My Favorite Investment Today
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Transcript of My Favorite Investment Today
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My Favorite Investment Today
Chloe Lutts Jensen, Moderator
All Cabot Analysts
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Global X Top Guru Holdings
• “Famous managers’ most concentrated stock picks … tend to do better than (their) funds on the whole.”
—Brendan Conway (Barron’s)
• Top hedge fund positions from 13-F filings
• Assets: $3.94 million
• Equal-weighted stock holdings
• Management fee: 0.75%
• July YTD 25.9% (vs 14.4% NYSE Comp)
• Positive alpha
Robin Carpenter
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GURU Moving Alpha
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Trinity Industries (TRN)
• Max Buy Price 39.54; Min Sell Price 55.49
• Current P/E is 11.3. Dividend Yield is 1.3%
• Sales will rise 9% and EPS will climb 20% during the next 12 months
• Trinity has a huge backlog of orders for railcars
Roy Ward
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Facebook (FB)All the Characteristics of a Big Winner
• Mass market
• No competition
• New opportunity (mobile)
• Accelerating sales
• EPS estimates, margins ramp
Michael Cintolo
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Huge Blast Off = Accumulation
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Volatility as an Asset Class
Options are Insurance
• Geico/Allstate = Options Sellers
• Selling Volatility on a broad equity index has a positive expected return premium over time, as the seller effectively provides insurance to the buyer of volatility.
Jacob Mintz
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• Over 20 years, the market has overpriced volatility by an average of 4.6 vol points
• Implied volatility has exceeded realized volatility 88% of the time since 1990
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The Merrill Lynch vol/arb index enters into trades that monetize the difference between implied and realized volatility.
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Current Volatility Conditions
• Vix at 13
• Realized 30 Day Volatility of SPX is 8
• A premium of 5 points
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Baidu.com (BIDU)
Paul Goodwin
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Tesla (TSLA)
Timothy Lutts
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TripAdvisor (TRIP)
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Issue• Lots of great discoveries in medicine cannot reach their targets
Tom Garrity
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Big Idea: Delivery of Medicine
• Because of medicine’s inability to rapidly cross extra-cellular matrix (ECM) into the lymphatic vasculature and capillary beds, they can't exert their therapeutic effects
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Halozyme (HALO)
Patented enzymes allow drugs currently administered intravenously (IV) to be administered subcutaneously (SC) – Increased and faster absorption– Less frequently administered– Improved efficacy of existing therapies –Modify abnormal tissue
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PartnershipsMilestones Payments plus Royalties
• Hoffmann-La Roche ($13.8 billion in 2012)
• Pfizer (Up to $570 million)
• Baxter Healthcare ($1.59 billion in 2012)
• ViroPharma Incorporated (Milestone Payments Plus 10% Royalties)
• Intrexon Corporation ($54 million Plus Royalties)
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Halozyme Proprietary • Endocrinolo
gy
• Oncology
• Dermatology
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