EQM Capital’s Mid Cap Quant portfolio performed in line with the benchmark S&P 400 Mid-Cap index (MID) in November. One of the top-performing names in the portfolio was apparel and accessory designer and marketer, Fifth & Pacific Companies (FNP) which was purchased for the portfolio early in November.
Fifth & Pacific operates in four segments: Juicy Couture, Lucky Brand, Kate Spade and Adelington Design Group. Shares have been rising on strong fundamentals and the prospect of the company selling its Lucky Brand denim business.
Another top performer in the portfolio was biopharma company Alkermes (ALKS). The company’s product portfolio has been strengthened by its recent purchase of Elan Corporation’s drug technology unit, resulting in boosted revenues. The company’s legacy product Vivitrol, to treat alcohol and drug dependence, is also experiencing robust sales.
Salix Pharmaceuticals (SLXP) was another top-performing name during the month. The company develops and sells gastrointestinal drugs. Shares rose in November on an announced agreement to acquire another biotech name in the space, Santaurus (SNTS). The combined company is expected to deliver strong growth and product synergies.
One disappointing name in the portfolio was technology name InfoBlox (BLOX), which reported strong quarterly results, beating estimates by .03, but gave cautious future guidance. InfoBlox markets network control solutions. The stock hit a three-month low after reporting earnings and is currently under review as a possible candidate for sale.
Heading into the end of the year, the market will be focused on retail sales as an indicator of the health of the consumer and the overall economy. Traditionally smaller cap names have outperformed in December, which bodes well for Mid Cap stocks in my opinion.
DISCLAIMER: The investments discussed are held in client accounts as of November 30, 2013. These investments may or may not be currently held in client accounts. The reader should not assume that any investments identified were or will be profitable or that any investment recommendations or investment decisions we make in the future will be profitable. Past performance is no guarantee of future results.