Cabot Investors Conference 2013 www.cabot.net

My Favorite Investment Today

Chloe Lutts Jensen, Moderator

All Cabot Analysts

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Global X Top Guru Holdings

• “Famous managers’ most concentrated stock picks … tend to do better than (their) funds on the whole.”

—Brendan Conway (Barron’s)

• Top hedge fund positions from 13-F filings

• Assets: $3.94 million

• Equal-weighted stock holdings

• Management fee: 0.75%

• July YTD 25.9% (vs 14.4% NYSE Comp)

• Positive alpha

Robin Carpenter

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GURU Moving Alpha

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Trinity Industries (TRN)

• Max Buy Price 39.54; Min Sell Price 55.49

• Current P/E is 11.3. Dividend Yield is 1.3%

• Sales will rise 9% and EPS will climb 20% during the next 12 months

• Trinity has a huge backlog of orders for railcars

Roy Ward

Cabot Investors Conference 2013 www.cabot.net

Facebook (FB)All the Characteristics of a Big Winner

• Mass market

• No competition

• New opportunity (mobile)

• Accelerating sales

• EPS estimates, margins ramp

Michael Cintolo

Cabot Investors Conference 2013 www.cabot.net

Huge Blast Off = Accumulation

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Volatility as an Asset Class

Options are Insurance

• Geico/Allstate = Options Sellers

• Selling Volatility on a broad equity index has a positive expected return premium over time, as the seller effectively provides insurance to the buyer of volatility.

Jacob Mintz

Cabot Investors Conference 2013 www.cabot.net

• Over 20 years, the market has overpriced volatility by an average of 4.6 vol points

• Implied volatility has exceeded realized volatility 88% of the time since 1990

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The Merrill Lynch vol/arb index enters into trades that monetize the difference between implied and realized volatility.

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Current Volatility Conditions

• Vix at 13

• Realized 30 Day Volatility of SPX is 8

• A premium of 5 points

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Baidu.com (BIDU)

Paul Goodwin

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Tesla (TSLA)

Timothy Lutts

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TripAdvisor (TRIP)

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Issue• Lots of great discoveries in medicine cannot reach their targets

Tom Garrity

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Big Idea: Delivery of Medicine

• Because of medicine’s inability to rapidly cross extra-cellular matrix (ECM) into the lymphatic vasculature and capillary beds, they can't exert their therapeutic effects

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Halozyme (HALO)

Patented enzymes allow drugs currently administered intravenously (IV) to be administered subcutaneously (SC) – Increased and faster absorption– Less frequently administered– Improved efficacy of existing therapies –Modify abnormal tissue

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PartnershipsMilestones Payments plus Royalties

• Hoffmann-La Roche ($13.8 billion in 2012)

• Pfizer (Up to $570 million)

• Baxter Healthcare ($1.59 billion in 2012)

• ViroPharma Incorporated (Milestone Payments Plus 10% Royalties)

• Intrexon Corporation ($54 million Plus Royalties)

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Halozyme Proprietary • Endocrinolo

gy

• Oncology

• Dermatology

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