Portfolio Update Heading into 2Q

The weather is too nice to be spending cycles on the blog, so here’s a quick summary of where I stand. Top 20% performers in green.

2Q pre-earnings

I added to my CTL position on news of the lawsuit. This strikes me as a ridiculous money-grab attempt by a disgruntled employee, and I expect any damages to be small. I think the stock has not rallied because investors are nervous about the report for this quarter. So I have a lot of exposure to CTL now. I appeared to be in good company. Activist Corvex submitted an updated filing showing that they added to their position and also owned some January 2018 call options.

I sold NSAT after a solid 40% gain in less than 6 months. I think the bidding war has mostly run its course.

ALIOY did what it was supposed to and did not move, but I did not end up getting any of the spin-off biotech shares.

HUM I closed out with a nice double-digit gain. I feel like the valuation is less attractive and there is a fair amount of healthcare uncertainty out there. I am still holding WCG because it still *looks* pretty cheap and they have consistently sandbagged guidance, resulting in big beats. I may change my mind depending on how they do now that they are through a long stretch of deals. Execution will be key, but I’m holding out some hope that they get bought.

I exited RDCM up 7%. I think this could be a one-trick pony stock, and while AT&T is a big customer to have they also have a lot of negotiating leverage and a track record of using it on small suppliers.

I also closed out of DISH and TMUS.

DISH I think will have other more attractive entry points within the next couple of years. I don’t see it being sold for several years at this point.

TMUS I was worried they were going to overpay for Sprint. It sounds like maybe they scoffed at the price Masa wants, and walked away for now. That’s a good thing. Operationally I think TMUS is doing just fine. The company should continue to take share away from VZ and T, and probably Sprint to a lesser degree. So I bought a few call options just out-of-the-money for November. At the very least I expect the phone cycle should help.

I did trim AOBC a bit immediately after the earnings report. I still think the stock is very cheap, but the share price had rallied a bit since I purchased and management sounded very cagey about 2Q in particular. Combined with a high accounts receivable, I decided to keep some powder dry. I plan to add more shares when I see insiders move or a change in the buyback setup.

I also added CBMX warrants and more DSKE warrants. My only real “new” company is SHECY since my last post. I plan to write more about them next month.

 

 

 

 

 

 

Advertisements

Author: secondhandstocks

The genesis for this blog stems from a Marine buddy and I came back from Afghanistan with more money than knowledge, and heedlessly tossed our hats into the stock market ring. A few months later, I remember discovering the classic book The Intelligent Investor by Graham and Dodd, and ravenously devouring my first introduction to value investing. That framework - with some generous additions by Seth Klarman, and Joel Greenblatt among others - guides my investment philosophy. I spent five years working in the intelligence field, both in the Marine Corps and then for a government agency after that. I speak Arabic and Pashto, have programming and analysis experience, and enjoy investing in technology companies as a hobby. I also spent a year on Wall Street working on a #1 Ranked Institutional Investor team, before deciding that that the Sell-Side was not for me.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s