Monday, October 12, 2009

Random Stuff

You’re probably wondering what happened to me since my postings have dried up… It’s tough to keep track of the market and focus on your day job. Maybe my day job should be managing a portfolio? :) Anyways, I’ve been looking at some big picture trends. So I’ll just blab a bit about some stuff that comes to my mind...

The first trend that pops in my mind is the increase Federal funding for basic life science research (increase funding to the NIH, NCI, NSF and the FDA). The sector that will benefit most from this trend is the life science reagent suppliers. My favorites in this space are Life Technologies (Ticker: LIFE), Qiagen (Ticker: QGEN), Sigma Aldrich (Ticker: SIAL), Thermo Fisher Scientific (Ticker: TMO), Techne (Ticker: TECH) and Bio-Rad Laboratories (Ticker: BIO). I currently have positions in Life Technologies and Qiagen, which I’ve owned since their IPOs’ wayyy back. I’m looking to initiate positions in the others when the price is right.

The second trend I like is the commodities in particular black gold. Oil is on the up and up… there’s no doubt about that. I’m focusing on the deep offshore oil drillers such as Diamond Offshore Drilling (Ticker: DO) and Transocean (Ticker: RIG). I currently have a position in Diamond Offshore Drilling. This company is all business in maximizing shareholder value with a nice dividend payout. I recently took some profits in Petrobras (Ticker: PBR), but will get back in on a pullback.

I like the biotech sector, where some great innovation is taking place. I’m still heavy in this sector with holdings in Amgen (Ticker: AMGN), Genzyme (Ticker: GENZ), BioMarin Pharmaceutical (Ticker: BMRN) and Biogen Idec (Ticker: BIIB). I’m not looking for a lottery ticket in this group as I only focus on the profitable companies. These companies will generate steady growth and there’s a chance they may get acquired if the big pharmas get hungry.

Finally, I like to balance my portfolio with a bit of risk arbitrage. I view this as the income producing part of my portfolio. Right now I have risk arb positions in Sun Microsystems (Ticker: JAVA) and Centennial Communications (Ticker: CYCL). I’m expecting both to close before year end… hopefully by the end of November at the latest. Waiting for the deals to close can drive you nuts sometimes!

Well, that’s it for now. Just some thoughts...


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