Wednesday, 2 December 2015

Re-entered Dream Global

Today a position in Dream global Reit at CAD 8.30 was established. The original position was sold on 4/9/2015. See portfolio tab of the blog.

The Canadian dollar has fallen since the position was sold, but DRG's portfolio consists of Euro denominated office real estate in Germany. In connection with the now lower share price, I believe this is an attractive entry point.

source: Yahoo Finance

Thursday, 12 November 2015

Merger Arb Cleco:CNL


I have not written much in past few month because there are fewer and fewer investments I like to invest in.

At the current price I have established a position in Cleco for the blog. There are some concerns the buy out will not go through.

For more information see the following link. This was written by one of my favourite writer at seekingalpha:

name targetsymbolpricediscount upsidebid total


Weight watchers

I have also sold the full weight watchers position at $24.81. The Oprah effect was a little bit too fast and heavy for me. Maybe there will be a better point to rentry. Additionally the dollar is relatively high for me and I will change this back into euro for a nice additional gain.

Stockpriceprice EntryDate EntryActiveReturnv S&P500 [€]Annualized Return

Weight Watchers$24.81$19.001/9/201511/12/201530.58%20.10%37.33%

Thursday, 7 May 2015

Sold Glentel

After the sale to BCE was cleared the spread has shrunk to <0.4% for both considerations offered and due to tax considerations it is not profitable for me to hold on.

price glentel26.41100% cash

Glentel$26.44CA$ 24.961/15/20155/6/20155.93%-1.10%20.85%

With 6% gross and 21% annualized the investment in CAD lagged the S&P500 in EUR by 1% but with the Canadian dollar advancing 4.4% the investment was even better than the S&P500 in EUR. I have used the S&P500 in EUR as benchmark because EUR is my base currency and the S&P500 was the most promising index in EUR to invest in. With these uncorrelated investments like Glentel and UMS there is to my knowledge no transparent benchmark to compare with.

The portfolio now holds the highest amount of cash since years. The near zero cash balance and the near 100% allocation to equities were the main reason for my outperformance in the last two years, but there are fewer and fewer investments which I like. I would like to invest more in event-driven special uncorrelated situations as long as the market remains high, but the position sizes have to be kept small as long as there is considerable downside.

Tuesday, 28 April 2015

Sold UMS

After the shares went ex the dividend of €7.53 and the price did drop less, I sold the shares.

UMS€ 10.88€ 9.529/5/20144/28/201514.29%-9.76%23.05%

The return was 14.29% and 23.05% annualized respectively. The underperformance compared to the S&P500 in € of 9.76% is explained by the fall of the Euro. Furthermore this is a uncorrelated special situation (here: liquidation), for which the S&P500 is not the best bench anyways. This was by far my biggest position in the last months and in connection with some trading around and the tender offer the actual pre-tax IRR was a bit higher than shown.

The current implied IRR does not meet my total return hurdle regardless of current market situation:

pre-tax IRR5.65%

If the IRR goes above 10% again, I will reevaluate the situation.

Tuesday, 10 March 2015

Updates Gyro, KWG, Glentel, WTW,


Gyrodyne filed a S-1 form with the SEC and I exited the position. This may look like a loss, but in Euro Gyro actually earned me some money as the Euro has lost in value.

Although the prospectus is preliminary and we don't know the actual numbers yet, I expect them to offer the new shares with a discount to current trading prices. The issue of new shares seems to be neccessary in order to get enough votes for the merger:
"On June 5, 2014, Gyrodyne announced that a special meeting of Gyrodyne shareholders would be held on August 14, 2014 to authorize the Merger. Gyrodyne postponed the special meeting, first to August 27, 2014 and then to December 5, 2014, to allow additional time for shareholders to vote on the Merger. Although the shares that were voted in these previous attempts to conduct the special meeting were voted overwhelmingly in favor of the Merger, not enough shares were voted to achieve the two-thirds of the outstanding shares vote requirement. Accordingly, on November 4, 2014, Gyrodyne announced a further postponement of the special meeting until the first half of 2015. Given the small size of holdings of many Gyrodyne shareholders and the nature of various holders, we believe many holders may not have paid enough attention to the Merger to exercise their right to vote. The board believes, however, that shareholders who would exercise their subscription rights in the rights offering may be more interested in the current structure of Gyrodyne and thus more likely to vote their shares on the Merger proposal."
I believe the shareholder who didn't bother to vote, will not bother to participate in the offering and will be diluted. This could be a chance to get back in at lower prices. The "Strategic alternative costs" for Gyro over the past years and continuing are a little high for my taste.

KWG Komunale Wohnen
Deutsche Wohnen announced a takeover offer for €11.50 per Conwert share. Conwert is KWG's parent company, which means KWG is now implicit in play. I have increased my KWG position directly after the announcement in February and it is now trading higher. The majority of the portfolio of KWG should be considered non-core by Deutsche Wohnen.


Glentel is trading lower than my purchase price. With BCE trading for 53.32 this offers upside of about 12%, which I think is attractive. I have increased my position a little bit.

50% cash26.513.25
50% BCE0.497413.2653.32

implied value bid26.51

price glentel23.67100% cash



Weight Watchers

The purchase of weight watchers was a mistake. I did not understand the falling price on no news and thought either the price in December was too high or the price now (at purchase) too low. The high percentage of float shorted was another interesting piece. The enterprise value is dominated by debt and the business trend is downwards. Any change in the fundamentals will have a huge impact on the share price. The actual numbers were bad and management ignorant of the problems. I will hold the company for now to keep it on my radar, but I don't really think this will be a full position anytime soon with this management team.