Bought Deutsche Pfandbriefbank

 Deutsche Pfandbriefbank

 European Bank's share prices have fallen sharply this year. I believe there could be cases of the baby being thron out with the bathwater and established a position in Deutsche Pfandbriefbank. A favourite blog of mine has a good write-up of the bank and due to the rather boring business nothing much has changed since then.

You can see how the blog portfolio is doing under the portfolio tab of the blog.

Update tender situations 

name	ticker	sum	mcap	% mcap	odd lot	min	max	announced+1	due date	price now	price min	price max
INTRAWEST RESORTS HOLDINGS	snow	$50,000,000	390,872,331	12.79%	yes	9	10	1/13/2016	2/10/2016	8.46	8.09	8.83
Siliconware Precision	spil	$1,271,084,854	4,802,458,268	26.47%	yes	275 twd	8.25	12/23/2015	3/17/2016	7.66	7.27	8.12
Fortress Investment	fig	$100,000,000	2,134,164,633	9.52%	yes	4.25	4.75	2/5/2016	3/4/2016	4.4	4.28	4.46

The tender situations are looking good. Snow has secured financing due to sale of IRCG:

"The Company will use a portion of its cash and cash equivalents on hand to fund the purchase of shares in the Tender Offer. The Tender Offer is not conditioned upon obtaining financing or any minimum number of shares being tendered; however, the Tender Offer is subject to a number of other terms and conditions, which are specified in the Offer to Purchase dated January 12, 2016, including the condition that the Company’s sale of IRCG to Diamond has been completed. As described in Note 2, "Significant Accounting Policies", the IRCG Transaction closed on January 29, 2016."

Fortress is another interesting situation to watch for now. They can easily finance the buy-back with cash on hand.

Bought SNOW, AAPL and Hornbach

With the market offering more reasonable put more money to work again.

SNOW

Snow does have an open dutch auction tender offer with odd-lot priority. I have bought 99 shares under $9 and will tender them for a profit of at least ~$40.

name

ticker

sum

mcap

% mcap

odd lot

min

max

announced+1

due date

price now

price min

price max

INTRAWEST RESORTS HOLDINGS

snow

$50,000,000

385,721,274

12.96%

yes

9

10

1/13/2016

2/10/2016

8.53

8.57

8.83

  

AAPL 

 This is just a short-term trade. Apple looks undervalued here. The expectations have come down a bit. The company still generates much cash. Although I see the low tax rate for foreign profits at risk here, when the OECD will finish their BEPS initiative.

Hornbach

The price dropped below €26 and this stock was on my watchlist to buy at this price. The last quarter was rather bad because of strong competition. Hornbach has a price guarantee and reacts on price decreases by their competitors. This means they "invest" in the perception of low prices. Customers should not feel the need to compare prices all the time.
Interestingly Hornbach offers free Wi-Fi in their DIQ megastores. If one finds a cheaper price online you get the cheaper price of the competitor minus 10% via their price guarantee. I see some intangible value here. Additionally I went to stores and looked around. The employees do not change all the time and seem to know their products quite well. For inventory management a SAP system is used.

SPIL

There is also a tender with an odd-lot priority open right now. The price is higher than the current share price.

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

Merger Arb Cleco:CNL

Cleco

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:
http://seekingalpha.com/article/3460066-safe-11-percent-annual-return-with-cleco

name target

symbol

price

discount

upside

bid total

Cleco

CNL

49.82

-10.67%

11.94%

55.77

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.

Stock

price

price Entry

Date Entry

Active

Return

v S&P500 [€]

Annualized Return

Weight Watchers

$24.81

$19.00

1/9/2015

11/12/2015

30.58%

20.10%

37.33%

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 glentel	26.41	100% cash
discount	-0.37%	-0.34%
upside	0.37%	0.34%

Glentel

$26.44

CA$ 24.96

1/15/2015

5/6/2015

5.93%

-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.

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

€ 9.52

9/5/2014

4/28/2015

14.29%

-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:

	buy	liquidation
cashflow	-3.39	3.6
date	4/28/2015	5/31/2016
pre-tax IRR	5.65%

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

Updates Gyro, KWG, Glentel, WTW,

Gyrodyne

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

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.

		glentel
50% cash	26.5	13.25
50% BCE	0.4974	13.26	53.32
	implied value bid	26.51
	price glentel	23.67	100% cash
	discount	-10.72%	-10.68%
	upside	12.00%	11.96%

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.