Purchased Myriad Genetics (MYGN):
- Leading provider of genetic testing
- Successfully owned company in the past (sold last year)
- Stock price declined nearly 40% from peak, after sale
- Anticipate widespread reimbursement for novel depression test
- Possible doubling of existing breast cancer testing market
- Growth and expanded market potential of recently acquired prenatal genetic testing company
- Potential for first-ever melanoma test approval
- Near-term and multi-year developments could propel earnings more than four times higher than this year’s results
Added to Trecora Resources (TREC):
- Specialty petrochemical and wax producer
- Completed a multi-year capital expansion program
- Anticipating management changes will lead to more profitable utilization of their assets
- Free cash flow generation should be significant with completion of plant expansion
- Monetization of non-core copper and zinc mine could generate large cash windfall
- Trading near book value
- Added to portfolio in anticipation of factors above culminating in revaluation of company
Sold Electro Scientific (ESIO):
- Supplier of laser-based micro-machining primarily for printed circuit boards & semiconductors
- Approximately two weeks after portfolio purchase in fourth quarter company announced sale to MKS Instruments for $30 cash per share – nearly double our purchase price
- Sold half position shortly after announcement
- Sold remainder of position this year
Sold First Internet Bancorp (INBK):
- Internet based Midwest commercial bank
- Successfully growing loan portfolio
- However, flattening yield curve squeezing margins
- Upside relative to alternatives decreased due to less robust earning assumptions
- Sold to generate cash for opportunities with greater upside
Trimmed Barrett Business Services (BBSI):
- Outsourced human resources provider and consultant for small and medium sized businesses
- Management executing business plan
- Stock price rose following strong Q4 results and 2019 guidance
- Consequently, forecasted upside decreased to less than portfolio average
- Proceeds used to repurchase Myriad Genetics with substantially more expected upside
Trimmed Helix Energy (HLX):
- Provide specialized well intervention vessels for offshore oil & gas industry
- Management executing business plan
- Our research identified three important contracts ending in two years
- Concerned contract renewals will be at lower prices than current contracts
- Trimmed to mitigate future risk
Trimmed Steelcase, Inc. (SCS):
- Leading office furniture designer and manufacturer
- Catalysts tied to new products, European sales team improvement and European cost reductions working
- Stock price moved up as catalysts executed
- Higher stock price led to lower upside relative to overall portfolio
- Position trimmed to create cash for companies with higher anticipated upside