My portfolio was largely:
I lagged the S&P 500 index but still had a profitable year.
Long: LMCA
Short: JKS, CSIQ, SPWR, ZU, PCYO, EBIX (puts and common), AMT puts, TTS, YONG puts, AVID
Closed: KWG*, short NUS.TO, short BBRY, short CREE, short TLT
I was wrong about John McCarvel. The way I judge a CEO’s operating ability is by looking at his or her prior track record. McCarvel had a run of a few very good years immediately after he became CEO in Feb 2010. In this situation, extrapolating from the past did not work. Currently, it seems like McCarvel was riding off of the momentum from the prior CEO (John Duerden) and is on track to slowly destroy Crocs. His decision to mislead investors with the share repurchase fakeout is bizarre and stupid. He is quickly destroying his credibility. And why exactly does he feel the need to mislead investors?
This is a small position for me that I bought puts yesterday (Nov 5). At the time, I did not realize that earnings was today. The implied volatility on CHK options is in the low 30s for the 2016 LEAPs and seems to be rather low. The historical volatility in the past 3 years was 40.97 according to Morningstar. I think that the stock is a little overvalued (see my CHK post) and that the put options are a little undervalued. This trade doesn’t have the greatest margin of safety.
Crocs’ latest earnings release is titled: “Crocs Inc. Reports Third Quarter Financial Results and Announces 15 Million Share Increase in Share Repurchase Authorization“. The title clearly highlights the increase in the share repurchase authorization. However, Crocs did not repurchase any shares in the last quarter! The press release is trying to trick people into thinking that Crocs will aggressively buy back more shares, which is unlikely. The intentionally misleading press release is not a sign of a CEO who is honest with shareholders.
I don’t think that these are great trades but they are ones that I have made.
This year could have been better since none of my major short positions worked out. The long side is doing well mainly because of Altisource (up 45% since I wrote about it on Jan 10 at $93.57). The junior mining-related part of my portfolio happen to be up even though the TSX Venture is down a quarter year-to-date.
