Telix receives FDA approval for its prostate cancer diagnostic

The Fund rose 4.1% in December, compared to the index return of 1.7%.

Top Holdings (alphabetically)

Ciena Corp

United States

Information Technology

F45 Training Holdings Inc

United States

Consumer Discretionary

Lamb Weston Holdings Inc

United States

Consumer Staples

Lumentum

United States

Information Technology

Telix Pharmaceuticals Ltd

Australia

Health Care

Australian radiotherapy producer Telix rose 17% after receiving its long-awaited approval from the US Federal Drug Administration for its prostate cancer diagnostic product Illucix. We expect further positive news from the company’s phase 3 study of TLX-250CDX, a renal cancer diagnostic in the next few months.

US optical networking company Ciena reported pleasing quarterly results pushing the shares up 25%. Data growth is driving demand for optical networks globally. In addition, the company is benefitting from many telecom operators replacing their Huawei equipment.

US-French Fry producer Lamb Weston rose 19% after reporting strong results. The company is benefitting from price hikes for its products to offset potato price increases caused by hot weather in the USA earlier in the year which pressured margins. We expect the company will benefit from a rebound in restaurant demand as the Omicron pandemic passes.

Optical component producer Lumentum rose 19% after its major customer Ciena reported strong results, as discussed above.

US real estate company Howard Hughes rose on the back of strengthening real estate prices in the US, particularly in its key states of Texas and Las Vegas.

Australian molecular diagnostic producer Genetic Signatures rose 36% as Covid testing volumes soared in NSW and Victoria, its largest markets.

On the negative side, US Covid vaccine producer Novavax somewhat surprisingly fell 33% after receiving approval from the European Union for its vaccine. We expect a strong year ahead for the company as there are still many unvaccinated people who are concerned about RNA and viral vector vaccines who have been waiting for protein-based vaccines. The market for booster doses will also be large in 2022 although it is unclear how long boosters will be required. Israel is now offering a fourth booster shot.

US utility-scale battery management software company STEM fell 13% along with many non-profitable businesses in December however we remain encouraged by the company’s acquisition of Also Energy which will allow it to extend its software offering to utility-scale solar operators and generally improve its scale.

Japanese car producer Subaru fell on little news. We expect strong sales and margins over the next two years as Semiconductor supply issues abate, and pricing stays firm. Their newly launched EV should also help them position for the transition away from the internal combustion powertrain.