Dear Diary,
General Electric (GE) announced today that it will cut its dividend from $0.31 a share to $0.10 a share later this year. I like the move, as this will help the balance sheet in time.
Jones Soda (JSDA) is up 167% from last month's low of about $0.30 a share to $0.80 a share today on news of a new tea to be distributed. Net Quick Assets is listed at $0.60 a share, lending credibility to the Buffett-Graham Net Quick Asset Deal. My average buy price is $0.81 a share.
Gene
Friday, February 27, 2009
Time For An Update
Dear Diary,
I've been busy the past month, so I'm taking time to play catchup.
First, I bought more Medtronic (MDT) on 1-28-09, bringing my average purchase price down from $49.85 a share to $36.86.
Second, I bought more Heely's (HLYS) at $1.99 a share, bringing the average purchase price down to $2.16 a share from $3.28.
Lastly, I saw the ALO Cash on Sale Arbitrage finally pay me on 1-30-09 for a profit. I find that this Arbitrage approach has significant downside and little upside potential, so I'll probably not do too many of these in the future, unless I see significant upside on a deal.
I continue to have faith in my Buffett-Graham Net Quick Asset Deals, and Holy Grail remains outstanding.
Gene
I've been busy the past month, so I'm taking time to play catchup.
First, I bought more Medtronic (MDT) on 1-28-09, bringing my average purchase price down from $49.85 a share to $36.86.
Second, I bought more Heely's (HLYS) at $1.99 a share, bringing the average purchase price down to $2.16 a share from $3.28.
Lastly, I saw the ALO Cash on Sale Arbitrage finally pay me on 1-30-09 for a profit. I find that this Arbitrage approach has significant downside and little upside potential, so I'll probably not do too many of these in the future, unless I see significant upside on a deal.
I continue to have faith in my Buffett-Graham Net Quick Asset Deals, and Holy Grail remains outstanding.
Gene
Tuesday, February 24, 2009
Market at Lowest Point in Dozen Years
Dear Diary,
The talking heads are saying that "the Market is at its lowest point in a dozen years." I'm trying to get more cash into General Electric (GE) at $8 a share, a serious discount to Net Quick Assets of $22.00 and change, according to "Value Line." If this isn't Armageddon, I'll be a rich man on the other side of this crash.
Gene
The talking heads are saying that "the Market is at its lowest point in a dozen years." I'm trying to get more cash into General Electric (GE) at $8 a share, a serious discount to Net Quick Assets of $22.00 and change, according to "Value Line." If this isn't Armageddon, I'll be a rich man on the other side of this crash.
Gene
Monday, January 12, 2009
ALO: Voluntary Tender
Dear Diary,
A "Voluntary Tender" offer was made for the outstanding shares of ALO by the buyer, but I would have had to make the arrangement with my broker to do the deal and pay the transfer agent a $25 fee, my broker informs me. ALO stopped trading on December 31, 2008, but my broker tells me an "Involuntary Tender" will be coming soon to close the arbitrage out in my account without cost to me.
I've made money on Cash on Sale Arbitrage since I started in August, 2008, but it is volatile at times and the HUN deal is still trading at a $1 loss were I to sell it today.
So, I bought Patterson Companies (PDCO), a dental supply company, etc. with Consumer Monopolistic qualities at $19.24 a share on 1-7-09, near a p/e ratio of 10 on $1.90 projected 2009 earnings per share and a widening Net Profit Margin.
I also picked up shares of IEX today at $23.49 a share, also with Consumer Monopolistic qualities, based on 2009 projected earnings per share of $2.45 and a widening Net Profit Margin.
Gene
A "Voluntary Tender" offer was made for the outstanding shares of ALO by the buyer, but I would have had to make the arrangement with my broker to do the deal and pay the transfer agent a $25 fee, my broker informs me. ALO stopped trading on December 31, 2008, but my broker tells me an "Involuntary Tender" will be coming soon to close the arbitrage out in my account without cost to me.
I've made money on Cash on Sale Arbitrage since I started in August, 2008, but it is volatile at times and the HUN deal is still trading at a $1 loss were I to sell it today.
So, I bought Patterson Companies (PDCO), a dental supply company, etc. with Consumer Monopolistic qualities at $19.24 a share on 1-7-09, near a p/e ratio of 10 on $1.90 projected 2009 earnings per share and a widening Net Profit Margin.
I also picked up shares of IEX today at $23.49 a share, also with Consumer Monopolistic qualities, based on 2009 projected earnings per share of $2.45 and a widening Net Profit Margin.
Gene
Monday, January 5, 2009
ROH Deal Closed
Dear Diary,
I just closed the ROH arbitrage for $63.28 a share, a 2% gain over an 80 day holding period. The average buy price was $61.76 a share on two purchases (10-16-08 and 12-29-08). This represents a 9.13% annualized gain on the deal. I sold out because of the volatility of the deal: Kuwait dropped a $15 billion contract with DOW, the buyer of ROH, with the assumption that the Kuwait money is to be used to buy ROH.
All arbitrage situations are closing fine except for the HUN deal, but I'm only about $1.00 a share out of the black on that deal. Overall, arbitrage is a fine business, and I expect to be doing it a long time.
I had some trouble logging into my blog today, so I hope there is no problem with the system.
Gene
I just closed the ROH arbitrage for $63.28 a share, a 2% gain over an 80 day holding period. The average buy price was $61.76 a share on two purchases (10-16-08 and 12-29-08). This represents a 9.13% annualized gain on the deal. I sold out because of the volatility of the deal: Kuwait dropped a $15 billion contract with DOW, the buyer of ROH, with the assumption that the Kuwait money is to be used to buy ROH.
All arbitrage situations are closing fine except for the HUN deal, but I'm only about $1.00 a share out of the black on that deal. Overall, arbitrage is a fine business, and I expect to be doing it a long time.
I had some trouble logging into my blog today, so I hope there is no problem with the system.
Gene
Wednesday, December 31, 2008
Ending 2008
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
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
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
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