Wifts Investment Group

For April 2010, our portfolio returned 0.15% compared to 0.91% for the S&P500. Our portfolio underperformed the S&P500 by 0.76%.

Portfolio Movers

Ameron International (AMN) and Aceto Corp (ACET) were up 10% for the month. AMN and ACET are also the two largest holdings of the portfolio. Forest Lab (FRX) was major decliner. It went down 13% for the month mostly because the FDA advisory committee voted against their lung disease treatment. The company also posted lower earning and lowered the guidance for the year. We still like the stock because of their huge cash position.

Omega Protein (OME) dropped 6.96% for the month (actually it dropped 22% after reaching $6.89 on April 23) because of the uncertainty after the oil spill in the gulf coast.  Since Omega Protein depends on fishing  in that area, it could significantly affect their business. We will wait and see how it turns out.

LMI Aerospace (LMIA) dropped 7.1% for no apparent reason.

Transactions

April was relatively busy month for us. Here are all the transactions for the month:

Bought and Sold LGF: With our idle cash, we bought Lions Gate Entertainment (LGF) at $6.80 and sold it at $7 for a gain of 2.94%. Ichan group had a tender offer for the shares of LGF at $7. Luckily we didn’t have to wait too long for it to reach $7, and we sold it at our target price of $7.

Bought GILD at $40.4 and $39.7: Gilead Science Inc is a biopharmaceutical company that makes antiviral drugs for AIDS. It had an impressive growth in the last 20 years and it still has a better growth potential than other big pharmaceutical companies. GILD beat the expected revenue and earnings for the first quarter but the stock took a beating because they lowered the guidance for the year due to charges related to the new healthcare plan. We had been following GILD closely for a while and this gave us an excellent entry point. We started buying at $40.40 and continued buying it as it kept going lower. Our average price is $40.22. GILD is now our largest holding with 10.3% of our portfolio.

Sold INTC at $23.67 and DD at $38.93: To raise cash for GILD purchase we decided to sell INTC and DD. Although Intel has been doing well, we only had a small position and it was up 82% for us (bought it at $13). duPont was up 81% not counting almost 7% dividend we were receiving. Both INTC and DD are excellent companies and we got good returns, but we thought it was a good time to reinvest those gains in Gilead.

Cash position has decreased to 16.35% after those transactions.

Our partnership NAV for the month ending April,2010 is $11.03.

For March 2010, our portfolio returned 9.99% compared to 5.88% for the S&P500. Our portfolio outperformed the S&P500 by 4.11%. For the first quarter 2010, we were up 8.81% Vs 4.87% for S&P500. Please note that this is a total return including cash positions, so we outperformed the S&p500 with around 15-20% in cash.

OSI Pharmaceuticals was the major portfolio mover with a gain of 60.86%. Astellas Pharma Inc made a tender offer to buy all OSIP shares at $52 per share. OSIP is currently trading at $59.55, which means the market thinks Astellas will have to pay more if they want to acquire OSIP. For us, OSIP is up 106% from our purchase price of $28.90.

LMI Aerospace Inc (LMIA) was up 46.41% in March. It is up 117% for us. OME, TRID, ACET and AIR were also up significantly with a gain of 34.66%, 17.57%, 15.49% and 9.44% respectively in March. However, Ameron International was down 8.68% in March. AMN is also our largest holding with about 8.2% of our total asset invested in it. Almost all other holdings were up about 3-4%.

Transactions

Sold CTIC at $0.62: As we mentioned in our last post, the FDA had pointed out some issues with CTIC’s phase III trail of pixantrone. The independent advisory panel unanimously said the data was not adequate. FDA usually follows what the panel recommends and seems like the chances of pixantrone being approved in very slim. Therefore, we  sold CTIC at $0.62 for a loss of 49.5%. Fortunately, CTIC was a small portion of our portfolio so it didn’t have a significant impact on our portfolio. The lesson learned (again) is not to get involved in speculation!

Sold XES at $30.50: We decided to sell the SPDR Oil and Gas ETF since the price of oil is now more than $80. We do not know what the price of oil will be in the future, but the ETF was getting overvalued for our taste. We sold it at $30.5 for a long-term gain of 74% not including the dividends that we received.

Our cash position has increased to 21.74% after those two transactions. It is good to come out ahead of the market with such a large position in cash when the market is going up. The cash position will give us a good buffer when the market goes down and we will have funds to invest if we find good opportunities.

Our partnership NAV for the month ending March, 2010 is $11.02.

For the month of February, our portfolio returned -1.20% Vs a gain of 2.85% of S&P500. Our portfolio underperformed the S&P500 by 4.05%.

Bank of America was the biggest gainer with 9.75% followed by a gain of 8.18% for OSI Pharmaceuticals (OSIP). OSIP released their annual earning report which showed the revenue from Terceva, their drug for lung and pancreatic cancer, increased 21%. The revenue from DP-IV inhibitors for treatment of type II diabetes is also increasing. After a careful analysis of the report, we decided to keep holding OSIP.

Cell Therapeutics was the major drag on the portfolio. It went down 39% this month after FDA pointed out some issues of their Phase III trial of their lymphoma drug pixantrone. The independent advisory panel was supposed to meet and review the data early in the month, but due to the severe weather in Washington, it got postponed till March 22. CTIC is the most risky position we have because it is not based on the fundamentals but based on a hope that the FDA approves their drug. After the FDA issued those concerns, the stock took a big hit and at $0.60 or so, there was no point in selling. There is still a chance that it gets approved. Just because FDA pointed out issues doesn’t mean it’ll get rejected; it’s FDA’s job to point out the concerns, the cancer experts that make up the advisory panel will decide whether the drug works and whether it’s safe. We were actually considering buying more, but decided it was best not to spend more on this speculation.

Transactions

Bought VII at $5.20: Vicon Industries is a small company with a market cap of only 23 million and makes video surveillance systems. The latest quarterly report was not that good, but they had a strong balance sheet and cash flow for previous quarters and years. Since it looked cheap based on those numbers, we started buying it. 2009 was a tough year for any business so we decided to ignore one bad quarter. We will monitor their earnings in the coming quarters and adjust our expectations accordingly. VII makes up 7.4% of our portfolio.

Bought TRID at $1.50: Trident Microsystems makes integrated circuits for digital media application. Again, 2009 was a tough year for TRID. There was a huge decline in revenue and they incurred a big loss. However, it was trading below it’s net current asset value. So unless they burn through the cash within the next few quarters, it’ll be relatively safe investment. We’ll keep paying a close attention on the progress TRID makes this year. TRID makes up 5.3% of our portfolio.

Due to more contributions, our cash position stays at 17%.

Partnership NAV for the month ending February was $10.01

For the month of January, our portfolio was up 0.14% Vs a loss of 3.7% for the S&p500.  Our portfolio outperformed the S&P500 by 3.84%.

OSI Pharmaceutical Inc (OSIP) was up 10.2% and our largest holding, AMN gained 8.78%. On the other hand, Kindered Healthcare (KND) lost 8.4%, followed by Forest Lab (FRX) which lost 7.69%.

Transactions

Sold SPY and VB: S&P500 was at around 1150 on January 19th. We thought it was a little too high, so we decided to build some cash by  selling SPY and VB. SPY is a S&P500 index ETF so there was no point in holding it if we though the market was too high. We sold it at $114.55 for a gain of 18%. VB, which is Vanguard Small Cap index ETF, was up 52% for us. We sold it for $59.4. Both are long term capital gains.

With those transactions and contributions, our cash position has gone up to 17.29%.

NAV for the month ending January was $10.1422.

For the month of December, our portfolio was up 6.34% compared to 2.81% of S&P500. The portfolio outperformed the S&P500 by 3.53%.

LMIA, KND were the biggest gainers with over 24% gain. AIR was up about 23%. AMN, our largest holding,  was up 11% along with OME. December was a good month for almost all the other stocks. Only OSIP and BAC were down significantly. OSIP lost 6.84% and BAC was down 4.98%.

In our October update, we mentioned that we started a position on ACET at $5.44. It kept falling and in the beginning of the month, it was trading below $5. Therefore, we doubled our position and now the average price for ACET is $5.21. This purchase has brought our cash position down to 10%. Although we like to have a little more cash than that, we did not want to pass on ACET. It now makes up 8.92% of our portfolio. AMN is still our largest holding with 11% of our total asset.

Partnership NAV for the month ending December was $10.1277.