Welcome to the Becalmed issue of M&A Daily
The S&P 500 (NYSEARCA:SPY) is currently in its 40th trading day without a 1% intraday move. This is the longest streak of tranquility in its history. One of the opportunities that I have most frequently highlighted is the short case for the various volatility-linked securities (for two examples, see How Much Would You Pay To Avoid Volatility? and The Biffy Butler Bidet Sprayer/Digital Accessory Caddy Of Investments). However, as the current calm streak hits biblical proportions of forty days and forty nights, it might be worth covering such positions. I still believe that these are lousy securities, but no longer think that their current prices make them auspicious short candidates.
Western Refining (NYSE:WNR) received an FTC second request for its acquisition by Tesoro (TSO).
The Austrian review expires today for the Canyon Bridge acquisition of Lattice (NASDAQ:LSCC). The $1.44 arb spread offers a 96% IRR if the deal closes by May. More to come in future editions of M&A Daily…
Elsewhere on Seeking Alpha
- Trump Deals With China; Who Wins?
- Arbitrageur's Delight
- Google Seeks Partner For China Return
- Twilio Acquires Beepsend
- Accenture Buys VeriSign's Threat Intelligence Unit
- Merger Arbitrage Funds' Top Holdings
- Pharma M&A In 2017
Beyond Seeking Alpha
Not what they once were
My only advice is that I advise that you think for yourself. However, in response to requests for ideas of positions to close (among those that are not self-liquidating), here are three:
- Up 50%, my earlier #1 Stock idea (NASDAQ:XIV) has largely played out.
- NexPoint (NYSE:NXRT) had a 75% total return, most of its upside.
- EVI seemed like a good idea at the time, but it's less so today.
Sifting the World
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Disclosure: I am/we are long TWX.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: Chris DeMuth Jr and Andrew Walker are portfolio managers at Rangeley Capital. We invest with a margin of safety by buying securities at discounts to their intrinsic value and unlocking that value through corporate events. To maximize returns for our investors, we reserve the right to make investment decisions regarding any security without notification except where notification is required by law. This post may contain affiliate links, consistent with the disclosure in such links. We manage diversified portfolios with a multi-year time horizon. Positions disclosed in articles may vary in sizing, hedges, and place within the capital structure. Disclosed ideas are related to a specific price, value, and time. If any of these attributes change, then the position might change (and probably will).
Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.