Patterson reviewed the company's operations and strong cash flow. AIPC has maintained strong revenues despite the downturn of carbohydrate consumption in the U.S. during the Atkins Diet fad and through the Durum wheat price spike in 2008. AIPC was able to maintain strong cash flow because of its ability to set prices in its retail segment to offset the rising input costs and lower consumption. AIPC is the sole provider of dry pasta to Wal-Mart in the United States.  Patterson was unable to provide revenue statistics on the Wal-Mart partnership due to AIPC's agreement with Wal-Mart. Patterson also pointed out AIPC's entrance into the organic and whole grain pasta segments. He admitted that the company was late to the game, but he feels the higher margins this segment provides will bolster profits in the future. He also discussed how the strategic value of being later to the market was the ability to correct and capitalize on mistakes by competitors. 

Following Patterson's visit, the APM class voted to add AIPC to the portfolio. We bought 400 shares at an average cost of $29.44 to the portfolio. This represents a total value of $11,776, or 1.5% of the portfolio.

Patterson received his bachelor of arts in business in 1963 and his masters in accounting in 1964 from the University of Kansas. Following his time at KU, Patterson joined Arthur Anderson and became a partner in 1976. After retiring from Arthur Anderson in 1995, Patterson served three years as the executive vice-president and CFO of Premium Standard Farms. Following his time at Premium Standard Farms, Patterson began serving on AIPC's board in 1997 and was elected as non-executive chairman of the board for AIPC in 2005. In addition to AIPC, Patterson also currently serves on the boards for Collins Industries and the Paul Mueller Company. Patterson has also served the University of Kansas as chairman of the School of Business Board of Advisors and chairman of the Accounting Advisory Council. 

by the Assistant PMs - Mike Moore, Spenser Samms and Tom John

On September 28, APM Founder and Executive Lecturer Kent McCarthy attended the class to discuss China Cord Blood Corporation (CCBC) and its competitors. Along with three members of the Jayhawk Capital Management Team, Alberto Bassetto, Portfolio Manager; Joe Onofrio, Analyst; and Michael Duvall, Analyst, McCarthy discussed the company's connection with the portfolio's largest holding,  Golden Meditech (HK:801).

CCBC's banks process newborns' umbilical cords and separate the stem cells for storage. Parents, especially in China and other Asian countries, want to store the stem cells for their children in case of a severe illness in the future, such as leukemia. The stored stem cells could be used to treat illnesses. Parents pay an upfront storage fee and then a monthly storage fee. In China, the contract lasts 18 years.

Golden Meditech used a special-purpose acquisition company (SPAC) to spin off its cord blood bank segment to Pantheon China Acquisition Corp.  Pantheon China then was merged with Pantheon Arizona, and the name of the resulting company was changed to China Cord Blood Corporation (CCBC, ticker CNDZF). Golden Meditech currently owns 46% of CCBC. The class researched China Cord Blood and its competitors. Bassetto provided names of companies partially or totally comparable to China Cord Blood that are headquartered throughout the world. The students took on the challenge of contacting companies in South Korea, Taiwan and China, communicating with IR departments and operating divisions all over the world. The students found information on each company's market size, fees charges, and plans for expansion. The APM class is going to continue valuing the competitors throughout the 4th Quarter. Investing really is dynamic!

McCarthy touched on his general thoughts on China Cord Blood Corporation and the growth potential worldwide. After researching China Cord Blood Corporation, the class voted to purchase warrants of the company. Each warrant allows its owner to purchase a share of CNDZG at $5 per share.

McCarthy started the APM class in 1993 by donating $230,000 and taught the class for several years on a full-time basis. Since 1996 McCarthy has been managing his own investment company, Jayhawk Capital Management. He is a 1980 graduate of the University of Kansas, with a degree in Business Management and Accounting with a Masters in Taxation in 1981.

	3rd Qtr Return	Year to Date	Last 4 Qtrs	3 Yr Return
SP500	15.0	17.0	-9.2	-20.9
SP600	18.3	18.1	-12.0	-14.6
NASDAQ	15.7	34.6	1.5	-6.0
APM	9.8	21.8	-13.4	4.0