAD price action of the last days (and esp. the spike down today?) I didn't hear any new rumors or anything..
Cheers
I haven't heard anything. I took a small loss ~5% on my RAD position today. The sell off on big volume is concerning. Someone knows something...
Yeah, I am thinking along the same lines.
Haven't pulled the trigger on cutting the loss as the deal fundamentals look compelling to me, with the commitments from WG (+ breakup fee in case FTC blocks) wrt divesting stores, and their combined ~20% market share in # shops. Problem will be those areas where they have a higher combined market share, and not too many buyers to divest those stores to.
Stock price has been volatile from the start, while the company has always stated that it would most likely not close before end of H1 2016.
What is your take on the volume pattern? I do not have a lot of experience on that sort of analyses, but looking at volumes, the sharp spike down was caused by only a couple million shares, while 45M was traded during the day. Could that be some stop-loss triggering? I really have no idea...
I just have a rule of cutting my losses around the 5% mark and re-evaluate later.
Has anyone been watching WGBS lately? Up 25% today on high volume. Any news?
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