REGN should see some heavy EOY selling and I expect we drop at least 20% from here on out. I'm hedged if I'm wrong but today was clearly a capitulation day that all longs should be savoring.
Also, quite frankly the valuation here is absurd. And at the current market cap there's simply no one willing or able to take 'em out. Until we get more attractive I can't see this going much further w/o significant downside risk.
Good luck longs and congrats on the ride!
Sentiment: Strong Sell
I'm very curious on how you "hedged" if you are wrong with the short. Sounds like you bought a Call option just in case it continued to take off upward. A January Call at $190 would have cost you $9.70, a $195 would have cost you $7.70 and a $200 would have cost you $5.90. If you run the math and model what you expect to happen your trade makes no sense for the risk.
I don't disagree that we'll see a pull back considering the stock ran from $138 straight to $188 without taking a breath. If you read my other posts you'll see I called the last pull back correctly and expected it to bounce strongly off of $140. I now expect the stock to take another break. Unlike many people, I don't expect it over $200 by the end of December.
REGN is not the type of stock you should trade in and out of. As I've said numerous times, it has an awesome pipeline, a solid and improving balance sheet, cash flows that are only going to get stronger over the next 3-years and a management team focused on driving the long-term growth of the company. With only 110 million fully diluted shares outstanding the share count is in great position with minimal future dilution expected (some additional stock options and restricted stock will be distributed to employees).
Here is what I expect in EPS over the next few years:
2013 - $5 per share
2014 - $8 per share
2015 - $10.75 per share
2016 - $14 per share
2017 - your guess is as good as mine.....the LDL drug under study would be expected to be approved and launched in late 2016 or early 2017. It is way to early to try and project anything at this time.
The above would represent a 41% compounded 3-year growth rate. You can decide the multiple to add to these numbers. I think a $350 stock price at the end of 2016 would result in a pe of 25x which would be more than reasonable for a 41% grower. A $350 stock price would represent a double off of yesterday's closing price or a 19% 4-year compounded stock return.
I think I'll stay long as I have been for many years and continue to take my slow and steady approach.
Good luck to all!!!!!
Boy, Righteous, incredible/ you sold at the EXACT high of the day. Clearly, you are one of the johnny come lately posters on board here who is full of manure. You know how many thousands of people have claimed the stock is overbought. . . and then they scream when they have to covere their shorts. We don't need idiiots like you on board because you add ZERO to the discussion. ZERO
Your wrong on this one. Regn. next month will have a 2nd big revenue drug out and a 3rd this summer.Price will go over $200 easy by then. Maybe a December swoon, as always this time of year, brings the price to $160's, but most unlikley. Strong Stock, hold or if you can buy more. Soon by 2014/15 the company will be bought out for a very nice price. No way you will see $150 unless a crash or stk split, and thats not going to happen. Good luck to all.
Sentiment: Strong Buy
what drug are you referring to next month? zaltrap? in the US or overseas? Zaltrap in the US will NOT have a material impact on REGN's financials. Sanofi is owed significant dollar before REGN will begin sharing in the profits. I assume you are referring to Eylea in the international markets as the 3rd drug. Unlike in the US Eylea overseas will NOT scale nearly as quickly as you may think. The real impact on REGN's revenues and profits from Eylea's international sales will start to impact the financials in 2014. The grow in Eylea in the US will be a big part of the first half of 2013 story.
Slow and steady.....Good luck to all.....
While I agree about the pipeline prospects and future valuation, you would be crazy to be holding at these levels. The bull cycle is over , for now. Wash, rinse, repeat. Get back in under 150 come January like I intend to (assuming the market hasn't crashed by then).