June 2018 Performance
I was able to easily generate a net loss of 1.51% for the June. The bulk of the loss can be attributed to my trading debacle in NXP Semiconductors (Ticker: NXPI) and the earnings short fall in Constellation Brands (Ticker: STZ). I initially bought NXP Semiconductors with the expectation of a fairly quick approval by the China, but the news reports of an imminent approval did not pan out. I exited the NXP Semiconductors with a nice loss. Constellation Brands just reported earnings with the bottom line missing estimates. I am not too concerned with Constellation Brands as the top line generated healthy growth. Increased marketing and transportation cost negatively impacted the bottom line for Constellation Brands. Overall, I was really disappointed on how I handled the NXP Semiconductors trade as I had no edge at all.
So what’s new? I picked up a few of
the long dated short Puts on Rent-A-Center (Ticker: RCII), which is being acquired by Vintage
Capital for $15 per share in cash. Vintage Capital has been in pursuit of
Rent-A-Center for over a year. The acquisition of Rent-A-Cent would complement
their other rent to own company, Buddy’s Home Furnishings. It is a private
equity deal and they do have a tendency to bolt when things start going south.
I don’t see it in Rent-A-Center as they’re in the early innings of a turn
around with their free cash flow showing a nice increase. This is almost like a
strategic deal by Vintage Capital. Vintage Capital expects this deal to close
by the end of the year.
And that's it for June...
2018 Performance = +12.90% with the
running monthly returns as follows:
January +2.80%
January +2.80%
February +2.82%
March -0.03%
April +2.10%
May +6.25%
June -1.51%
posted by Money Turtle @ 5:27 PM
25 comments
25 Comments:
Hi MT,
Regarding Rent A Center (Symbol RCII)
Why is it worth it to make less than 2% (current price is $14.72) in what could be 6 months? Is there more to it than what I see?
Thanks
I didn't buy the common. I sold the Jan 2020 $12 Puts.
how much margin would it take for selling a contract?
The maintenance requirement for RCII is $147.50 per contract.
sounds like a good deal!
i sold a few NXPI Jan 2020 $90 puts for about $6.20 average... if the merger goes forward, the options will accelerate and close, netting me all the premium... if merger does not go forward, I will buy NXPI at $90 per share if the options got exercised.
Merger Pie, Not bad for those Puts on NXPI. You'll actually be buying NXPI for $83.80 ($90-6.20) if those Puts get exercised.
What are odds China will actually approve the deal considering all the trade tension talk?
Anonymous, wish I knew the answer to that question...
thanks MT... i hope they will be approved soon..
China only understands two things, Strength and Pain.
President Trump is demonstrating Strength and resolve with trade inequities.
How much Pain will Xi Jinping be willing to put his people through before he buckles?
Pending: If U.S. is able to reach an agreement with EU on zero tariffs for automobiles, the tide change favors U.S. to resolve other trade issues as EU understands China is the real outlier with various trade issues.
Does QCOM and NXPI have enough insider visibility to consider extending the deal closing date beyond 7-25-18 or throw in the towel and move on?
This is the big $44 billion question.
ZTE seems to finally have the green light... we'll see if that translates to movement on NXPI soon enough...
free money at JASO closing on 18 Jul at $7.55 (minus 0.05 ADR fee) so expect to earn about $0.06
Hi mergerpie,
Can you point us to the news report with the detail on JASO? I have not been able to see the details of the deal. Where do you see July 18 as the closing date? Are there any reasons this deal can fail?
Thanks
Merger Pie, I was able to pick up a few shares of JASO. Thanks!
https://www.adrbnymellon.com/directory/corporate-actions
Select: JA Solar Holdings and you will see the corporate action PDF document.
JA Solar Holdings Co., Ltd ("JA Solar" or the "Company") - Mandatory Exchange for Cash/Termination
there is always some premium left even when everything is confirmed for china deals...
If you have not figured it out yet, NXPI has a less than 50% probability of getting approved by China or approved before the 7-25-18 merger deadline.
This Friday will be the last day of the tender Offer extnsion. QCOM would have to move heaven and earth to obtain a 70% tender offer minimum threshold by Friday if the deal were to get approved this week.
QCOM and NXPI would have to agree to extend the merger once again. There is to many financial issues behind the scenes to work out due to China uncertainty to consider extending the tender offer.
Also usually with any tender offer there is a short period squeeze out process. Again not enough time to do this if China were to approve this week.
As much as I want to see the deal approved, all are best to plan accordingly with stock / options plans before any official news is released.
We have slow pain and rapid pain. NXPI is currently in a slow pain state. Please do not wait for the rapid pain or you may regret it.
Good Luck to all traders.
(Reuters) - Private equity firm Apollo Global Management LLC will buy LifePoint Health Inc in a deal valued at $5.6 billion, including debt, the hospital operator said on Monday.
Reuters reported on Friday that Apollo was in advanced talks to buy LifePoint.
The deal will bring together LifePoint and Apollo's RCCH HealthCare Partners, two hospital companies that operate mainly in the rural United States. The transaction price includes $2.9 billion of LifePoint net debt and minority interest.
LifePoint shareholders will receive $65 per share in cash, a premium of 35.7 percent to the stock's Friday closing price. LifePoint shares jumped 33 percent to $63.75 in Monday premarket trading following the news.
Implied vol on NXPI is like 140... remarkable... going to be interesting to see how far it falls... in low 80s, seems like worth buying.
NXPI: It takes a lot of conviction to hold this through the final decision. It couldn't handle it...
Well its official now as Xi Jinping has personally decided not to approve the sale of NXPI to QCOM. Keep in mind although QCOM is an American company, NXP was a European / Netherlands company. The Global trade war has officially been elevated.
Xi's arrogance and stubbornness coupled with his so called life long appointment to office is the ultimate Chinese gamble. Mark this date and comment down for the history books. This decision will lead to Xi's rapid popularity, decline and eventual ouster as China's lifetime leader. The world has taken notice but more important the Chinese people have taken notice. The Communist party is so blind to what is taking place in China that it will get crushed by its own people. There are so many problems bubbling up inside China, which will cause it to implode. Xi has unknowingly placed a bullseye target on his back and he is now enemy number one in China and the world. Xi has just proven he cannot be negotiated with. There is no turning back now. Xi must go. Xi must exit as China's leader.
The only way to have played NXPI is with a combination of common stock and options or options only. Note to traders, be fore warned. Any arb deals or regular investments linking US with China should be avoided like the plague no matter how good the spread is. NXPI is the canary in the coal mine. Take notice.
I agree. Staying away from anything that requires China antitrust approval.
Please note:
FOX / DIS deal requires MOFCOM approval.
I also heard something recently that may irk China's leadership. Mickey Mouse. Will China ask for DIS to stop promoting / using Mickey Mouse in China?
Best to stay clear of this deal.
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