Manager: Bob Freedland
Model: Healthcare
Disclosure: Long RMD, ILMN as of time of writing
During the month of April, 2011, I made three changes in the Healthcare model, selling my position in Edwards LifeSciences Corp. (NYSE: EW) after some concerns were raised at a medical meeting regarding the safety of some of their valves. The stock recovered from this dip, the technology appears to be promising and I may well revisit this company in the future as the opportunity arises.
Replacing my position in EW, I repurchased a position in ResMed (NYSE: RMD), which demonstrates my willingness to revisit prior holdings. RMD had been under considerable selling pressure as its CEO, Kieran Gallahue, quit to take a job with CareFusion. Peter Farrell, the founding CEO who started the firm in 1989, became interim CEO. The fundamentals of this company which deals with sleep apnea problems often associated with obesity remain strong and I chose to purchase stock with this in mind.
It has been my decision to try to move into more ‘cutting-edge’ companies in this portfolio seeking to improve the performance. With that in mind, I added shares of Illumina (NASDAQ: ILMN) later in April to the holdings. Illumina develops, manufactures, and markets integrated systems for the analysis of genetic variation and biological function. This company is positioning itself as a leading provider of equipment that addresses the problem of sequencing the human genome in search of disease treatments and understanding. The company has real revenue and is profitable as this 1st quarter 2011 report demonstrates.
I am glad that the Healthcare Model has been performing well the past six months and look forward to continued tweaking of the holdings to identify some of the more promising stocks in this dynamic area of our economy.
Sources for EW:
“Edwards shares waver on heart valve data concerns” Susan Kelly. Reuters, 4/4. http://www.reuters.com/article/2011/04/04/us–edwards–shares–idUSTRE7333EC20110404?feedType=RSS&feedName=globalMarketsNews&rpc=43
“Early Clinical Experience With EDWARDS INTUITY Valve System Demonstrates Promise of New Technology” Edwards Lifesciences Press Release, 5/11. http://finance.yahoo.com/news/Early–Clinical–Experience–iw-1023424745.html?x=0&.v=1
Sources for RMD:
“ResMed Falls to 10-Month Low After CEO Gallahue Leaves for CareFusion Post” Jason Gale. Bloomberg, 2/2. http://www.bloomberg.com/news/2011-02-02/resmed–falls–to-10-month–low–after–ceo–gallahue–joins–carefusion.html?cmpid=yhoo
“Is ResMed a Good Bet on Obesity?” Stephen Marini. The Motley Fool, 3/17. http://www.fool.com/investing/value/2011/03/17/is–resmed–a–good–bet–on–obesity.aspx
Sources for ILMN:
“Illumina Inc. Profile” Yahoo Finance. http://finance.yahoo.com/q/pr?s=ILMN+Profile
“Illumina Reports Financial Results for First Quarter 2011” Illumina Inc Press Release. 4/26. http://finance.yahoo.com/news/Illumina-Reports-Financial-bw-642986469.html?x=0&.v=1
