Keeping GILD positions in my taxable accounts, along with smaller hedging position in ABBV. Smaller GILD position in my IRA, with a much larger ABBV position. The moment ABBV gets approval, I, like everyone else, will dump it.
I think you're exactly right, even in the face of the apparent European approval for ABBV's therapy. However, by the end of the session, I think the Dec 110 calls will be dictating price action. At the moment (12:17ET), they are trending up at 95 cents. This is already a huge position with 41,132 contracts.
FBR, maintaining their 130 price target, notes total script numbers (Harvoni + Solvaldi) at 6,228, a 7% increase over the prior week. Harvoni scripts 2,954, a 21% increase. They also note that for 4 out of the 5 days last week, the AASLD (Liver Disease) conference was under way and presumably many hepatologists were out of their offices and not writing prescriptions.
This calls to mind the ancient joke about the kid who is given two $10 bills by his mother and told to pick up her regular $20 prescription at the pharmacy. The kid, who has a larcenous steak, pockets one of the bills and folds the other one up. He passes the folded bill to the pharmacist, snatches the bottle of pills and runs for the door. When the pharmacist realizes that he only has $10, he calls out, "Don't run, kid - I still made nine bucks!"
Looking at your past posts, you also seem to have your life savings in GSAT. And while you have been pouring your lfe's blood into GILD, you seem to have been foreseeing a breakdown into the 90's. And imaging wonderful things for ABBV. It's one thing to be a liar, but sadder yet to be a clumsy liar.
Cramer was leading the Ebola hysteria. I suppose I should thank him, since it enabled me to take a large position at bargain prices. He seems to be ranting and raving more than ever, totally dominating what he has made a farcial program, with the more intelligent commentators flattering him and deferring to him.
If we go there, we will hit a lot of stops, I think. Be careful what you wish for.
If you think that the drop in this stock is due to the pipsqueaks on Stocktwits and Twitter, you are mistaken, I think. The retail investor, as clearly evidenced here, is overwhelmingly positive on this stock. The stock is going down in the face of boosted price targets, strong scripts, and a lot of positive PR.
I am long this stock, but I think that something real is going on here. We had a strong base at 110 before earnings, which, if I recall correctly, went up close to 114. After very strong earnings, and a brief sell-on-the-news falloff, it made a new alltime high at 116.83. However, during the first half of November, the stock has dropped about 12%, even while the scripts for the Harvoni intro have been very strong. It might be argued that the IBB has fallen about 3% during this time; however, since GILD is about 8.5% of the IBB, this is inevitable. Meanwhile, ABBV has advanced about 4%. Every day, we begin with a little false rally, after which the stock is sold off. To me, this looks like disciplined selling by large holders. Outside of my IRA, I am locked into my GILD positions by tax considerations. But I have hedged those positions with ABBV, and in my IRA, I have cut my GILD position by 80% and taken a larger hedging position in ABBV. I am familiar with all of the arguments about low p/e, superior HepC drug profile, promising pipeline, etc. But with GILD representing about 15% of my portfolio, I was overexposed to this stock. Now, at about 8%, with a hedge in place and buy orders in below 100, I am worrying less.
13f reports, which detail the holdings of hedge funds, mutual funds, etc are filed a month and a half after the end of the quarter. (i.e. holdings as of 9/30 are being reported now at 11/15). If you Google, for example, "Baker Brothers 13f", you will be directed to a site which will detail all of their holdings and, more significantly, the change in their holdings from the previous quarter.
According to their just-released 13f for the third quarter, Orbimed Advisors, one of the premier biotech funds, added 3,000,000 shares of IRWD during that period, bringing their holdings to 12,000,000 shares. In the interest of accuracy, Baker Brothers, perhaps the top biotech fund, cut their holdings by 100,000 shares to 346,000 shares.
According to their just-released 13F for the period ending 9/30, Baker Brothers Advisors, whom I consider the premier biotech fund, has taken a major stake in AVNR. They added 20,974,677 shares during the period, making the 9'th largest holding in their portfolio. This was, by far, their largest new position. They also bought a call representing an additional 9,356,200 shares, which, in itself, is the 11'th largest position in their portfolio.
To expand on the paradox, since Oct. 21, ABBV's closing price has moved up from 56.29 to 64, an increase of 13.7%. During that same time frame, GILD has dropped by roughly 4%. Yet this apparent momentum for ABBV is not reflected in an options premium. By hedging my GILD with ABBV, am I going for a huge headfake?
I noticed the same thing and hoped that perhaps an options guru could explain it. I always assume that options, for the most part, are bought by retail investors and sold by the large holders. Nevertheless, the market is pricing in an approval for ABBV's HepC combo which will negatively impact GILD. Yet the options market seems oblivious and is not pricing in any kind of runup for ABBV over the next week.
Thanks again, bagholder. This is interesting stuff. Analgous to the supermarkets who make much of their profit via providing displays and ad features to manufacturers in exchange for "allowances". There is probably more incentive for a supermarket to get a case allowance on Coca Cola than on Doctor Pepper.
Agree completely. In the long run, ABBV is not a serious competitor to GILD. However, if they break GILD below 100, how low do you think it will go? My first buy order is now in at 97.50.
Yes, but note ABBV up slightly here. There is a short/long trade going on here. When I saw them but the brakes on the rebound today at 102.20, I sold out virtually all of my IRA position in GILD. I will now use ABBV here to hedge the GILD positions in my other accounts.
Ahead of earnings, the poster who signed himself as "sovaldinvestor", posted that he was putting 90% of his liquid assets into GILD since it was a "no brainer". There is no such thing. I hope I'm wrong, but I don't think they drove it down here to NOT take it under 100.