Performance – July 2021

Our tracking portfolio generated 1.3% return during July 2021 and 47% year-to-date. A detailed performance breakdown is provided below.

We have posted 15 new special situation ideas in July. Two ideas were closed during the month at a nice gain – DOO.TO tender offer (+C$795 in 1 month) and NEWA going private (+30% in 3.5 months).

46 ideas are currently active on SSI.



monthly performance historical 1

Disclaimer: These are not actual trading results. Tracking Portfolio is only an information tool to indicate the aggregate performance of special situation investments published on this website. Quick Ideas are not part of the tracking portfolio. See full disclaimer here.

The chart below depicts hypothetical returns of $10k tracking portfolio since the start of 2017:

july 2021 performance 2



The tracking portfolio performance in July was very pleasant generating +1.3% MoM and a total of 524% since 2017. Most of the gains in July were driven by the performance of KKVX.L (which also paid out £0.07/share distribution), 690.D and LTRPA positions. The worst performing cases were MX and AAMC, although, no negative developments happened to both of these and they still offer very substantial upside.

The graph below details the individual MoM performance of all ideas that were active during the month. This chart excludes Quick Ideas.

july21 att



Quick ideas are not included in the tracking portfolio.

BRP Inc. (DOO.TO) +C$795 in 1 month
BRP Inc., power-sport vehicle and marine product company, launched a substantial issuers bid with odd-lot provision at C$94-C$113/share for a total of C$350m or 4% of outstanding shares. Shares were trading close to the lower limit of the range providing arbitrageurs with a cheap 1-month option on any positive developments or improved BRP price. Due to high withholding taxes on this offer, the participation in the tender was suitable only for Canadian residents or others who are not subject to these taxes. Eventually, the offer was completed at the middle of the tender range (C$103.5/share) with 83% proration. The idea was closed with a C$795 profit in 1 month for odd lot positions.

Newater Technology (NEWA) +30% in 3.5 months
NEWA was subject to privatization by management (owned 44%) at $3.65/share. However, a few weeks before the shareholder meeting, a new buyer (Fulcan) appeared with a $4.90/share offer. However, NEWA continued to trade at a 15% spread even to the lower management’s offer. So the downside seemed protected, while the optionality of Fulcan’s offer provided considerable additional upside. The board rejected the new offer and in turn, Fulcan sued them. However, the court later discharged the injunction and management proceeded with their original privatization offer at $3.65/share. Interestingly, not long before the closing of the transaction, NEWA shares skyrocketed significantly above the offer price (most likely due to some kind of pump & dump) and we have closed the idea with a 30% gain in 3.5 months.


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