Thursday, September 08, 2016

Some Rite Aid

Maybe the third time is a charm… My first two attempts in playing Rite Aid (Ticker: RAD) resulted in losses. Today, I re-entered Rite Aid based on the press release from Walgreens (Ticker: WBA), which indicated that it is making progress on the divestitures to seal the deal with the anti-trust regulators. I liked the tone of the press release in reading between the lines. I currently have a ~ 23% position in Rite Aid with an average price of $8.21 (~ 30% annualized return assuming a close by 12/30).

Thursday, September 01, 2016

August 2016 Performance

August turned out to be a busy month for M&A activity and I was able to take advantage of some of this. The portfolio generated a gain of + 6.57% for the month, which was primarily driven by the performance of WaferGen (Ticker: WGBS), Everbank (Ticker: EVER), Diamond Resorts International (Ticker: DRII) and Medivation (Ticker: MDVN) (Medivation being the biggest driver for the positive August performance). I recently closed out my positions in Sequenom (Ticker: SQNM) & Linkedin (Ticker: LNKD) for some small gains and redeployed the proceeds into more Medivation.

I continue to be very cautious in this market environment and focusing on relatively safe merger arb plays (as if there is such a thing as a safe merger arb play!). Medivation is my only major arb play at the moment. Diamond Resorts tender offer expires today so the cash should hit my account shortly.

So right now, all eyes are on Medivation and looking for this deal to close at the end of the month. I just can’t see how this deal can raise any anti-trust suspicions. Pfizer doesn’t have anything close to a drug that competes with Medivation’s marketed product, Xtandi, for prostate cancer. In any case we’ll see…

2016 Performance Year to Date = +22.48% with the running monthly returns as follows:

January -5.47%
February -3.50%
March +7.51%
April +0.84%
May +6.34%
June -2.6%
July +12.2%
August +6.57%