Sunday, July 23, 2006

Investing cash from Serologicals

Last week I received cash for my Serologicals (Hit #92) shares. I will be reinvesting the cash this coming week. I have picked a) Centene (CNC) and b) Connetics (CNCT).

Centene has pulled back sharply due to bad earnings news recently. The company's financial position is in good shape, and it will become a takeover target for a larger player down the road. I had mentioned Centene in an earlier post on Pacificare (Hit #52). I have made investments in this sector regularly, as and when someone came out with disappointing news. The performance of those stocks have been anything but disappointing. The other holdings include Molina Healthcare (MOH), HealthNet (HNT), Amerigroup (AGP), Humana (HUM), Wellcare (WCG) and HealthSpring (HS), of which HealthSpring is the only one that still remains an attractive buy.
Aetna (AET), with its recent earning shortfall, also has pulled back and is moderately attractive.

Connetics concentrates on dermatology products. The stock took a beating after the company lowered its guidance 2 weeks ago. This is not a short-term play, as there is no visible catalyst to move the stock in the near future, though a bigger pharma partner may take it out anytime.


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