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Vertex Pharmaceuticals Incorporated Message Board

  • JP_Canada JP_Canada Jun 3, 1999 3:01 PM Flag

    Trader Jim

    Good call on VRTX downside. What do your charts tell you these days? What do you think VRTX would have to move up to for you to be convinced we are entering a positive upswing?

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    • . . . in response to my enquiry re time of earnings release. I must have psychic powers. My in-tuning with the cosmos now tells me that exciting things are happening at VRTX.

    • <EOM>

    • bloomberg tv had Merrill's biotech analyst calling VRTX "the last biotech value", comparing it to an early AMGN and IMNX, but with a better pipeline.

    • [a bit belated] for the rundown on Biotime. I own a bit of it; might buy more. Cheers.

    • Go back and check that post (I couldn't see which
      one you meant) and I'm sure you will find it is from
      a diferent poster alias name.

      BTX (BioTime)
      is a very small company that has recently launched
      its first FDA approved product, a plasma expander
      that is used instead of blood, albumin, or Ringers for
      large blood-loss surgery (hypovolemia). It is
      manufactured and sold thru Abbott Labs.

      They have an
      excellent track record of leveraging very well, spending
      next to nothing to get this product developed in less
      than a year and approved in 6 months. Income will be
      in the form of royalties - very high margin
      business, and this allows BioTime to avoid having to build
      manufacturing or sales capabilities. A very clean, streamlined
      business model.

      It will be a few quarters for this
      product to ramp up to full volume, so I don't expect a
      lot of stock price movement for a few months to a
      year. However, there is a tremendous short position
      (30% or so of the float) that was built up from a few
      years ago by some large hedge funds that routinely
      short small biotechs, back when they thought BioTime
      would never successfully develop and/or get the product
      approved. This turned out to be an error, but now the
      trading volume is so thin that they can't get out of
      their short gracefully without blowing up the stock
      price. The stock is very heavily
      manipulated.

      They have been slowly building up a "boxed short"
      position to conceal their covering activity and to avoid
      putting buying pressure on the stock (re-loaning the long
      shares to allow retail traders to continue to short the
      stock). Once the box is complete, they will close their
      position, and a massive short squeeze will occur (leaving
      retail shorts holding the bag). This may result in a
      massive spike in the price sometime over the next few
      weeks or months (it may not however).

      Needless
      to say, it's a speculative position, and not for the
      faint of heart. Long term the fundamentals look very
      good to me however, which is why I feel pretty
      confident in this position.

    • Check out TPADQ, due for a big jump this morning....

    • Thanks for your response and your list. Most of
      your positions are in stocks already quite successful,
      with exception perhaps of BTX. What especially do you
      like about it? There was a post on the GILD board by
      "Trader Jim" who said he was getting out of the stock
      [not the company] and moving to something else. I was
      curious to know if you were he.

    • I have a friend who works for a company that
      tracks prescriptions. He told me that Agenerase sales
      have been disappointing. The PI market is still being
      led by Agouron and Merck. Agenerase has amounted to
      nothing.

      With disappointing sales, isn't the stock at risk of
      going even lower?

    • Most drug detailers and pharmacists will have a pretty good idea of sales volume. ANyone out their in either of these professions?

    • Thanks, but it's really still way to early to
      declare victory at 19.5. The jump up in the last day or
      two is encouraging, but a move down by the same
      amount could occur anytime just as easily.

      VRTX,
      being still in very early phases on most of the drugs
      in development, will likely have two or three more
      years of high volatility, and is more likely to be a
      trading-range type of stock during that time than a trending
      stock. Thats just the way things are for development
      stage companys.

      My guess is that over the next
      few months it will trade between 30+ and 20-, then
      when resistance at 30+ is finally broken sometime, it
      should trade between 30 and 50 (or at least
      40).

      If you look at a five year chart, VRTX had a general
      uptrend channel from 1994 through Jan 1997, then has been
      in a general downtrend channel from Jan 1997 through
      now. Trends tend to continue, so for now we have to
      expect little upside until the downtrend channel is
      clearly broken. A move above 28 or 29, ideally also above
      30, would signal a break of the current multi-year
      downtrend channel.

      One has to either be a very long
      term, buy and hold type of investor, or else you have
      to take advantage of the tendency NOT to trend well
      if you are a shorter term trader. High volatility
      allows one to take advantage of option writing, trading
      spreads or short puts or calls at logical support or
      resistance levels (that's mostly what I do). On high
      volatility stocks, this can return 50 to 100% per year
      return on the underlying stock per year, even if the
      stock goes nowhere in the net during that time.

 
VRTX
64.39+1.14(+1.80%)Apr 16 4:00 PMEDT

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