Shaving a Warrant Position

By Travis Johnson, Stock Gumshoe, October 15, 2013

Last time I wrote about my warrant holdings in both PNC Financial and Boston Private Financial, back in August, I said that the prices are eminently justifiable and there’s still a large potential upside … but that after a solid runup in the prices I would be more likely to sell some of my holdings rather than buy for personal portfolio reasons (both had grown to be large holdings, and while I like the leverage of warrants I don’t want them driving my portfolio — they’re too volatile and have too much of a chance of going to zero).

So … I still like both warrants, but I’ve sold a third of my Boston Private Financial Holdings warrants (BPFHW), which I consider and have always considered to be the riskier of the two TARP warrants I own and have written about. It’s still a reasonable price — you effectively pay $4.75 or so right now for the right to buy the stock at $8, and the stock is around $11.50, so it takes only a few percentage points of gain each year between now and 2018 expiration to make them worthwhile, but the underlying company (BPFH) is a small asset manager and private bank, is a volatile stock, and isn’t definitively cheap, so I want to take some profits. I’ll let the other 2/3 of my holding ride for a while and see how the company is doing, and I have no particular intention of selling my PNC Warrants (PNC-WT) right now.

(adsbygoogle = window.adsbygoogle || []).push({}); (adsbygoogle = window.adsbygoogle || []).push({});
Are you getting our free Daily Update
"reveal" emails? If not,
just click here...

(function () { var e = document.createElement('script'); e.type = 'text/javascript'; e.async = true; e.src = ('https:' == document.location.protocol ? 'https' : 'http') + '://'; e.className = 'createsend-script'; var s = document.getElementsByTagName('script')[0]; s.parentNode.insertBefore(e, s); })();

Sign Up for a Premium Membership

To view the rest of this article (and to have full access to the rest of our articles), sign up.
Already a member, log in.

Become a member

We use cookies on this site to enhance your user experience. By clicking any link on this page you are giving your consent for us to set cookies.

More Info