Author: Cheng Yuan
Covestor model: Value with Catalyst
Disclosure: Long ENZN
I sold out of my position in Citigroup (NYSE: C) for a small gain in March in preparation for a better opportunity that I have been following for some time. My hope is this opportunity will produce a much better return than what Citigroup would have produced.
The model portfolio continued to trail the S & P 500 in March. Of note, my Enzon (Nasdaq: ENZN) position has lost all its gain. Even so, I continue to believe Enzon is trading below the combined value of its PEG-INTRON therepy, its CIMZIA royalty stream and cash.
Effectively, at current prices, investors are getting a free ride on Enzon’s lead compound PEGSN-38 and its Locked Nucliec Acid (LNA) potential. I am hopeful that management has been busy executing on its $200mm share repurchase which, if completed, ought to reduce shares outstanding by approximately 30%.
Here’s how Enzon has performed over the past year, via Google Finance:
