Sunday, April 04, 2021

March 2021 Performance

March was almost a mirror image of February. Slowly grinding back to break even for the year, but still underperforming the market. There were no transactions with my long term holdings and cash remains at ~ 9.5%.  The small / mid cap space is starting to heat up as you are starting to see some of these names popping up on the Investor’s Business Daily (IBD) 50 list. This is where I like to look for new ideas. It’s kind of healthy to see some new names on the IBD 50 instead of the usual large cap tech companies.

I’ve been fortunate to pick up a decent arb play on a monthly basis. In March, I was able to play Five Prime Therapeutics, which is being acquired by Amgen for $38 in cash. I sold the March $30 and $35 Puts with a decent premium. I’m being a bit more cautious with some of these bolt on vertical acquisitions as there is more scrutiny on these deals by the regulators. For example, Illumina’s acquisition of GRAIL just hit a road block. I don’t think the regulators will let Illumina acquire anyone… They already killed Illumina’s deal for Pacific Biosciences last year. The arb game is never easy!

I’m looking for some of my old favorites: Visa, Mastercard and Constellation Brands to break out. Constellation Brands reports on Thursday so we’ll see what happens.

2021 Performance = -0.53% with the running monthly returns as follows:

January -2.1%

February +0.6%

March +0.99%