You do not own this stock as a bet on the refining sector. You own it for its dividend stream - particularly in tax-deferred accounts. For over three weeks at the beginning of this year, you could accumulate it in the 22 area - or as low as 18.66 if your timing was impeccable. If you bought it at an average price of 22, you would have a stock which is paying over 10% in dividends and which has appreciated another 19%. Over the same timeframe, CVX and XOM - often cited as a safe source of dividends - are down 8 - 12%. And, since the beginning of the year, the Dow Jones Utility Index - another obvious source of dividends - is down almost 11%. If you were buying the stock for the right reason, it has performed brilliantly. You might as well compare it to AAPL or FB as to VLO - all equally meaningless.
Bloomberg still misunderstands the dynamics of the disease in the U.S. They are still taking the number of diagnosed HCV patients, subtracting the number treated, and using the remainder as the assumed target population. They overlook the fact that we are in the midst of an epidemic of heroin use, which has greatly increased the rate of infection. And most of these are younger people who do not even realize that they are infected.
Having seen this raider work in the past, I would suggest that unless he can drive the stock a lot lower, he's in trouble. His technique seems to consist of accumulating a short position while simultaneously accumulating a smaller long position. His wolfpack, having been alerted by his newsletter, is ready to go along for the ride. He then announces his short position publicly and throws his long position into the market, which drives the price down and panics the retail investors. Meanwhile, his wolfpack is shorting into the weakness. He has paid for his short profit bybselling his long position at a loss. I think that if he can't drop it substantially more than this, he will be hung out to dry.
Not necessarily so. Unfortunately, the only people who HAVE to buy on a day like this are the shorts -- and there are obviously too few of them to squeeze. No large institution runs into an upside earnings report with fistfuls of cash. I have bought shares here between 115.40 and 116. This should continue to trend up in future sessions.
Unquestionably the best defensive play in pharma to this point. From its high on 3/20, the IBB is down 8.2% as of today. GILD is up 2.2%. As for the other large biotechs: AMGN - 7%. CELG -14.7%. BIIB - 19.6%. REGN - 5%. VRTX - 8.6%. ICPY - 17.2%.
Among the larger stocks I hold (or held), only INCY has been relatively stable (down less than 1%). Most of the early stage biotechs have been clobbered, with the exception of HZNP (+24.7%) and DBVT (+5.2%). The first of these is an Irish company and the second a French company.
Well, look at it as a secondary priced at 12.25. It may not get all the way up there right away, but it should move closer to 12 than 10, I believe.
I think the selling here is on the part of the retail speculators who had their heart set on a $20 buyout. Nevertheless, this deal adds value to the company, I think. Let's see where it opens in the morning.
Terrible news. At this rate, they may not be able to pay off all their debt in 2015. Although, on the plus side, the recent weakness has lowered the p/e to a fairly reasonable 4.3.
Frankly, I think the amount of money one has is irrelevant here. If you have $5,000 and lose $500 of it, it's as painful as losing $500,000 of your $5,000,000. Besides, you cannot possibly have any idea of how much money I have. And it would be literally impossible for GILD to have an earnings miss on the scale of BIIB's miss.
I had the idea that the share price would be dragged down by that huge clump of May options, so that even if earnings were good, there was no point buying this until after expiration. When this moved above 105 after earnings, I thought it would hang around 107.50 to sell the 110's.(It did briefly - by not holding a position into earnings, I missed the opportunity to take a nice profit.) But watching it get sucked down to 105 last Friday by a relatively small number of calls, I began to have doubts. If it can't get substantially above 105 by next Tuesday, I think that in the absence of news, this may end up at 100 on next Friday. Which still doesn't mean that Stan's June puts will finish in the money. I will probably add some shares on the week of May 18. Meanwhile, despite all the handwringing, GILD has survived an almost 10% drop in the IBB since March 20 relatively unscathed.
JNJ is buying 18 million shares @ $12.25. It seems to me like the opportunity to buy shares from disappointed longs at 10 - 10.40 is attractive. I think this may open closer to JNJ's price tomorrow.
Wasn't Rasmussen the pollster who predicted a big win for Romney? I'd say that demographics is not his strong suit.
I sold my last shares of GILD slightly above 100. My theory - and theories are always dangerous - was that it was transitioning from a growth stock to a value stock and that it would take a few months to find new sponsorship, probably sinking to the mid-90's in the interim. I had a vague plan that I would buy back some shares in June, but that it would never again be a major part of my portfolio. Now that the stock has run up above 120 and subsequently sold off quite a bit, it's interesting to look at exactly where the biotechs have been going during recent months.
The IBB made an interim high of 375 on 3/20. It only bounced above that level on 6/22-23, one day ahead of GILD making a high of 123.37. The IBB closed at 372.80 Friday, suggesting that the biotech market has been basically flat for the past 3 1/2 months; but the reality is much different: Since 3/20, 4 of the 6 major components of the IBB have dropped rather sharply: Amgen is - 10.7%, CELG - 8.3%, BIIB -19.4%, and VRTX -10%. REGN, thanks to recent strength, is +7%. And GILD, despite the recent selloff, is still +10.7%.
Apparently, the strong cash flow of GILD made it much more attractive than the other major biotechs.
This begs the question, ..If the IBB is basically flat since 3/20 and the major components have been weak, is it being supported by strong returns from the smaller companies? Probably. At 3/20, I only had stakes in two larger biotechs, MDVN and INCY. MDVN is off 22% since then. Fortunately, I listened to the Credit-Suisse analyst and sold out when it was only off 12%. I still have INCY, which is +9.4% since 3/20. Among the 16 smaller biotechs I hold, 8 are up and 8 are down. The strongest of these have been HZNP (+53%) and DBVT (+47%) and the weakest IRWD (-32.7%) and OTIC (-40%). Obviously, if one had made a large bet on one of the winners here, returns could have been wonderful..However, my point is that in terms of the major biotechs, GILD has been the winner.
That was an orchestrated short raid - they threw a lot of shares in at the open and took out all the buy orders and then held it down. I also bought my first position yesterday - they have to buy those shares back eventually - but I don't expect it to rebound that quickly. As we see today, the shortsellers are buying into the rally and then selling shares to discourage you. They will pin it and churn it here around 65.50 and cover a bit of their position in the process. Should be back to 70 before Christmas, though. Folks may not need diamond bracelets from Tiffany, but everyone needs underwear and socks. That would be a 7% gain, plus the 2.5% dividend, which would be fine by me. I would also note that any stock which Cramer pumps garners a contingent of retail investors who are skittish and prime targets for this kind of shenanigan.
The possibility of an acquisition by JNJ or MDVN might also be considered. This company is not expensive.
Excellent analysis. Instead of anticipating a quick double on a buyout - which I don't think was realistic, given the multitude of HepC players - we now have the prospect of a longer term play. Fine by me.
Useful objective analysis. I own both ZSPH and RLYP, but am relatively overweight RLYP. I am thinking of readjusting the balance here.
What you say is generally true. Particularly when a large number of options are about to expire near a popular strike, they will tend to get dragged toward that price. This doesn't require manipulation on the part of the MM's. The options holders themselves create this phenomenon as they try to take their profits. (The knowledgeable ones usually having already taken their profits well in advance of the expiration.) However, in the case of EXEL, this effect should be slight. The only substantial options position, the 3.50 calls, represents less than 1% of the float. Meanwhile, 25% of the float is short. If the stock were to gain some upwards momentum, I think, the washing out of the short position would more than offset the "max pain" effect.
I'd say there is a large shortseller here. They were not content to let the stock settle @ 34.25, which it seemed to want, but dunked it below 34 one last time. Obviously, the fact that AAL seemed to find a bottom at 40 is worrisome for the shorts. AAL and LUV both released their PRASM, traffic, and capacity numbers, and if you do the arithmetic, you'll see that they're still going to make a lot of money.