Full Disclosure Finance

By Andrew

Its been a while since my last stock purchase update, so I wanted to bring everyone up to speed on my current holdings. I’ll state the number of shares, the purchase price of the stock, and a brief justification for the purchase.

1. 50 shares of Research in Motion (RIMM) @ $87.03

This holding was actually a gift I recieved at Christmas this year (thanks Grandma!!). I took control of the shares in my TradeKing account on January 17th, 2008. The $87.03 per share was the price at the close on the 17th, which is kind of arbitrary since the stock was a gift and technically is 100% profit. I’m still not completely sure how I handle this stock for tax purposes if I were to sell.

The Waterloo, ON based company sells the wildely popular BlackBerry smartphone, which has become the industry standard mobile phone, email and internet access device for corporate North America. They are starting to gain market share in the personal-use wireless space and recently signed a deal with Alcatel-Lucent to sell the BlackBerry in China. The mobile phone market in China is enormous and RIM has the potential to eat up a boatload of that market share once the BlackBerry starts shipping. On a valuation basis RIM is actually pretty expensive, trading at 57 times trailing earnings. However, they have earned this rich valuation due to their rapid rate of growth. Revenues are growing at 40% year-over-year and their expected 3-5 year EPS growth rate is an unbelievable 70%. The company recently announced that they expect to sign 10-15% more subscribers in the current quarter than originally expected. As long as RIM continues to exhibit strong domestic and international growth I believe that they have the potential to generate some great returns.

2. 20 shares of ConocoPhillips (COP) @ $75.35

In today’s market no portfollio is complete without some type of energy stock. ConocoPhillips is an integrated oil and gas company that operates in six different segments: Exploration and Production, Midstream, Refining and Marketing, LUKOIL Investment, Chemicals, and Emerging Businesses. They are a diversified energy company with exposure to all segments of the oil and gas industry from exploration to marketing. In addition, their exposure to natural gas helps insulate them from being tied to the price of crude oil. ConocoPhillips is very cheap on a valuation basis, trading at less than 9x trailing EPS and 7.8x forward earnings, compared to an industry average of 11x and 24x trailing and foward earnings, respectively. Even if the demand for oil slows in the US (which I have my doubts about), the worldwide demand, especially in the developing nations, is just too great not to have some type of oil and gas company in your portfollio.

3. 25 shares of Biogen Idec (BIIB) @ $60.00

Biogen Idec is a biotechnology company which engages in the development, manufacture, and commercialization of novel therapies in the areas of oncology, neurology, immunology, and cardiology. The companies comercial drugs include AVONEX and TYSABRI for the treatment of multiple sclerosis, RITUXAN for the treatment of non-Hodgkin’s lymphomas, and FUMADERM for the treatment of psoriasis. In addition, the company has a very solid pipline with 5 Phase III and 1 Phase II clinical trials for drugs under development, as well as a number of preclinical stage projects. The difference between Biogen and most other biotech companies is that Biogen is actually making money. Biogen has shown strong double diget year-over-year revenue and EPS growth and trades at a modest 22x earnings. In October, Biogen announced that it was putting itself up for sale to the highest bidder. The news sent the stock soaring nearly 20%. Two weeks later Biogen called off their search for a potential suitor saying that they didn’t generate any serious interest. In a classic market overreaction, investors pumbled the stock sending it 20% lower than where it was trading before going up for sale. This created a great entry point into an undervalued stock. Nothing had changed at Biogen Idec in the two weeks that it was up for sale but the stock was trading at a 20% discount. And with Big Pharma looking for ways to bolster their lagging piplines and activist investor Carl Icahn increasing his stake in the company, Biogen remains a potential takeover target. The stock is still trading about 10% lower than where it was at the beginning of October, and is still undervalued in my opinion.

4. 560 shares of Sandvine Corp. (SVC.TO) @ $3.53

Sandvine Corporation is a Waterloo, Ontario based company that develops and markets broadband network management equipment and solutions for broadband service providers. The Company’s network management equipment and software solutions help broadband service providers identify, monitor and apply policies on network traffic. Sandvine is a local Waterloo company that Justin and I first started following through a number of friends who work there. We’ve both owned stock since shortly after they went public and have followed it fairly closely, including going to a shareholder’s meeting. I’m planning on doing a full analysis of Sandvine in an upcoming post, so I write any more on that here. But check back soon for my Sandvine post.