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TMFHelical (98.70)

Helical Port September Update

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October 11, 2011 – Comments (2) | RELATED TICKERS: GNOM , PPDI.DL , AFAM

The Helical Port exited September / entered October with $54,885.66.  This was a substantial drop off from the end of August, but still up ~9.4% year to date.  No complaints, as today the account is already back to $58,996.76.

 

There was activity at the beginning of the month (9/6) as described in a prior post.  Specifically, I let go of Novartis and Medtronic, as well as pared back JNJ based on continued concerns over Europe.  I also let UNH go to increase cash.  Cash today is at $12,068.98, just over 20% of the portfolio.  I'd like to gain the confidence to begin redeploying some of this, but not yet.  Also, I have a bit of a cash proxy in the PPDI position.  At the beginning of September I noted that I had "… a very large position (>15%) in PPDI …  PPDI seemed like an appealing, but not certain arbitrage opportunity, as there are indications of a pending buyout announcement, with Carlyle group leading multiple bidders and analysts expecting a $33 to $38 price.".  This has played out well, with a buyout offer on the table for $33.25, and is the main reason the port is higher now than at the start of the month, when the appointment of a new CEO gave the market the impression that this would be perhaps delayed a bit.  I'm in no rush to realize this, and with the deal expected to close before year end, I may just until it does (want more than $33 anyway).

 

It has been awhile since I listed out the holdings (trade restrictions and formatting make this annoying to do), but they are as follows.

Symbol       Qty       Last Price      Mkt Value    % Port   Name

AFAM        100         18.17          $1,817.00      3.1%    ALMOST FAMILY INC

ATHN          50         61.2            $3,060.00      5.2%    ATHENAHEALTH INC  COM

CPHD       135          39.42         $5,321.70      9.0%    CEPHEID INC

CVS         100          34.26          $3,426.00      5.8%    CVS CORP

EXEL        300           5.65          $1,695.00       2.9%   EXELIXIS INC

GNOM      125           5.46             $682.50       1.2%    COMPLETE GENOMICS INC

HCN          50          47.11          $2,355.50       4.0%    HEALTH CARE REIT

JNJ            60          63.96          $3,837.60       6.5%    JOHNSON & JOHNSON

MAKO      200           38.5           $7,700.00      13.1%   MAKO SURGICAL CORP  COM

MR          100           24.34          $2,434.00       4.1%   MINDRAY MEDICAL INTL LTD (CHN)

PPDI       350           32.29        $11,302.38     19.2%   PHARMACEUTICAL PROD DEV INC

SGEN      150           21.29          $3,193.50       5.4%   SEATTLE GENETICS INC

 

Some other notes are that the Senate inquiry into Medicare billing by home health agencies found some shenanigans, such as with former holding Amedisys, but not with Almost Family.  I may add to this position.  Cepheid continues to perform well, but with a lot of system placements last quarter, I may protect the price through earnings here (maybe with a stop loss).  Paring this back a few times this year has been a mistake, but at ~10% of port it is about as big as I care to have it.  Companies that sell sequencing equipment have been hammered by tight funding budgets, but this could be an opportunity for Complete Genomics as more genome centers may buy rather than sequence.  Once bitten here as price drops have outpaced customer increases, I may wait for the quarter to add (or I may be impetuous, still undecided).  The health insurance space is worth more consideration, and perhaps a position in the portfolio again.

 

TMFHelical

Home Coverage Fool

2 Comments – Post Your Own

#1) On October 11, 2011 at 2:14 PM, EnigmaDude (98.06) wrote:

Thanks for the update.  Seems like a good buying opportunity for AFAM. On a related note, I used to own some shares of Continucare who have since merged with MDF.  Have you considered adding a position to your port? (assuming it fits with your investment profile)

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#2) On October 11, 2011 at 3:42 PM, TMFHelical (98.70) wrote:

EnigmaDude,

I'm not familiar with Metropolitan Health.  I don't feel all that inclined to invest in stand alone physician networks or hospital administration due to concerns about being squeezed by payors. I know this is not really different from considering home care providers, but the home care has a solid (at least I think so) broad value proposition to argue for supporting rather than squeezing them.  Its a risky space, thus the low allocation.

TMFHelical

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