Dear Diary,
Yesterday, I sold WINS at $6.15 a share, an 11% gain over a 47 day holding period (85.43% annualized), from a $5.52 a share purchase price.
I opened Arbitrage #12 with more shares of ROH, bringing my previous purchase price down from $69.64 a share on 10-16-08 to $61.76 on 12-29-08.
I also bought shares on Waters Corp. (WAT) yesterday at $35.70 (10 times expected 2009 earnings) for a long position on a Consumer Monopolistic arrangement. This means that I hope never to sell this position because of its long history of excellent economics (i. e. upward trends in earnings, share holder equity, double digit return on total capital, etc.). The expected earnings per share for 2009 are $3.70 with a widening net profit margin. All calculations do not include a minimal brokerage fee.
Gene
Wednesday, December 31, 2008
Thursday, December 18, 2008
Closed FDRY
Dear Diary,
After a 17 day holding period, beginning on December 1, 2008 and ending today, December 18th, I closed the FDRY Cash on Sale Arbitrage for a 9% actual gain or a 193.24% annualized gain. The average sale price was $16.65, a slight premium to the expected merger price of $16.50. The deal was to close naturally by 12-31-08. My average purchase price was $15.23 a share. All calculations are without minimal brokerage fees being included.
I then took these proceeds and brought down my average purchase price of HUN to $4.68 a share from $8.78 a share, with an average buy price of $3.46 a share.
The retail sector continues to slash prices to move Christmas sales, beating down earnings projections for one retailer after another, so I'm holding off until maybe January or February before getting too much more committed to American Eagle Outfitters (AEO), etc. There are several great retailers available under the Holy Grail criteria, with widening Net Profit Margins, but I'm finding that it is common for a widening Net Profit Margin to turn into a narrowing Net Profit Margin without much fanfare in a bear market recession. Net Quick Assets should be the focus for now, except for something giant like Johnson & Johnson (JNJ), I'm thinking.
Gene
After a 17 day holding period, beginning on December 1, 2008 and ending today, December 18th, I closed the FDRY Cash on Sale Arbitrage for a 9% actual gain or a 193.24% annualized gain. The average sale price was $16.65, a slight premium to the expected merger price of $16.50. The deal was to close naturally by 12-31-08. My average purchase price was $15.23 a share. All calculations are without minimal brokerage fees being included.
I then took these proceeds and brought down my average purchase price of HUN to $4.68 a share from $8.78 a share, with an average buy price of $3.46 a share.
The retail sector continues to slash prices to move Christmas sales, beating down earnings projections for one retailer after another, so I'm holding off until maybe January or February before getting too much more committed to American Eagle Outfitters (AEO), etc. There are several great retailers available under the Holy Grail criteria, with widening Net Profit Margins, but I'm finding that it is common for a widening Net Profit Margin to turn into a narrowing Net Profit Margin without much fanfare in a bear market recession. Net Quick Assets should be the focus for now, except for something giant like Johnson & Johnson (JNJ), I'm thinking.
Gene
Monday, December 15, 2008
HUN Ends Effort to Be Bought
Dear Diary,
Today, Huntsman's (HUN) ended its effort to be bought out by an Apollo subsidiary for $28 a share, and the stock is now trading at about $3 a share, down from the roughly $6 a share of recent days. The Current Ratio is listed at 1.36, below my desirable numbers, but HUN is to receive a $1 Billion amount for termination costs, so I expect HUN will be ok. I plan to hang on to get my $8.78 purchase price back, and it may be that another suitor is in the wings wanting to buy. (Mr. Buffett did warn us to stay away from these 100% deals.)
I just picked up shares of ALO in Arbitrage #10 for $34.76 a share with an expected closing date of December 31, 2008. This is a projected 6% gain over a 16 day holding period, based on a stated sale price of $37 a share. This also represents a 136.88% annualized gain.
It makes one wonder, with all the banks Mr. Buffett is buying (i. e. Wells Fargo) and attempting to transform into banks (i. e. American Express, Goldman Sachs), whether he is attempting to take over the Federal Reserve Banks; thus, the entire system.
Gene
Today, Huntsman's (HUN) ended its effort to be bought out by an Apollo subsidiary for $28 a share, and the stock is now trading at about $3 a share, down from the roughly $6 a share of recent days. The Current Ratio is listed at 1.36, below my desirable numbers, but HUN is to receive a $1 Billion amount for termination costs, so I expect HUN will be ok. I plan to hang on to get my $8.78 purchase price back, and it may be that another suitor is in the wings wanting to buy. (Mr. Buffett did warn us to stay away from these 100% deals.)
I just picked up shares of ALO in Arbitrage #10 for $34.76 a share with an expected closing date of December 31, 2008. This is a projected 6% gain over a 16 day holding period, based on a stated sale price of $37 a share. This also represents a 136.88% annualized gain.
It makes one wonder, with all the banks Mr. Buffett is buying (i. e. Wells Fargo) and attempting to transform into banks (i. e. American Express, Goldman Sachs), whether he is attempting to take over the Federal Reserve Banks; thus, the entire system.
Gene
Monday, December 1, 2008
Arbitrage # 9
Dear Diary,
I just picked up shares of FDRY at $15.23 a share, providing a projected 8% gain over the remaining 30 days of 2008, as the deal is due to close in the "4th quarter." I assume this "4th quarter" is December, 2008. The closing price is stated as $16.50.
Gene
I just picked up shares of FDRY at $15.23 a share, providing a projected 8% gain over the remaining 30 days of 2008, as the deal is due to close in the "4th quarter." I assume this "4th quarter" is December, 2008. The closing price is stated as $16.50.
Gene
Tuesday, November 25, 2008
Closed PHLY Deal
Dear Diary,
I just sold out the PHLY arbitrage for a 5% gain. This represents a 32.59% annualized gain over a 56 day holding period (9-30-08 thru 11-25-08). The expected closing price is $61.50 on December 1, 2008, so I went ahead a sold out at $61.21 a share today (6 days early) to get the cash ready for another deal today or tomorrow.
Gene
I just sold out the PHLY arbitrage for a 5% gain. This represents a 32.59% annualized gain over a 56 day holding period (9-30-08 thru 11-25-08). The expected closing price is $61.50 on December 1, 2008, so I went ahead a sold out at $61.21 a share today (6 days early) to get the cash ready for another deal today or tomorrow.
Gene
Saturday, November 22, 2008
CROX Hammered
Dear Diary,
CROX, my major position over the past many months, just took a $148 million hit on earnings this quarter. Net Quick Assets was listed at $0.41 per share before the earnings announcement, so I'll be buying more if the stock drops from its current $1.04 a share price to get my average purchase price down below the current $8.31 a share to something closer to the Net Quick Asset figure.
Johnson & Johnson (JNJ) is getting into buying range, with a p/e ratio of 12 now and a widening Net Profit Margin. All the "Holy Grail" situations I'm following just refuse to drop to a p/e ratio of 10, so I can buy them. This leaves me several buys into Net Quick Assets, as the vast majority of the stocks I follow have narrowing Net Profit Margins right now.
I read an economist who studies bear markets, and he believes the bottom of this one we're in is about 6,500 on the DOW Jones Industrial Average and should last another 15 months. I don't guess bottoms of markets, but bottoms of stock prices are supposed to be something in proximity to Net Quick Assets. What I own that doesn't go belly up should provide 300% to 1000% gains over the next few years and should make up for any losses.
Gene
CROX, my major position over the past many months, just took a $148 million hit on earnings this quarter. Net Quick Assets was listed at $0.41 per share before the earnings announcement, so I'll be buying more if the stock drops from its current $1.04 a share price to get my average purchase price down below the current $8.31 a share to something closer to the Net Quick Asset figure.
Johnson & Johnson (JNJ) is getting into buying range, with a p/e ratio of 12 now and a widening Net Profit Margin. All the "Holy Grail" situations I'm following just refuse to drop to a p/e ratio of 10, so I can buy them. This leaves me several buys into Net Quick Assets, as the vast majority of the stocks I follow have narrowing Net Profit Margins right now.
I read an economist who studies bear markets, and he believes the bottom of this one we're in is about 6,500 on the DOW Jones Industrial Average and should last another 15 months. I don't guess bottoms of markets, but bottoms of stock prices are supposed to be something in proximity to Net Quick Assets. What I own that doesn't go belly up should provide 300% to 1000% gains over the next few years and should make up for any losses.
Gene
Wednesday, November 19, 2008
BUD Deal Closes
Dear Diary,
The BUD arbitrage just closed at the stated sale price of $70 a share over a 33 day holding period, and represents a 17% actual gain before minimal expenses, or an annualized gain of 188.03%.
A dollar invested in DRS on 9-30-08 is now up 22.43%, a 190.39% annualized gain, based on the reinvestment into BUD back on 10-16-08 of that same dollar. All calculations do not include minimal brokerage fees.
With the proceeds of the BUD deal, I brought down my purchase price on the HUN deal to $8.78 a share, from the original purchase price on 8-26-08 of $13.52. This deal still has a real chance of getting done and is still stated to close at $28 a share.
Gene
The BUD arbitrage just closed at the stated sale price of $70 a share over a 33 day holding period, and represents a 17% actual gain before minimal expenses, or an annualized gain of 188.03%.
A dollar invested in DRS on 9-30-08 is now up 22.43%, a 190.39% annualized gain, based on the reinvestment into BUD back on 10-16-08 of that same dollar. All calculations do not include minimal brokerage fees.
With the proceeds of the BUD deal, I brought down my purchase price on the HUN deal to $8.78 a share, from the original purchase price on 8-26-08 of $13.52. This deal still has a real chance of getting done and is still stated to close at $28 a share.
Gene
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