Tuesday, July 02, 2019

June 2019 Performance

June was a month where calmer heads prevailed with the resolution of the Mexico tariff threat. This obviously affected Constellation Brands, which manufactures most of their beer in Mexico. Also, the earnings report helped to alleviate fears in the slow down of their beer biz. I continue to maintain a ~ 20% + position in Constellation Brands and have no reason to sell anytime soon. This company is benefiting from the mega trend in the beer biz as the old legacy brands from Coors and Bud continue their decline. Everything from what I can see points to continue growth in the Mexican beer biz. Finally, I’ll be interesting to see how their stake in Canopy growth plays out with the introduction of marijuana edibles such as beverages coming this December for the Canadian market.

Surprisingly, all my other long holdings (Apple, Alibaba, Mastercard, Qiagen, Sanofi and Visa) generated positive gains in June. I continue to maintain a very conservative tilt by holding some cash. It’s not bad with cash yielding ~ 2% in this environment. Much better than the near 0% in the previous years.

In terms of risk arb plays, I did play around with Red Hat via Short Puts. I’ve recently closed out my position with a small gain. I went in big and just didn’t feel comfortable with such risk. So, I’m back to no arb / special situation positions.

Maintaining the status quo…

2019 Performance = +24.94% with the running monthly returns as follows:

January +7.4%
February +3.7%
March +5.06%
April +7.15%
May -7.90%
June +8.2%


At July 05, 2019, Anonymous Anonymous said...


Nice job with performance in June and YTD.

Friday M&A on deck.

Blue horse shoe likes SYMC to be taken out by AVGO at $28 or more target mid June. Starboard activist involved since June 2018. Check out the recent stock chart for sentiment measure. Consider minimizing your risk by using options versus common stock, much cheaper, less capital tied up.

Good Luck to all.

At July 05, 2019, Blogger Money Turtle said...

Thanks... SYMC did pop into my radar. I just don't see a big premium from the current price.

At July 06, 2019, Anonymous Anonymous said...


The potential premium is in the trading method selected. Buy on the rumor sell on the potential news announcement event.

By 100 shares of SYMC common stock @ $25.00 for $2,500, sell for $28.00 per share or $300 profit / 12%, annualized return based on time held.

$2,500 at risk if no deal happens. Consider using a married Put option to protect downside, will reduce profit on upside based on cost of Put option.

By 1 call option Oct $20 strike deep in the money @ $5.25 for $525, sell for $825 or approx. $300 profit / 57.14%, annualized time (steroid like) based on time held. Other call option months and strikes can be considered which will impact profit margin.

$525 at risk if no deal happens.

$2,500 in 100 SYMC common shares versus $2,625 in (5 * $525 or 500 optionable shares) call contracts could potentially yield approx. $1,500 profit.

The big premium is in the eye of the trader.

Good luck to all.

At July 06, 2019, Blogger Money Turtle said...

Thanks for the various options on this play...

At July 20, 2019, Anonymous Anonymous said...

Hello MT,

It looks like ABBV had fallen out of favor with wall street prior to its acquisition news of AGN.

What is your assessment of ABBV before the AGN acquisition news?
What is your opinion of the ABBV CEO?
What is your opinion of the ABBV AGN merger?
Do you believe that the deal gets approved and closes eventually?
Do you think the ABBV stock price may go back to $80 (pre deal price) just before the AGN closing?


At July 24, 2019, Blogger Money Turtle said...

ABBV is not the type of company that interest me. The company relies on Humira as it's cash cow (this drug makes up ~ 60% of the total revenue). Generic competition for Humira is just around the corner. The only thing that is appealing is the high dividend yield and you have to wonder how long they can support that payout once generic Humira is introduced in the US in 2023 or earlier.

I have no opinion on the CEO. Other than he is over paid for his role.

I see ABBV AGN merger as desperation between the two companies. Both companies with block busters that will be facing intense competition.

I do see this deal closing. Minimal product overlap between these two companies.

I see ABBV as dead money and don't see it going back to $80.


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