Submitted by
Covestor
as part of our
contributors
program
By: Robert Freedland
Before commenting on the month of October in the Healthcare
model on Covestor, let me wish all of my friends affected by the
disastrous Hurricane Sandy a speedy recovery. Times like these
force us to examine our priorities and sometimes our investment
performance isn't as significant as the welfare of our own families
and friends.
The month of October was a difficult month for the Healthcare
model, except for Schiff
(
SHF
)
which on October 30th became an acquisition target of German drug
and chemical maker Bayer AG (
BAYRY
) for $1.2 billion or $34 per share.
I spent much of the month selling off many of my holdings on
what appeared to be growing weakness in the market, the sector, and
in the individual stocks held. Align Technologies (
ALGN
) sold October 18th, Alexion (
ALXN
) was sold October 24th, Biogen Idec (
BIIB
) was sold October 31st, Express Scripts (ESRX) was sold October
19th, HMS Holdings (HMSY) was sold October 4th, and
Healthstream (HSTM) was sold October 23rd.
In addition, the Medicines Company (MDCO) was sold October 5th.
Regeneron (REGN) was purchased October 15th, and then sold
October 23rd on technical weakness. Finally, ResMed (RMD), another
long-term favorite, and a holding in my Sustained Momentum model,
was purchased October 24th, only to be sold on October 26th.
During the month, the only new holding that made it through this
correction was Davita (DVA), which was purchased October 11th.
DaVita operates a chain of kidney dialysis centers.
At the end of the month, the remaining holdings in the model
consisted of Abbott Laboratories (ABT), Amgen (AMGN), DaVita (DVA),
IDEXX Laboratories (IDXX), Lilly (LLY), Perrigo (PRGO), and Schiff
(
SHF
)
.
I shall continue to search for new opportunities to put this
growing cash position to work. However, the weakness in many of
these holdings has led me to part company. Indeed, being aware that
others besides myself may be following my lead, as is the case on
Covestor, adds an additional emphasis on avoiding losses while
looking for stocks that may offer all of us reasonable gains.
The investments discussed are held in client accounts as of
October 31, 2012. 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 that investment decisions we make
in the future will be profitable.
Certain of the information contained in this presentation is
based upon forward-looking statements, information and opinions,
including descriptions of anticipated market changes and
expectations of future activity. The manager believes that such
statements, information, and opinions are based upon reasonable
estimates and assumptions. However, forward-looking statements,
information and opinions are inherently uncertain and actual
events or results may differ materially from those reflected in
the forward-looking statements. Therefore, undue reliance should
not be placed on such forward-looking statements, information and
opinions.
Covestor Ltd. is a registered investment advisor. Covestor
licenses investment strategies from its Model Managers to
establish investment models. The commentary here is provided as
general and impersonal information and should not be construed as
recommendations or advice. Information from Model Managers and
third-party sources deemed to be reliable but not guaranteed.
Past performance is no guarantee of future results. Transaction
histories for Covestor models available upon request. Additional
important disclosures available at
http://site.covestor.com/help/disclosures. For information about
Covestor and its services, go to http://covestor.com or contact
Covestor Client Services at (866) 825-3005, x703.