TRIMMING & SWITCHING

CNTF for HRAY

Sold half of my CNTF (15.75) this morning. It has gone up for more than 40% in less than a week, and discipline requires that I take some off the table. I still hold half of my position open and I will let it run a bit from here. I replaced CNTF with HRAY (9.5). This one will be a sleeper as volume is very small. It has a modest growth profile, but rather cheap here, trading at less than 10X of 2006E. There is a lot of concerns about competitive environment in this space, but I believe such deep discount appears unwarranted.

CMED

Sold my CMED on panic (36.15), how embarrassing and how amateurish! But it is running way too fast and furious and valuation starts looking stretched (more than 30X of 06EPS). I guess it’s never wrong to take profit. I also sold my entire position of ELOS (40) as it has lost some of its momentum. I still like this company and may buy it back on weakness.