Saturday, March 02, 2019

February 2019 Performance

I was able to squeak out a gain in February despite the negative performance in Constellation Brands, which is the second largest position in the portfolio. Investors didn’t like what they heard with Constellation Brands (Ticker: STZ) at the CAGNY conference and sold off the stock. I didn’t hear anything concerning with Constellation Brands during the CAGNY conference other than a slight down tick in beer growth, which is expected. I like the fact they are focusing on returning ~ $4.5 billion to investors through share buy backs and dividends over the next 3 years. Constellation Brands is a money making machine with significant upside if Canopy Growth works out.

In terms of the merger arb game, I’ve been building a position (long common and short puts) in Spark Therapeutics (Ticker: ONCE), which is being acquired by Roche (Ticker: RHHBY) for $114.50 in cash via a tender offer. This deal should close in early April. I see no antitrust issues so this one should be smooth sailing with a closing within ~ 45 days of announcement.

The way the market is rocketing up, I just hope I can keep pace. I’m not going to chase anything, but just continue to focus on high probability arb plays and let my growth stocks do their thing.

2019 Performance = +11.37% with the running monthly returns as follows:

January +7.4%
February +3.7%