Review of a few Positions

This week’s post will review the performance of a few positions I currently have interests in.  Unless explicitly stated, this is not an endorsement of getting into these positions at this time. This is because the reasons for purchasing them may have changed.

Conduent

In January after the spinnoff, I purchased 100 shares of CNDT at $14.38, today the price is near $15.02, representing over a 4% return in a month.  As stated in the original post, the holding period for this stock is closer to 2-4 years.  I expect that this company’s actual share value is closer to $22/share, so such a move is simply confirmatory. TDAmeritrade indicates that the institutional investor commitment is a mere 16.75%.  One of the things I am looking for is an increase from the institutional investments to closer to 50% before selling this security.

Mylan

This week, Pharmaceuticals jumped on bullish call options for Mylan.  This appears to have something to do with David Tepper who reduced his position in Apple in favor of increased or new positions in Mylan, Pfizer, and Allergan.  Tepper is one of the few hedge fund managers that has performed well since the financial crisis according to Forbes magazine.  Tepper’s positions were revealed on Valentines Day and rose almost 5% that day and the next-solidly placing the price just over $42/share.  Consequently those call options seem to be indicating that the market movers expect a move beyond $42.5/share because many of them were placed at that price.  The open interest in $42.50 call options expiring on March 17 exceeds 7,800 contracts showing an extremely bullish sentiment for this company.

Market overall

I still think the market is in for some volatile days ahead.  The Trump trade we have discussed in several posts is still showing exuberance that seems to think nothing could go wrong.  Donald Trump seems to be a shoot from the hip type of president which could cause some uncertainty-Wall Street traders are fickle and seem to hate uncertainty.  They could respond quickly to some unfavorable policy and send the market down as quickly as they pushed it up during the election.  I may be wrong, and hope that I am because this would indicate a better economy for the coming years, but the skeptic in me keeps me from a full commitment of funds due to such a possibility.

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