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TMFHelical (98.74)

June is being rough on the Helical Port

Recs

7

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

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4 Comments – Post Your Own

#1) On June 08, 2011 at 2:51 PM, Momentum21 (93.61) wrote:

I seem to be noticing a more serious level of "capitulation talk" today.

It's either really, really good...or really, really bad. : )

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#2) On June 08, 2011 at 10:22 PM, HarryCarysGhost (99.69) wrote:

All I can say is, what were your intentions when you first bought the stock. This should be planned out before you hit the buy button. If your original thesis is still in tact stick with it and ignore Mr Markets gyrations (unless your adding)

If the company still seems solid, stick with it and maybe add more on the cheap.If you knew that it would'nt be a long term dump it quickly.

Cheers.

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#3) On June 08, 2011 at 11:20 PM, TMFHelical (98.74) wrote:

Momentum,

No capitulation yet, just strategic thinking.

HCGhost,

This is a real portfolio, not an abstract idea.  So no, the 'what did I think about the stock when I bought' can't exist in isolation.  If a strategic decision to have more cash available is made, it has to come from somewhere, and that place will always be from a stock that I like.  I can (and sometimes will be) wrong, and still 'right for me'.

But I noted 2 sales in the last month.  Cerner was always a momentum trade, and was sold appropriate to intent.  Medco was a disapointment, and fortunately one I did not lose money on.  I still like the space the company operates in, but its inability to hold large clients (CALPERS, Federal Employees, and potentially UNH) has to have me reconsider the core businesses abiltiy to carry the company forward and beyond.  I knew there was a potential for weakness here, and had to revisit.  Note I do still own CVS which has a PBM piece to its business (Caremark), but it gained the market share Medco lost and has activist investors operating behind the scenes, so it gets more slack. 

TMFHelical 

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#4) On June 08, 2011 at 11:43 PM, HarryCarysGhost (99.69) wrote:

Understood.

I was just throwing how I invest out there and did not look at your particular Cos. Please ignore if not helpful.

Cheers

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