So today I switched from cautious to bullish on this stock. You may recall I saw strong selling pressure the last few days but today it showed alot of strength around $41.50 with large volume buys coming in. After reviewing the Wyeth report I am also very encouraged.
1) These companies have a very impressive ability for cost cutting and making their operations leaner. Not worried about it meeting and likely exceeding its estimates
2) The market sentiment switched this afternoon to cautious as the runnup has been VERY solid and there is a shift back to safer assets
3) I am not worried about underlying fundumentals - Very encouraged by their very solid entry into the cardiac stent business (which is high margin) - Humira is gaining more indications and I only see it gaining share from Infliximab
4) Pharma/Biopharm had a 20% premium in fear market and now has a 20% penalty in growth seeking market. Therefore $60 was overvalued, $40 is undervalued...it is on its way back to $50 and fear and growth are coming back in balance.
Because of all this I dived back in today at $41.50. Technical chart not encouraging but that means nothing if you plan on holding at least a month.
Your "1 month estimate" seems to have been relatively accurate. However, any further positive movement will hinge upon A) second-half '09 results, and B) Government sturm und drang, re: "reform."
The lows for 2009 have likely been seen for ABT -- as well as the highs, unfortunately. Undoubtably rangebound for the remainder of the year ( $42 to $49 ), unless the market truly takes off, and "all boats" rise in sympathy.
Bought today at $41.30, valuations are too attractive to ignore here...any further stress on the stock is technical and short-term and will encounter a sharp reversal due to underlying fundumentals. It is like people who were selling their IBM stock for $70 in March...stock now trading at $105....
The underlying growth story is very intact. Population is aging, pipeline is one of strongest around, stent business booming...
Hard to catch the exact bottom but when you feel you are likely 5% from the next years bottom and 20% from the next years high it time to buy.
My conservative targets: 1 month: $45 3 month: $48 1 year: $51 for a 25% 1 year return + 4% dividend
New indications for humira? Do you know the side affects and the percentage of actual benefits. I called abbot labs for that information. I believe sales were down, and the stock followed. If you read about humira, google it, you will know what you need to know
End of day runnup was nice... tomorrow will likely open around $41.60 and may have morning drop to $41.20-$41.50 as final frustrated holders let go of the shares, will pick up some more at those levels.