Enron

I've heard good reviews with this movie, Enron: The Smartest Guys in the Room. I just finished watching the documentary and it really is an eye opener. The way they screwed everyone over was simply amazing. If you get a chance, check it out...

Biotech Rotation

There definitely appears to be a rotation in biotech sector. The mid-tier to smaller companies are outperforming the large cap biotechs. This is pretty obvious if you compare the various biotech exchange traded funds (ETF’s). The Merrill Lynch Holders Trust (Ticker: BBH) has underperformed the other biotech ETF’s such as the: Dynamic Biotechnology & Genome Portfolio (Ticker: PBE), Biotech SPDR (Ticker: XBI) and the Nasdaq Biotechnology iShares (Ticker: IBB). The BBH is ~ 70% concentrated in the large cap biotechs: Genentech and Amgen. The rest of the biotech exchange traded funds have a more diversified portfolio and are trading at 52 week highs. I would probably avoid the BBH for most biotech investors since this ETF is not well diversified and is expensive to purchase (offered only in 100 share lots). Out of the 4 ETF’s, the one I like the most is PBE. This fund has a little bit of everything and provides a good diversification. Here’s a 6 month chart comparing the performance of BBH to PBE.



Note: I do not own any of the biotech ETF's.

Azko Nobel, huh?

Azko Nobel is a Netherlands based pharma / chemical company. The company plans to increase shareholder value by spinning off the pharma and the chemical coating business in the second half of this year. The stock went up on this news, but I think there's probably more upside. Here's the details of the ipo spin off: click here. The spin off of the pharma unit, Organon Biosciences, is the most attractive part of the company. The other unit is a chemical coating business, which is actually ok. The company's not going to do anything for a while so just keep an eye on it. I might consider picking up some shares in the pharma spin off. You can purchase the stock now and just wait to receive shares in the spin offs. Akzo Nobel is traded as an ADR (Ticker: AKZOY).

Note: Nope, I currently don't own any stock in this company.

Quick Review of 2006

Taking a look at the transactions I made in 2006, it doesn't look too pretty. The one that hurts the most was the purchase of the Fidelity Smaller Company Japan Fund (FJSCX). I purchased this fund for my Roth IRA in January near the peak and so far I'm down 15.78%. Fortunately it makes up only a tiny percentage of my total retirement portfolio. I believe we're still in the early stages of a Japanese economic recovery so I'm not worried about this correction. My other trades this year were the purchase of some more of the Fidelity Contra Fund (FCNTX) and Amgen (AMGN). The Fidelity Contra Fund and AMGEN are both up slightly so far. I'll limit my stock purchases this year since I need to start building cash for the condo down payment. I'll probably start reducing my 401K contribution and just contribute enough to recieve the entire company match. I still have plenty of time to raise the cash so no worries yet...

Here's the chart of the Fidelity Smaller Company Japan Fund; not pretty at all...



I just finished my sis, my parents and my own tax returns! A big load is off my shoulders. It's never fun to do taxes even with the help of a tax program. This year I had the opportunity to try Tax Cut and Turbo Tax. Turbo Tax is just so straight forward and much easier to use compared to Tax Cut. Turbo Tax wins!

Qiagen Reports

Finally, there’s a good earnings report from Qiagen (QGEN). Yesterday, Qiagen reported earnings per share of $0.13, which beat the estimates of $0.12. Revenues came in at $104.3 million, which came in just under expectations of $105.2 million. The market reacted very favorably to the earnings report and the stock increased 5.4% on very heavy volume to close at $13.18. The company has really transformed itself and is now the fourth largest molecular diagnostics company in the world. This company is a cash cow... just take a look at their free cash flow. They generated $77.5 million in free cash flow in 2005 compared to $41.5 million in 2004. This free cash flow number is big. Qiagen should go higher...



Oh, Genzyme (GENZ) reports tommorow morning. I'm not expecting any blowouts; just something in line.

Note: I have positions in both Qiagen and Genzyme.

Fun Reading

I haven't had a chance to read any investment books lately. So today, I decided it was time to sit back and read a fun investment book. I decided to get:



I admit the book could use a more creative title, but so far so good after reading the first three chapters. The author focuses on special situations such as spin offs in making money in stocks.

I still don't have a good feel of the market so I'll continue to sit back and wait...

A Bunch of Little Stuff...

(1) I've just started working on my taxes and I'm going to be cutting a nice check to the Treasury Department. I locked in some gains in Q4 and I was fortunate that most of these gains were long term. Sooner or later, you're going to pay Uncle Sam for his share of the gains. I better mail out my check soon or I'll get hit with some late payment penalties :(

(2) The condo construction looks like it's going well with a projected completion date of 11/14/07. I'll be interesting to see how close they actually come to the completion date. They have a web site, which updates the construction progress on a monthly basis. So any bets on the project being completed on time? You may have to wait awhile for the results!

(3) I'm sure many people have heard that the Boston Globe accidentally released the names and credit numbers of their home subscribers. Well, I'm one of the unfortunate subscribers, whose credit number is floating around somewhere. They're going to provide a credit report service for a period of one year to their affected customers. I don't think that's enough. I wrote them a nice email informing them of my concerns and even suggested that they credit me one month subscription of the Globe. They actually agreed to give me a month free. I was surprised, but hey, I'll take it.

Ok, that's enough with these little stuff. I just haven't had time to really keep a good tab on the market to make any decisions. Hopefully my next post will be more informative...

Don't Listen to Others

Last week I picked up some Amgen (AMGN) and guess what? It rose 5% today on word that Roche Holdings (RHHBY) has delayed marketing Amgen's generic anemia drug until 2009. And that's assuming they'll receive regulatory approval and prevail against Amgen's patent lawsuit. Again, if you listened to the analysts last week they would have gotten you out of the stock at its low. I bet there are analysts getting ready to upgrade the stock now so they don't look bad. I'm going to hang onto Amgen and not sell for a quick gain. Do your own research, make your own decisions and don't listen to anyone (including me)!