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Performance – October 2024

SSI tracking portfolio was down 3.1% in October 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.

 

TRACKING PORTFOLIO: -3.1% IN OCTOBER

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.

Screenshot 2024 10 30 at 16.30.54

 

PERFORMANCE SPLIT OCTOBER 2024

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

october split

 

PORTFOLIO IDEAS CLOSED IN OCTOBER

Far Limited (FAR.AX) – Liquidation/Activism Pressure +33% in 2.5 years
Following activist pressure, FAR entered liquidation mode. The play was centered around FAR’s contingent earnout from the Sangomar oil field, expected to pay-out A$80m by 2027 (versus A$45m market cap). Management was actively exploring an early monetization of the earnout. Even at a significant discount, this promised substantial upside if successful. After a lengthy process, recent updates revealed that while some offers were received, none met management’s expectations, making early monetization increasingly unlikely. Holding onto the CVR for several years and collecting payments could still be attractive. However, key risks include lower-than-expected Sangomar production or a drop in oil prices (already below the $70 maximum threshold). Although oil price risk could technically be hedged, that’s a layer of complexity I’m not looking to navigate. As a result, I’ve decided to close my FAR position at $0.505/share, or 33% gain in 2.5 years.

Territorial Bancorp (TBNK) – Merger Arbitrage +2% in 1 Month
TBNK presented an attractive merger arbitrage opportunity with two potential suitors: activist investor Blue Hill with an all cash bid, offering a 23% upside, and an ongoing stock-for-stock merger with Hope Bancorp (HOPE). TBNK’s stock was trading just slightly above HOPE’s offer, so risk-reward seemed appealing. Proxy firm ISS initially recommended shareholders to side with the activist, and management postponed the vote on HOPE’s merger, signaling a consideration of Blue Hill’s proposal. However, management raised significant concerns about Blue Hill’s offer, and over the following weeks, the activist failed to adequately address these issues. Proxy firms ultimately reversed their recommendation, making it increasingly likely that shareholders will now support HOPE’s offer. I have since closed my position in TBNK, fortunately with a slight gain, as HOPE’s share price (and thus the dollar value of HOPE’s offer) has risen. The shareholder vote is scheduled for November 6. Currently, TBNK trades a few points above HOPE’s offer, with a 20%+ spread to Landon’s bid.

 

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