Could Adding MERFX Impact Your Portfolio?
Upside moving trend
Precision Castparts (PCP), American International (SPG), Time Warner (TWC), Broadcom (BRCM), and Chubb (CB) are the top five holdings of The Merger Fund (MERFX). MERFX’s portfolio mainly consists of equity stocks in both long and short positions. Apart from Time Warner, all of the other remaining four stocks are trading above their respective 20-day and 100-day moving averages. MERFX’s total financial portfolio is trading below its 20-day, 50-day, and 100-day moving averages. This shows MERFX’s downward trend in the market.
Precision Castparts, American International, and Broadcom are trading at 3.6%, 5.1%, and 11% above their respective 100-day moving averages. In contrast, Time Warner is trading below its 100-day and 20-day moving averages by 0.94% and 0.21%.
The above chart shows the moving averages, forward target price, and returns for Precision Castparts, American International, Time Warner, Broadcom, and Chubb.
Analysts’ estimates
A survey conducted by Wall Street analysts indicates a downside of about 11.6% and 6.4% for Time Warner and American International, respectively, from the current levels in the next 12 months. Also, Precision Castparts and Broadcom have a downside target of 1.6% and 3.1% from the current levels, according to significant Wall Street analysts. The trailing 12-month EPS (earnings per share) for Precision Castparts, American International, Time Warner, Broadcom, and Chubb are $10.73, $5.27, $7.21, $1.11, and $8.65, respectively.
In the next part of the series, we’ll compare MERFX’s market performance with respect to the broader market like the S&P 500 (SPY).
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