Wow. GILD trades like a such a dog. The chart is about as ugly as you'll find anywhere. Sure, I know there are a few concerns and public policy headline risks, but this is a completely unfounded old fashioned drubbing. I put on a significant long position in GILD near the lows today and I see limited downside and likely a double up from here in the next biotech sentiment updraft. Thank you to management for the dividend boost and huge stock buyback - oh and the stellar revenue and earnings growth.
Sentiment: Strong Buy
Always appreciate the annual massive insider selling by Express active company management. It used to be at ESRX that you held onto your stock & options until you left the company because it was generally a good investment over time and it would be so embarrassing to see all the executives lining up to cash in right after a quarterly report where they claim the future is bright and they are more committed than ever. They are ALL sellers. Look at the transactions, and decide why you want to be on the other side of the trade with company management selling so hard.
He should be axed for lots of reasons, but squeezing biopharma on price is what his clients expect him to do. GILD also needs ESRX, the largest PBM in the US to at least keep a level playing field. Likely posturing miscalculations on both sides, but both come out fine in the end -there's just so damn much money flying around.
It looks like ESI is going to be in a difficult position being the only PBM that has excluded Sovaldi from it's national formulary. This means a lot of their clients will have to go on custom formularies to cover it or ESI will have to backtrack and add it back onto the national formulary - which they won't. Either way, the PBM that can least afford more damage to their reputation, integrity and credibility is likely about to get another heavy dose as the independence of their medical advisory function (which they claim drives formulary decisions), arrived at a completely different conclusion than every other prescription insurer with regard to the importance of covering this medication.
Decent earnings have hidden a lot of sins in St. Louis, but ESI runs a careful balancing act that's becoming increasingly more difficult.
Something is being ignored here by most investors on the ATHN balance sheet. This crazy Momentum is wildly appealing, but be careful and make sure you really know what you own. Zacks Equity Research rates this as a "Sell". Apparently the CEO is heeding this advice and has been consistently dumping shares like a demon month after month.
There are a few negative sentiment drivers in this name right now, but it's mostly uncertainty about their ability to market the latest drug themselves vs a mega pharma partner. They certainly underpriced the latest stock offering which is a secondary drag, but on the other hand they needed financing to be oversubscribed by institutions.
I am holding here with a large position around $2.50. I'm selling at $4.75 within 3 months.
All reasonable points except acquisitions, ESRX has virtually no room to consolidate in the present PBM business segment due to regulatory restictions and could only expand into adjacent markets. Unfortunately, they do not have the strategic vision, leadership or confidence to go outside the box at all. The path for this investment is in stock buybacks and a possible dividend down the road.
FY guidance revised to lower end of previous range. Does this sound like a recipe for taking the P/E from 18,000 to 21,000??? Something is wildly amiss here.
ESRX has atleast 4 qtrs of growth associated with the combination of synergies from the monster acquisition of Medco (MHS) and the substantial (and well publicized) generic pipeline. The whispers are that they are ahead of schedule for acheiving cost synergies. I would not count on any announcement of a dividend until sometime in 2013, but even the hint of one, combined with respectable earnings growth numbers, will propel the stock into the low 70's. The company is definitely good - not great, but that's about all they need to be right now to see a gradual but progressive stock run up over the next few months. I might not be a buyer right now, but I'm also not a seller until it hits 70.
Customers go wherever they are told to go. Express Scripts customers flocked to WAG when CVS was restricted in their network and now are rushing back to CVS as WAG exited their ESRX contract. It shouldn't be any suprise that while Rx customers may prefer one store over another, what they care about so much more is getting their prescriptions using their insurance benefits. My prediction is that WAG accepts a contract with ESRX b4 3/1 (maybe sooner) and both stocks get a nice big lift.
I'd love to ride the wave up to the low $60's, but sell on the news because it's going to be one of the ugliest integrations in business history.
No one really needs giant chain drug stores when you can get an Rx at every grocery store, Walmart, Costco and Sam's club. Even without CVS and WAG, there are still 50,000 drug stores in the US. The real story is that there are just too many of them. I'd also remind you that WAG was ESRX's most favored drug chain when CVS merged with Caremark a few years ago. Now it's the other way around. When it comes time for CVS to negotiate a new contract with ESRX, WAG will have great upside to get the business back and will undercut CVS's rates.
Nothing significant in these sales. All active executive management still has substantial long exposure. It would take a lot more insider selling to be meaningful.
It's the FDA that is specifically permitting the sale of compounded 17P which is what Makena is. And why would the FDA do this??? Hmm, could it be because KV was shamelessly price gouging Makena at 50x the fair price; and the FDA, AMA and just about every Association of Women's Health Specialty Physicians were afraid Women would not be able to afford this treatment and risk 1000's of preventable premature births.
Heads up...The MHS deal will get regulatory approval, and ESRX will come to reasonable terms with WAG on a new contract.
This stock run up will continue as these rumors become substantiated, but bail at $59, because there will be a wave of insider and institutional selling at $60.