Live From the Desk

Vertex Value Fund – quick ‘n dirty

The back drop for US equities is perhaps the best we’ve ever seen. The 10-year bond trades at 50 times earnings with no growth. Stocks on the other hand are trading at 14 times earnings and company earnings are growing. Stocks are poised for a major multiple-expansion, but even without that the earnings yield is …

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Blimey!

As previously reported, our holdings in European banks were sold earlier in the year. In recent months, share prices have dropped in the Royal Bank of Scotland and Barclays due to a weakening pound and the growing uncertainty around the Scottish referendum. Earlier this month, the Scottish vote gave us an opportunity to re-establish a …

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August Discount!

The last few days of July saw a general market decline, with some of our companies in the Vertex Managed Value Portfolio and Vertex Value Fund missing on quarterly earnings expectations. Mattel, Unisys, Wellcare, Genworth, Goodyear and Montpelier RE fell as much as 20% while many more declined on fears of a weak housing market …

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Arbitrage Risk Management

While a very high percentage of announced M&A deals close successfully, occasionally there are deals that fall apart. We strive to avoid deal failure through careful investment selection. Nevertheless, one risk in merger arbitrage is that the announced merger will lead to an opportunistic, hostile bid for the acquiring company itself. This dynamic recently played …

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What Does the Fed Say?

(For reference, watch the Norwegian phenomenon Ylvis here) We believe that one unspoken reason why the Fed has prolonged Quantitative Easing is that they still view growth capital as very constrained. Granted, Apple can issue debt at record low rates and there are plenty of headlines about new bond deals in the market but almost …

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