The market’s rally appears to have run out of steam in January, as stocks needed to pause and collect themselves after the recent run up. This was certainly true of the Select Portfolio where our two largest winners (ESTE and AQMS) gave back some of their gains.
At Tailwinds, we measure performance of each position, from inception, without weighting each stock or annualizing returns. As such, when a new name is added to the list, or one removed, the overall performance will change…sometimes dramatically.
This was the case in January where, by adding iBio to the Select Portfolio, the overall to-date returns were negatively impacted by 25%. Add in the consolidation in two of our stocks, and the portfolio as a group now shows only 9% returns on average. This, however, is not how we would recommend you judge our performance as we are longer term, catalyst driven investors.
When taking a longer term view of the stocks in our portfolio, we can diminish the effects of new additions or simply market corrections. Having been around for less than 6 months, the track record is short, but it’s getting more substantive on a daily basis. And, the longer term returns are reflective of our approach to getting involved in companies at the right time, before catalysts.
Looking at the 3 month performance of our recommendations, the average return is 16%. We hope to build upon this longer term performance and will be able to start showing 6 month numbers for our first recommendations during Q1 2017.
Now for an update on the individual companies:
Aqua Metals (AQMS): the shares, as mentioned, suffered a pullback from the recent runs. It is our belief that AQMS is suffering from a quiet period prior to earnings. However, the company has just entered production and is on the verge of revamping a $22 billion industry. Do not let short term hiccups in the shares bother you. In our opinion, they are a buying opportunity.
biOasis (BTI.V): similar to AQMS, suffering from a lack of news. However, the CEO has indicated that new partnerships should be signed here in the next couple months. That would be the catalyst these undervalued shares need to move back to their highs.
Earthstone Energy (ESTE): this company is poised to produce as many as 20,000 barrels of oil per day by year-end. This is double the street’s estimates. It will move with the price of oil on any given day or week, but should outperform over time.
iBio, Inc (IBIO): new to the portfolio, expect to see iBio achieve several significant catalysts here in Qs 1 and 2. This starts almost immediately with the financial awards for a lawsuit the company won, which should be announced imminently.