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Celgene Corporation Message Board

  • rob_cos rob_cos Jan 16, 2013 8:34 AM Flag

    "Generalst still see significant upside from here,the next BIIB (type move)?" ISI

    See the biotech comments below

    ISI INTERNATIONAL STRATEGY & INVESTMENT
    Healthcare Trading - January 16, 2013

    **
    Most Active Flows Yesterday
    ABBV, ABT, AMGN, BIIB, CELG, HCA, ITMN, ONXX RAD, UHS, UNH, WLP

    Thoughts
    US futures slightly lower as European stocks down for the fifth consecutive session following World Bank's global growth downgrade, commentary from finance ministers on Euro weighing on the region's economy and as investors prepare for key bank earnings this morning from GS, JPM and EBAY after the close. Our options desk has seen a lot of portfolio hedges past couple sessions buying Feb/March protection ahead of debt ceiling negotiations - likely taking advantage of the complacency currently being priced into the market ahead of the overhang. Conversely, the economic data offsets to the overhang continue to be strong with our Homebuilders survey rising yesterday to 61.9 from 57.8, its highest level since Aug 2005 while a number of our other surveys came in strong.

    Healthcare took a breather yesterday (S5HLTH -0.2% vs SPX +0.1%) weighed down by rotation/profit taking in Large-Cap Biotech and Pharma while Hospitals continued its momentum higher and select Smid-Cap Biotechs also showed strength and investors prepare for UNH/GE earnings next two days.

    Biotech - we've seen stock selection in Large-Caps to start the year - CELG momentum continued yesterday post competitor upgrade as generalists pile in post 2017 guidance last week and ahead of full Abraxane data and MM-020 - many generalists pointing to achievable guidance given no repo assumption and still significant upside from here - the next BIIB?. Money flows to CELG/GILD have been at the expense of AMGN due possibly to lack of near-term catalysts and BIIB ahead of BG-12 launch assumptions. Equity raises in Smid-Cap names have been well received thus far with ITMN/ALNY both trading above pricing pre-mkt and expect ONXX demand will be similar (we were active two ways yesterday for multiple players.

    Hospitals are clearly setting themselves apart as a group to own this year. Many generalists/mutual funds we've spoken to have been hoping for a bit of consolidation here to revisit or add and thought may get it from debt ceiling negotiations but now feel like they've missed it. HMA was a bullish sign Tuesday as sloppy quarter and early weakness was met with demand and group rallied rest of the session and continued yesterday. We were 3:1 better to buy yesterday and most active in UHS - while the near-term overhang to budget negotiations/more cuts is well vetted and certainly a pause for concern, many investors are looking past this to volume tailwind in 2014, strong flu season, possible uptick in utilization, valuation and setup as group is still vastly underowned by institutional community. Additionally, it seems the RXH index as and HCA are technically breaking out here.

    Managed Care continues to be source of funds ahead of UNH tomorrow and lack of visibility this year on pricing/exchanges, etc. Although some HMO bulls have pointed to potential goldilocks scenario where employers choose not to dump employees into exchanges for 2014 which could be good for both Providers and HMOs.

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    • ISI trading desk coms that generalist funds are piling into CELG--that there's "STILL SIGNIFICANT UPSIDE FROM HERE-THE NEXT BIIB" are most important comments to come out of Wall St since JPM.....


      Even more than all the upgrades/target raises from the sell side - the analysts - which of course is important BUT WHAT THE "BUY SIDE" (THE INSTITUTIONS THAT HAVE THE BILLIONS AND ARE LOADING CELG WITH REAL MONEY NOW IN THE HIGH 90'S) SAYS IS INFINITELY MORE IMPORTANT. Do not underestimate the importance of the ISI TRADING DESK comments previously posted....

      Here they are again:

      Biotech - we've seen stock selection in Large-Caps to start the year - CELG momentum continued yesterday post competitor upgrade as generalists pile in post 2017 guidance last week and ahead of full Abraxane data and MM-020 - many generalists pointing to achievable guidance given no repo assumption and still significant upside from here - the next BIIB?. Money flows to CELG/GILD have been at the expense of AMGN due possibly to lack of near-term catalysts and BIIB ahead of BG-12 launch assumptions. Equity raises in Smid-Cap names have been well received thus far with ITMN/ALNY both trading above pricing pre-mkt and expect ONXX demand will be similar (we were active two ways yesterday for multiple players.

 
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