Performance – March 2024

SSI tracking portfolio was up 3.2% in March 2024. A detailed performance breakdown is provided below.

Below you will find a more detailed breakdown of tracking portfolio returns by individual names as well as elaborations on names exited during the month.



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. See full disclaimer here.

The chart below depicts the returns of SSI Tracking Portfolio since the start of 2017.

performance march



The graph below details the individual MoM performance of all SSI Portfolio ideas that were active during the month of March 2024.

march splits



MiX Telematics (MIXT) +20% in 5.5 Months
MiX Telematics, an automotive telematics company, was getting acquired by PowerFleet in a stock-for-stock for stock deal. Plenty of inexpensive borrow was available for hedging. It was a bit of an unusual merger case with a smaller peer scooping up the larger one and taking over the reins of the combined company. However, downside risk for the hedged trade seemed well protected and the transaction appeared very likely to close successfully due to a strong strategic rationale. This included significant expansion in scale, substantial cost synergies, and enhanced cross-selling/upselling opportunities. The merger was contingent upon approval from shareholders of both companies and regulatory consent. As anticipated, all conditions were met, and the merger concluded, resulting in a 20% return in 5.5 months after borrow fees.

Cummins (CMI) +$1400 in 8 days
Another standard split-off is now in the bag. Vehicle engine and powertrain components giant Cummins ($37bn mcap) was divesting all of its 80.5% stake in Atmus Filtration Technologies, its filtration products arm that was IPO’ed a few quarters ago. Shareholders of CMI had the option to participate in the tender and exchange their CMI shares for ATMU at a 7.53% premium. The tender seemed likely to get oversubscribed, but odd lot holders (<100 shares) were to be accepted on a priority basis. Initially, due to a lack of available hedging options, I refrained from taking action, opting to reevaluate the situation closer to the offer expiration date. After the final exchange ratio was announced, borrow suddenly available on Interactive Brokers, enabling the opening of a hedged trade. Following the successful completion of the split-off, this hedged position generated a gross return of $1,900. After deducting borrow fees, the net return amounted to $1,400, all within a span of just 8 days. Consistent with historical trends, the unhedged trade proved to be significantly more profitable, yielding a return of $4,000 over the same period.

Tidewater Midstream And Infrastructure (TWM.TO) -22% in 6 Months
In September, Tidewater Midstream And Infrastructure sold its key asset, Pipestone, for C$650m, representing two-thirds of the company’s EV. Pro forma for the sale proceeds and excluding TWM’s public stake in it’s renewable diesel subsidiary LCFS, the remaining refinery and midstream assets were trading for only 2.5x 2023E EBITDA. This valuation was significantly below peer levels and the cost basis of the assets. The stock barely budged on the news and it seemed likely the valuation would eventually start re-rating, at least once the Pipestone sale closed. However, the completion of the divestment did not have the desired impact, even though TWM subsequently announced a 10% buyback program. The company then released bad Q4 results and it quickly became clear that management now plans to heavily invest in building new renewable energy assets, an area where the company’s track record wasn’t great. On updated financials, the stock no longer looked cheap and given the major thesis shift, I’ve decided to close the idea and move on.


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