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%


At September 01, 2016, Anonymous Anonymous said...

Hi MT,

Congratulations on another great month.

Are you considering getting back into to WGBS at some point?
Also, did you see the Sunovion takeover of Cynapsus (CYNA) for $40.5. There is still 2% to be made at the current price. What are your thoughts?
Do you think VRTX is also a potential takeover target?


At September 02, 2016, Blogger Money Turtle said...

WGBS: I would wait until the results of the shareholder vote before considering jumping in again.

CYNA: Haven't done any work on CYNA. Looks like a year end close so looking at ~ 6% annualized return.

VRTX: I'm sure others have looked at VRTX, but if / when something materializes??? I have a position in VRTX, but not playing for a takeover.

At September 07, 2016, Anonymous Anonymous said...

Hi MT,

Have you looked back at ALR? Although they were late, they finally did file their annual financial statements. It seems they are suing Abbott to proceed with the buyout. The market does not seem to be pricing in that the buyout from Abbott will happen, however, it has made a nice move up today.

Do you have an opinion on the situation?


At September 08, 2016, Anonymous Anonymous said...

With a buy-out of RAD imminent, is it a good idea to buy RAD now?

At September 08, 2016, Blogger Money Turtle said...

I have looked at ALR, but it's too radioactive for me to touch. The merger agreement seems solid, but Abbott is trying to find every possible loophole to get out of the deal.

I bought back in aggressively in RAD today after the Walgreen update.

At September 08, 2016, Anonymous Anonymous said...

Hi MT,

When do you think the RAD deal will close?

Also, MHGC took a big hit today. There was an sec filing (SCHEDULE 14A) -
It seems there are 3 bidders on the table: 1) SBE for $2.25 if I understand correctly they are having issues with financing. 2) Bidder V for $2.75, they have not agreed to sign the NDE. 3) Bidder U for $2.4. They are waiting a further proposal from them.
So I guess there are issues with all the bidders.
Have you had a chance to review this, in light of the new information?

At September 08, 2016, Blogger Money Turtle said...

I'm modeling a year end close for RAD (12/30).

MHGC - Too hard for me to play... Potential higher bids lurking, but not willing to commit. Maybe the financing issues with SBE will sway V and U to move quickly?


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