Where does BSX go from here?.. Is this just a rest in the upward trend? Or the start of a slide to it's lower levels? Opinions.
Is this a result of the cardiologists meetings being held?
A nice tight little review here, for which all should thank VisionTS.
I had attempted to put all of this into context re: BXS already, but to re-cap: BSX invested heavily in early '97 in Japan before Yen weakened (expensive); BSX will attempt to sell much in Japan in Q1 1998 (with unfortunate earnings and demand implications, but less expensive current capital costs for the quarter); BSX does much other business in Europe and Asia (demand and exchange tough).
Does anyone see that this will actually help their earnings? And, if so, how?
The Currency Issue:
If you export to Japan from the US, now it is more expensive to the Japanese to buy the US products when the $ is trong & the Yen is weak. If you make investment, such as buying real estate, factories in Japan now, it is realatively cheaper in $ terms.
But when you report your earning from Japanese to $, it works against you. Anyway, it is usually bad for export if $ is strong because it makes US goods more expensive in foreign currencies, but when you convert your profits to $, you less than if the $ is weaker.
Although I would agree that moving into Asia over the past 6 months would have been shrewd (many brokers I know are doing
just that), BSX and its subsidiaries actually moved into Japan before and during the Fall, 1997 crisis. You can check the Annual
report. This means that they invested in Japan when it was more expensive in a relative sense to do business there, and that their
return has yet to come home to roost. If you think my posts so far imply long term troubles, you did not read very carefully. The
discussion now is, as it has always been, current stock valuation. It's too high! Maybe it can go higher, but not because of common
economic sense. Stocks now move of liquidity and stock demand. This past quarter bodes a rough one!
Good Luck, Drew
The dollar is at a 6 or 7 yr high against the yen and probably going to go higher before it gets lower. Not only would this be the best time to take a trip to Japan but to bring home as many souvenirs as possible like one of those Fujitsu Big Screen Plasma HDTV's I saw at a home show recently or a better yet, a sales and distribution infrastructure.
Although I do not own BSX (and am actually long AVEI), I disagree with you on this particular point in your post. This is the perfect time for any US company whose aim is to increase its international presence to do so. When the dollar goes down you will have your increase sales from Japan augmented by currency translation back from (strong) yen to (relatively weak) dollars.
You may look back on this time and view BSX management as a bunch of crazy foxes.
Vision has a good point on brokerage comments. Yahoo "research" lists a one penny uptick in quarterly EPS estimates for the stock as of about 1PM today. And the Japan thing is key.
On a not so related point, will anyone comment on the legality of
broker/share owners commenting positively or negatively on stock. Even if they don't sell/buy, is this not a conflict of interest? And if they sell/buy contrary to comments, is this not a breach of fiduciary duty and therefore unlawful under several areas of tort and agency law?
If you are making over 40%, sell it. I lost my paper gain last time on this stock. I sold 2/3 of my position. I checked with my brokers & freinds, there is no real reason for it to be up like this. There may be a positive comment from one analyst.
Sometimes, the investment bankers have a position of a stock & make good commment about the stock, then sell their holdings.
Japan will not add to their profits. The Yen has been downgraded by Moody. The whole economy is on the verge of callapse.
Insiderbsx wisely urges caution. Many on this biard wonder what's up with this stock. It is a fine company and, well, it shot up Friday, April 3, probably on rumors related to medinol. But the problems appear myriad in looking at the Annual report. I see three:
1) The company is moving great guns to hire folks in --- Japan??? Yes, Japan. And more and more sales, proportionately, come from abroad. With a dollar soaring, how's that for timing?
2) The company sued to enjoin Ethicon (J&J) from enforcing two patent infringement judgements against the company. The rub here is that reality takes a back seat to market power. J&J dwarfs BSX.
3) AVE is growing very fast. Again, market power or the perception of it hits hard.
One ought to wonder if SCIMed might actually lose market share in the next couple of quarters.