Merger Arbitrage Spread Performance – 28 October 2018

Merger Arbitrage Spread Performance – 28 October 2018

This is the Merger Arbitrage Spread Performance October 28, 2018 analysis. A review of the top 20 tradeable cash based merger arb spreads in the USA for the week 22nd – 26th October. Included in this week’s report are the winners, losers and overall performance of the portfolio. This report is based upon the Merger Arbitrage Limited top 20 (T20) list of cash merger arbitrage spreads available as at 21st October.

Winners

This week’s star performer was NXTM gaining 0.83%. This follows an announcement by the German firm moving the expected completition date to November 5th. This clarification appears to have placated some of the arbs and the price has risen accordingly. There still remains an attractive 8.46% available profit on this spread. A similiar gain was also recorded by ECYT which saw its stock rise 0.77% for the week. MZOR gained 0.24% despite Jim Cramer suggesting investors should take the money and run. There is now however only 0.93% left in the spread at the current deal agreement. The only other gainer for the week was IMPV which rose 0.07%.
 

Losers

This week’s worst performer, RCII which dropped 2.45% after getting caught up in the wider market sell off. IDTI fell 1.64% over concerns about its results announcement due out Monday 29th October. Also falling were USG 0.99% which missed its expected earnings figures on Friday. Other notable fallers during the week were AVA which fell 0.83% and AHL which fell 0.43% following its earnings announcement on Wednesday. 
 

Portfolio Performance

Losers thoroughly out-paced the winners this week by 16 to 4, one of the biggest margins ever seen and this is clearly reflected in the performance of the portfolio. The portfolio performance for the top 20 was negative 0.33% largely due to the superior number of negative performers rather than any single target stock. However, this loss still compares extremely favorably with the large loss recorded in the SPY of 3.95%. The IQ Merger Arbitrage Fund ETF (MNA) was down 0.38%. 
MNA SPY VIX Returns Table 20181026

MNA SPY VIX Returns Table 20181026
*We have not included MRGR ETF for liquidity reasons. Click the table to read our Merger Arbitrage ETF Review and see a discussion of how liquidity and other factors affect the performance of these products.

And Finally…

The most recent list of the largest spreads is already available, and you can check out the rules for inclusion here. Our free merger arbitrage spread calculator is also available for FREE download. This can be used to value the spread of any stock-for-stock deals you may be interested in.

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