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ONYX Pharmaceuticals, Inc. Message Board

bearofbleecker 458 posts  |  Last Activity: 4 hours ago Member since: Jul 27, 2000
  • There seems to be a little dissension over in IV these days. Raleigh and sr.cosa are down at the Arts & Crafts center, continuing to produce lovely charts demonstrating that GILD is about to break out. Cordari, who sold out of AAPL at 109 in January to put everything behind GILD, has been overheard at the bar of the IV Country Club muttering disparaging things about TA. A lot of his neighbors have chastised him for his intemperate remarks. Now cordari has decided to strike back by selling his 25,000 shares of GILD and his 250 LEAP contracts and going short. This will unsettle many since he is, by his own account, "never wrong". I'm sure glad I live over here in Yahoo! City, where everyone gets along.

  • bearofbleecker bearofbleecker 5 hours ago Flag

    Were you wrong Friday when you were predicting 2015 earnings in excess of $12 a share? For a high roller who deals in 50,000 share positions, you sure get spooked by a 72 cent move.

  • bearofbleecker bearofbleecker 6 hours ago Flag

    Since the company has demonstrated a willingness to support the stock at 100, I'd say your upside on that short is limited.

  • bearofbleecker bearofbleecker 6 hours ago Flag

    All of these sales were "automatic", which is to say that they were 10b5-1 sales, scheduled some time ago -- probably no later than the prior quarterly report. You should also note that under California tax code, all capital gains are taxed as ordinary income, which in the case of a well-paid executive, is around 12.3%. (There is also an AMT.) And, most importantly, the gain is recognized when the option is exercised, not when the stock is sold. Under these circumstances, it would be insane for CLDN execs not to cash in their options immediately because (1) You're going to need the money to pay the tax; and (2)If the stock were to go down after you exercised the option and you hadn't sold the stock, you could be in the unlovely position of owing taxes on a profit which you hadn't actually taken. For example, you exercise an option to buy 20,000 shares of stock @ $5 when the market value of the stock is $25. California says you have a $400,000 profit and owe them around $50,000. If the stock goes back to $5 before you sell the shares, you now have no profit, but still owe them $50,000. So, with a stock which is obviously about to make a big move one way or another, the only smart thing is to sell immediately.

  • bearofbleecker bearofbleecker 6 hours ago Flag

    I see little sign of active shorting. Looks more like selling to me. Anyway, GILD underperformed the IBB, CELG, REGN, AMGN, BIIB etc. today. I still think there is enough optimism surrounding earnings to sell the 105 calls, which should take us up to at least 103.80 before then. If you put any stock in the Goldman analysis, there is little chance of an earnings miss.

  • bearofbleecker bearofbleecker Apr 19, 2015 5:33 PM Flag

    I can't resist also noting that in 2014, after GILD had charged upward in spite of the Goldman downgrade, they placed it high on their list of "10 most overvalued stocks". By this, they evidently meant the 10 stocks which had most dramatically surpassed their Goldman price targets. The list might have been better titled "Our analysts' 10 worst calls".

  • bearofbleecker bearofbleecker Apr 19, 2015 5:29 PM Flag

    In addition to downgrading GILD immediately after the 2014 selloff ...and right before its huge rally, I remember another great Goldman call in 2014: Intermune was up for sale in August, and on 8/14/14 Goldman downgraded the stock, lowering the price target to $49. Since the stock was in the low 50's at the time and Goldman was one of the advisors on the sale, it was assumed that the offers were lower than expected and the stock dropped. Ten days later, Roche offered $74 a share for the stock.

  • bearofbleecker by bearofbleecker Apr 19, 2015 5:18 PM Flag

    The upside is obviously huge and it seems to me that the large holdings in the hands of Pfizer, Novartis, etc. limit the downside somewhat. (unless the trials are a dismal failure) Also note that the recent falloff was coincident with the March 20 peak in biotechs.

  • I was also looking over the fence at IV, seeing our old neighbors Raleightrader, Trader_Rook, Sr.Cosa, et al. and noticed the post by Rocky3 reporting on Goldman's new estimates for GILD. If you only read the carping here about negative growth and the $85 price target, you might miss the fact that Goldman is actually RAISING its 2015 estimates sharply. Specifically, they have raised their estimate of q1 Harvoni sales from $2.1bn to $3.1bn, and their 2015 estimate from $7.6bn to $9bn. Their 2015/16/17/18 eps estimates are being lifted from $8.83/$9.12/$9.84/$9.12 to $9.59/$9.59/$10.29/$9.38. Their q1 eps estimate is raised to $2.58 (vs consensus of $2.25).
    Basically, at the beginning of the year, Credit-Suisse and Goldman had their estimates roughly in line. Then, in early February, C-S raised their estimates of discounting and dropped their earnings forecast. Now Goldman is seeing what many here have predicted: a much faster ramping up of Harvoni sales. They are also forecasting the Complera launch in 2015, rather than 2016.
    I wouldn't take Goldman's $82/ I year price target all that seriously. They have been consistently wrong - most notably lowering their price target in April 2014, just before GILD made a 40 point run. Also, the forecast of tapering growth into 2017/18, like C-S's, is based on the assumption that no new revenue streams are created, which seems unlikely. Anyway, I am long at the moment and may now add to that position ahead of earnings, but prepared to take any gains early.

  • bearofbleecker bearofbleecker Apr 17, 2015 5:45 PM Flag

    In the absence of a large short position, I don't think that anything less than a spectacular earnings beat will move the stock dramatically. This would have to involve scripts well above forecast(possible) or discounting levels well below forecasts (unlikely). The large imbalance in the put/call ratio tells me that this is a stock which one should probably sell a few days before earnings and buy back a few days after earnings. If they beat substantially on earnings, the institutions don't say, "Wow! I have to buy this stock right now!" They will wait until it sells off as the retail investors cash out before adding.

  • bearofbleecker bearofbleecker Apr 17, 2015 5:17 PM Flag

    Still lost less than the other 4 major biotechs in the IBB. And, on an options expiration day, all moves tend to be exaggerated. (i.e. When a stock like this, with a lot of in-the-money calls starts to head in the wrong direction, it tends to keep going in that direction. Fortunately, there were some puts to be cashed in along the way.)

  • Reply to

    Have a nice weekend GILD @ 101.02

    by carolyn_novice Apr 17, 2015 12:56 PM
    bearofbleecker bearofbleecker Apr 17, 2015 4:17 PM Flag

    That worked. 1200 @ average of 100.84, sold half @ 101.46, kept half in the belief that this will reach 103.50 sometime before earnings. Today, once again, all five of the major biotechs did worse than the IBB itself, although GILD was down less than the others. Suggests to me that the large holders have been, in effect, shorting these stocks by selling calls.

  • bearofbleecker bearofbleecker Apr 17, 2015 3:11 PM Flag

    No, although it may be a swell investment for all I know. I owned 1,000 shares @ 16.50 in early 2013. It bounced a bit and eventually settled in at around 18, which wasn't a strong enough performance to make me add more, or a weak enough performance to make me sell. In October 2013, they had some kind of major disappointment and I sold my shares for an average of 7.40. (When I hold a stock on a premise and the premise is disproven, I get out.) This turned out not to be a mistake since later that month it dropped to 2.20. In fact, it took to almost February of this year before it reclaimed the 8 level definitively. Of course, if you'd bought it at 2.20 and held it to the present, you'd have done very well. But, as the French say, "The scorched cat fears the fire".

  • Reply to

    Have a nice weekend GILD @ 101.02

    by carolyn_novice Apr 17, 2015 12:56 PM
    bearofbleecker bearofbleecker Apr 17, 2015 1:46 PM Flag

    I think that, in spite of Carolyn's prediction, and whatever happens with the markets, this will pop a bit in the last 15 minutes. I'm going to buy some and try to sell half just before the bell.

  • bearofbleecker bearofbleecker Apr 17, 2015 1:14 PM Flag

    Undoubtedly the case. In a sense, the very large biotechs are handicapped by being seen as "too big to get bought".

  • bearofbleecker bearofbleecker Apr 16, 2015 11:28 PM Flag

    More realistically, if the stock breaks above here on earnings, all those calls will tend to drag it back down again.

  • bearofbleecker bearofbleecker Apr 16, 2015 8:10 PM Flag

    Yes, and looking at the May options, I'd say that the stock is also supported here by a heavy dose of optimism about the upcoming earnings release.

  • bearofbleecker bearofbleecker Apr 16, 2015 8:08 PM Flag

    Not really. Biotechs are about 35% of my IRA, which is certainly an overweight allocation. But running the numbers, I find that, in total, they are down 2.7% since the biotech top of 3/20. That's less than the IBB is down and a lot less than I'd be down if I had any of the large biotechs other than GILD and CELG. Since the S&P is almost exactly where it was on 3/20, I don't think a 2.7% loss is enough to offset the upside possibilities in these stocks.

  • On 3/31, I noted that the biotechs had peaked on 3/20 and that, relatively speaking, GILD had held up much better than the other large cap stocks. Revisiting those numbers today, I find that this is now even truer. The IBB has recovered most of its losses since 3/20 and is now down only about 3.5% (vs -8.42% on 3/31) GILD is now up about 1% from 3/20, which doesn't seem too inspiring ... until you look at the other large cap biotechs: CELG - 10%. AMGN - 3%. BIIB - 10.3%. REGN - 7.5%. VRTX - 5.2%. ICPT - 10.8%.
    It seems like GILD's huge cashflow (and the resultant buybacks and dividend) are shielding it from the selloff among these larger biotechs. Note that all of these stocks, with the exception of AMGN, have recovered much less than the IBB.
    I own none of the above companies, but am still pretty heavily invested in biotechs. With the exception of INCY and MDVN, these are mostly smaller cap stocks. Of the 16 I hold, 11 are down since 3/20, 4 are up, and 1 is even. By far the best performer among these has been HZNP, a stock which was pointed out to me by a poster on this board as worth a look. The weakest has been ZSPH (down over 20% since 3/20), which I own as a hedge against a larger position in RLYP. Given the increased risk in these smaller cap stocks, it's surprising that they seem to be actually performing better, as a group, than the large caps. So far.

  • Reply to

    Earning Report on 15th,

    by mike500100us Apr 13, 2015 1:50 PM
    bearofbleecker bearofbleecker Apr 14, 2015 12:11 PM Flag

    Time to stop using these stocks as proxies for oil. Earnings will be strong and forecasts even stronger.

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