Investors & Friends:
Here's a summary of our investment actions from the past week. The theme for the week turned out to be global stalwarts, specifically wide moat companies deriving 50-75% of their sales from outside the U.S.
Option Strategies - Naked Puts
1) Proctor & Gamble Co (NYSE: PG) - We sold Jan '13 $32.50 puts.
2) Coca Cola Co (NYSE: KO) - We sold Jan '13 $35.00 puts.
3) Johnson & Johnson (NYSE: JNJ) - We sold Jan '13 $35.00 puts.
Long Stocks
4) We bought ProShares UltraShort 20+ Year Treasury (NYSE: TBT) on 8/10 @ $24.89, doubling down on our position, reducing our cost to $38.38. The last time the yield on the benchmark 10 year Treasury note was getting down to the 2% range and falling below the dividend yield on the S&P 500 was during the ’08 financial crisis and ’09 stock market bottom.
Click here for the Investrio Stock Selector Fund Bull and Bear Market Indicators Report for the week ending August 12, 2011.
Click here for upcoming IPOs.
Lead Fund Manager
Investrio
Etcetera
Currently the 10 largest M&A deals are averaging about an 11% spread between the announced acquisition price and the current market price. The most interesting one, to us, is the deal between Medco Health Solutions Inc. (MHS) and Express Scripts Inc. (ESRX), a 23% arbitrage opportunity. Here's the deal specs.
- Premium offered: $12.62 or 23.64%
- Acquirer: ESRX
- Target: MHS
- Offer per share: 0.81 share and $28.80 cash per share
- Value of offer per share: $65.99
- Value of outstanding common equity securities: $29,812,971,780
- Acquirer share price: $45.91
- Target share price: $53.37
- Expected closing: 1H 2012 3/31/2012
- Annualized gain: 36.95%
- Note: After the transaction closes, MHS shareholders will own about 41% of ESRX.
Here's a summary of our investment actions from the past week. The theme for the week turned out to be global stalwarts, specifically wide moat companies deriving 50-75% of their sales from outside the U.S.
Option Strategies - Naked Puts
1) Proctor & Gamble Co (NYSE: PG) - We sold Jan '13 $32.50 puts.
2) Coca Cola Co (NYSE: KO) - We sold Jan '13 $35.00 puts.
3) Johnson & Johnson (NYSE: JNJ) - We sold Jan '13 $35.00 puts.
Long Stocks
4) We bought ProShares UltraShort 20+ Year Treasury (NYSE: TBT) on 8/10 @ $24.89, doubling down on our position, reducing our cost to $38.38. The last time the yield on the benchmark 10 year Treasury note was getting down to the 2% range and falling below the dividend yield on the S&P 500 was during the ’08 financial crisis and ’09 stock market bottom.
Click here for the Investrio Stock Selector Fund Bull and Bear Market Indicators Report for the week ending August 12, 2011.
Click here for upcoming IPOs.
Lead Fund Manager
Investrio
Etcetera
Currently the 10 largest M&A deals are averaging about an 11% spread between the announced acquisition price and the current market price. The most interesting one, to us, is the deal between Medco Health Solutions Inc. (MHS) and Express Scripts Inc. (ESRX), a 23% arbitrage opportunity. Here's the deal specs.
- Premium offered: $12.62 or 23.64%
- Acquirer: ESRX
- Target: MHS
- Offer per share: 0.81 share and $28.80 cash per share
- Value of offer per share: $65.99
- Value of outstanding common equity securities: $29,812,971,780
- Acquirer share price: $45.91
- Target share price: $53.37
- Expected closing: 1H 2012 3/31/2012
- Annualized gain: 36.95%
- Note: After the transaction closes, MHS shareholders will own about 41% of ESRX.
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