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Friday, October 15, 2010

Stock of the month update -- Shamir Optical (SHMR)

Last Spring, I named Shamir Optical (symbol SHMR) as the stock of the month for May. At the time, Shamir was selling in the mid $9 area. The stock has done well since then; as of yesterday's close it was selling at $12.36. Overnight, the company announced that it had made a deal with a French company that will result in the shareholders being bought out at $14.50 per share and further that the shareholders will still get the dividend of about 80 cents (depending on the exchange rate) before the closing. This news has sent the stock up to $14.37 at the moment.

For those of you who still are holding this stock, I wanted to report that I sold out this morning on the news. While there certainly is still a nice up side in the stock (13 cents remaining to get to $14.50 plus a dividend of 80 cents), I make it a practice to not hold for arbitrage plays. There is always the risk that something could go wrong and the entire deal fall apart. I would rather take the profit and move on.

Shamir was clearly in the right market. Its lenses were perfect for the agining populations of both Europe and North America. It made me a lot of money and I hope it did the same for you.

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