I was feeling pretty good about selling the shares in my IRA @147 after hours yesterday, noting that it trended down to 145 or so after that. I thought I'd get a chance to buy them back at around 140 today when the short term retail investors took their profits. I'm really surprised that the earnings apparently surprised so many... and that so few seem inclined to sell into this rally. Of course, in retrospect, I should have also held onto the extra shares I bought in the 133-134 area last Friday, instead of selling them at 139.
I was adding at 35 after hours yesterday, then at 34, and finally, to my surprise, at 30.10 and 30.15, simply because I thought the haircut was too short for a ratcheting down of earnings projections while revenue and growth were strong. After listening to the cc, I feel that it is still oversold here and should recover further. Management's explanation of the lower earnings projection for 2014: They are transitioning to a new software platform. But in order to avoid "force marching" their customers onto the new platform, they will maintain the two existing platforms until the end of 2014. This will temporarily increase their costs. Eventually, the new platform, which they obviously believe is a major improvement, will replace the two existing platforms. Sounds plausible. I was also favorably impressed with the way management handled the cc. The analysts were twits.
I'm listening to the replay right now and he throws out rather parenthetically, "I'll talk to you later offline." It seems like his way of saying, "I really have better questions than the one I'm about to ask, but I don't want to show my hand to the other analysts." It's axiomatic that analysts never ask the important questions during conference calls for that very reason, but this seems childish. Now he's saying, "We'll follow up on that later." What a pompous jerk.
I'm a little bit suspicious of the way they were sitting on the bid with large lots being offered at 30.17 and 30.20. At some point tomorrow, I will add more.
Absolutely. I was only pointing out that the bulk of the earnings were milestone payments, which should have been foreseeable. But perhaps the cc will enlighten us. I'd be delighted even if we only hold today's gains, given my belief that there are too many short term investors here.
Both. In my taxable accounts, I can't afford to sell without enriching the IRS at my expense. In my IRA, I sold some towards the end of the session and the remainder into the after hours runup -- both too early, apparently. It's hard to believe that anyone would have had the temerity to be short this stock ahead of the earnings, but it looks as if some were. Nevertheless, I have a hunch I may be able to buy it back into the IRA cheaper tomorrow. Simply because I think we've attracted a lot of weak hands here.
We should note that virtually all of the income was from various milestone payments. Sales of ibrutinib in the final quarter of 2013 accounted for only $13.6 million of revenue, presumably from prescriptions for MCL. Nevertheless, these guys aren't going to need any secondary offerings. They should now have all the cash they need to run new trials.
I doubled up on last Friday, but have now sold the last of my new shares, keeping my legacy positions. My fear, obviously, is that the earnings announcement will be a nonevent.
I agree that a secondary is probably coming soon, but I don't think it will be priced substantially below where we are now. Maybe 13.25 or so. This will have the effect of holding the share price in place for a while. I will wait until then to enter. The data on the intraocular drug looks compelling to me.
Congtatulations on your two winners. I am surprised that ARII didn't run up in advance of earning given that GATX had blowout numbers and that the new safety standards for tank cars will guarantee a strong order backlog. STRT was under my radar -an auto parts supplier I never heard of, and still looking pretty cheap, I think.
Don't you think that they will play it close to the vest regarding MM and autoimune indications? It seems to me that the stronger biotechs are always cautious about getting out too far ahead of the FDA. I am not expecting any major news out of the CC. However, I think that any signs of substantial off-label use of ibrutinib in advance of the CLL approval woild bode well for its rapid adoption.
An afterthought: You will note that even the most successful of these biotech stock pickers occasionally end up holding an INFI or ARIA or VVUS. Which suggests that you need to have a portfolio of a dozen or so candidates, culling the losers and adding to the winners as you go.
Rather than suggest particular companies and be accused of talking my book, I'd suggest a methodology: Go to the 13f's of the more successful biotech investment funds and see what they're buying. Then see if you can figure out what the attraction is. I generally look for some kind of existing revenue stream, products in late stage clinical trials, a balance sheet fat enough so that they won't need to issue a secondary in the near future, management with a history of success, strong partnerships with larger pharma companies, etc. The end-of-year 13f's are just coming out now. Among the funds I'd suggest looking at are Baker Brothers Advisers, BB Biotech, Orbimed Advisors, and Perceptive Advisors. That should keep you busy for a while.
You could look at my posting history to see that I've been long this stock since May of 2012. I hold long positions in my taxable account, but often trade in and out with my IRA. At the moment, I have added shares in all my accounts and am looking to lighten up this week ahead of the CC.
According to their new 13-f, Baker Brothers Advisors, the premiere healthcare fund, is still holding 8.7 million shares of PCYC, their largest holding, constituting 13% of their portfolio. They sold 290,000 shares during the quarter, I assume to rebalance. Their second largest holding is now INCY, at 12.35% of their portfolio.
Call me a cynic, but when a stock trades up at the open for no apparent reason and then flatlines, I generally assume that they're unloading shares. Conversely, when it trades down at the open and then flatlines ,as this did today, I assume that it's under accumulation. If they give this a nudge up on Tuesday, everyone will assume that there's some good news forthcoming in the conference call, which I doubt. I will sell the shares I added today before the CC.