Exiting PDLI position
We purchased a position in PDL Biopharma just over one year ago when quarterly results temporarily depressed the share price. At the price purchased, the shares were yielding over 12%. Now, one year later, the price has rebounded about 30%. Thus our annual return on this investment is over 40%. The outlook for the company is still cloudy as revenue from current royalty rights begin to expire in 2014. We think it is unlikely that we can achieve the same rate of return for the coming year and are thus selling before Thursday’s earnings release.