Friday, November 02, 2018

October 2018 Performance

October was simply an awful month with my portfolio generating a net loss of 8.78%. Nothing worked for me at all and I have to admit that my confidence was shaken a bit. I had a decent position in CA Technologies with short Puts and I fell for the fraudulent memo leak by closing out my position at a nice loss. I decided it was time regroup by going small and to slowly rebuild my confidence.

So onto my merger arb plays. I closed out my position in SodaStream (short Puts) for a small gain. I initiated small positions in Café Press and Senomyx. These were microcap companies and it was extremely difficult to build a decent position. I only managed to build a small position in both of these companies. Senomyx actually closed today and Café Press should close next week. I like these microcap merger plays as they often fall under the radar and can offer decent annualized returns with a quick closing (both of these were structured as tender offers).
Today, I initiated a small starter position in Pacific Biosciences via Short Puts. Pacific Biosciences is being acquired by Illumina for $8.00 per share in cash. Pacific Biosciences is currently trading at ~ $7.50, which gives you a gross spread of ~ 6% (~12% annualized return based on a closing in 6 months). I don’t see much of a regulatory risk in this deal as Pacific Biosciences is essentially a tiny fish in the sequencing space. The big players are Illumina and Life Technologies (Ion Torrent and Applied Biosystems).
I have not done much with my long positions (Apple, Alibaba, Constellation Brands, MasterCard, Qiagen, Sanofi and Visa). I continue to add to my Constellation Brands position with this recent decline. Their Q2 earnings were impressive as beer, spirits and even wine performed well. I am starting to become more bullish with their stake in Canopy Growth and the enormous market this can represent.

Hoping to just end the year green at this point!


2018 Performance = +10.92% with the running monthly returns as follows:

January +2.80%
February +2.82%
March -0.03%
April +2.10%
May +6.25%
June -1.51%
July +1.53%
August +5.1%
September -0.60%
October -8.78%

15 Comments:

At November 03, 2018, Anonymous Anonymous said...

SODA: Whatever happened to HSR approval? Is that the reason you bailed out or just being conservative

 
At November 03, 2018, Blogger Money Turtle said...

SODA: Just being conservative. I really have no concerns with anti trust approval with this one.

 
At November 05, 2018, Anonymous Anonymous said...

RCII earnings looking ok... might be relatively safe play from here

 
At November 06, 2018, Blogger Money Turtle said...

RCII: Yes, I agree. I may get back in...

 
At November 15, 2018, Anonymous mergerpie said...

AET / CVS - just cleared California with concessions. It's another cigarette butt with 1% spread left if merger close as scheduled by thanksgiving next week.

 
At November 19, 2018, Blogger Money Turtle said...

Thanks for the AET / CVS update.

 
At November 21, 2018, Anonymous mergerpie said...

a little bit of delay as now closing is scheduled after thanksgiving with NJ giving approval yesterday. Now the only approval left is New York. Co-incidentally, NY scheduled CI/ESRX hearing on 7 Dec so i presume NY will start on CI/ESRX after CVS/AET approval. This gives the latest decision date to before 7 Dec (2 weeks) but i m optimistic we will get approval by next week. The spread widens abit to 1.7% with market turmoil which is still a good cig butt.

 
At November 21, 2018, Anonymous mergerpie said...

previous reports have NY pushing CVS/AET for no premium increase due to merger and concessions which CVS/AET had reportedly given to California so i think CVS/AET is in a good position for final approval.

 
At November 29, 2018, Anonymous mergerpie said...

CVS/AET closed. CI/ESRX still about 1.5 months out

 
At November 30, 2018, Blogger Money Turtle said...

Merger Pie, Thanks for the updates once again...

 
At December 03, 2018, Anonymous Anonymous said...

Is TSRO good arb play, lots of competition in parpi

 
At December 03, 2018, Blogger Money Turtle said...

TSRO: I initiated a position today via short Puts. I see this deal closing fast (deal structured as a tender offer) and don't see antitrust issues. Lots of competition is a good thing from an antitrust perspective.

 
At December 03, 2018, Anonymous Anonymous said...

Is TSRO likely to close some time January?

 
At December 03, 2018, Blogger Money Turtle said...

TSRO: Yes, I believe a close in January is a high likely hood. We'll get a better idea of the exact date when they commence the tender offer (within the next 10 biz days).

 
At December 11, 2018, Anonymous mergerpie said...

For those interested in CI/ESRX merger, NY DFS hearing has been rescheduled to 10th Jan 2018.

 

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