In his Long-Short Equity model, manager Jeff Phillips uses empirical research to find positions that will support the model’s goal of delivering risk-adjusted returns. Recently he added Jazz Pharmaceuticals Inc (NASDAQ: JAZZ) to the model. JAZZ is a specialty pharmaceutical company that develops products intended to meet neurological and psychiatric medical needs. The company has been increasing its sales for a number of years. In 2007 the company reported $65.3 million in sales. In 2008 that number had grown to $67.5 million and then, in 2009, it reached $128.4 million. The company’s reported sales during the first three quarters of 2010 have already reached $120.5 million. The company’s total liabilities increased from $139.3 million in 2007 to $197.9 million in 2008, but then fell to $180.2 million in 2009. By the third quarter of 2010 their total liabilities had been reduced even further, to $108.8 million. In October, the company announced that the Food and Drug Administration had declined to approve its new drug for the treatment of Fibromyalgia.
Another new position added to the Long-Short Equity model this month was Transglobe Energy Corp (NASDAQ: TGA), a gas and oil exploration company with a focus on Yemen and Egypt. TGA’s net revenues fell from $131 million in 2008 to $116.3 million in 2009. In the first three quarters of 2010, however, the company has already reported a total of $119 million in revenues, beating 2009’s total. The company’s shareholder equity increased from $122.3 million in 2007 to $188.6 million in 2008, but fell to $171.6 million in 2008. By the third quarter of 2010, shareholder equity had increased to $207.7 million. The company’s outstanding shares have increased from 65.4 million in 2009 to 66.9 million by the third quarter of 2010.