TMFHelical (98.95)

June is being rough on the Helical Port

June 08, 2011 – Comments (4) | RELATED TICKERS: MHS.DL , CERN , JNJ

So far this month, the Helical port has been taking its lumps.  Last month I posted some commentary on how I may consider protecting myself from a sell-off.  The port has had a pretty decent 2011, and my own sentiment is that the market had gotten more than a bit long in the tooth.  Ironically though, May saw the Helical port increase in value to $59,200.89.  Not shabby, as that was an ~ 18% year to date increase.  But .. that was then.

I noted last month, perhaps with some foresight, that I needed a checkpoint should the portfolio drop and tagged a 6% decrease as that point.  So, a 6% loss from the month end would be ~ $55,650.  Today (midday), I'm at $56, 318 -- so not so far off.  June 6th was a day when nearly 3% of the ports value was lost with big decreases in Amedisys and Exelixis, with the latter recovering a bit since then.

Here is how the port looks right now (again, mid-day).

AMED           75      2,007.00

ATHN            50      2,070.50

BRLI             150     3,433.50

CAH             70      3,069.50

CPHD           200     6,218.00

CVS             100     3,745.00

EXEL            300     2,880.00

GHDX           200     5,240.00

JNJ               90      5,920.20

MAKO          200     6,091.00

NVS              50      3,123.50

SGEN           150     2,908.50

Cash                       9,611.46 (17%)

As noted before, I sold Cerner on 5/3, and also sold Medco Health on 6/2.

CERN    Bought 2/24/2011  $2,452.50  Sold  5/3/2011 $2,969.95  Gain 21.1%  CAGR 113.3%

MHS      Bought 3/25/2011  $5,358.82  Sold  6/2/2011 $5,961.07  Gain 11.2%  CAGR   59.4%

I consider it fortunate I got out of MHS with a gain.  I laid out what I liked about MHS not too long ago.  But with the loss of the federal employees contract, and more noise from UNH about contract renewal, the core business may be seeing change.  Here is what I posted elsewhere:

I too saw an article a couple of days back related to UNH saber rattling, and like Ken, not for the first time. I decided to let my stake in MHS go. There is a lot I like about this company, not the least of which is the potential for leading/bringing IT based discipline to other aspects of healthcare (how is that for vague), as well as the ever growing generic wave.

But the core business of pharmacy benefit management seems to be moving from the market expansion phase to jostling for share and competing on price. I also worry that with health IT expanding, PBM may be little more than a module in someone else's broader future IT suite. If this is going to be a transitional time for MHS, I'd just as soon sit aside for awhile.

In any case, with me nearing my loss limit for the month, I may be looking to pare others as well (can't for a time though, since I'm posting).  Ironically, the 'stable' holdings like JNJ and NVS may be culled due to Eurpoean crisis concerns, as they do a lot of European business.  AMED faces an pretty uncertain quarter due to the 'face to face' requirement rollout for home care.  It may be best to step aside here too for a little while.  Booking gains in Genomic Health and more from Cepheid may make some sense.  We’ll see (I'm nothing if not fickle, but that is my current thinking should I continue to drop this month.

TMFHelical

Home Coverage Fool