I have some FB, but I think playing earnings is perilous, especially given the foreign exchange adjustments which might be necessary for some this time. Rather than go long stocks which everyone is sure will beat earnings (isn't that easy), I would rather go long stocks which have a large short position and some skepticism. Everyone knows that Apple has sold a lot of phones, but I think there's a widespread suspicion that their watch is a bust. I have a lot of AAL, and I think their projections will be very good. But since I bought it at 29 - 30, I'm not worried. A riskier one would be IRWD or ARII. The latter is way off on the oil weakness, but since it's obviously not hurting the railroads, I don't think it will hurt them either. The cat is already out of the bag with PCYC - everyone can project ibrutinib sales from Janssen's numbers. I also think MDVN will be strong, but here again,my basis is very low. I have already had a nice bounce on CLMT, but if they declare a full dividend, it should be good for another couple of points. By the way, I would never use margin to bet on earnings. My general principle is to never buy a stock which I can't imagine holding for a year. Good luck.
PS The idea that the option players - people who don't have enough money to buy the actual stock - know more than those who hold the stock is laughable. The smart options players will be out of this by Wednesday at the latest.
I think the massive imbalance in those Feb 20 options indicates that the stock will have a very hard time breaching that level. You should be aware that one very efficient way of shorting this stock is to sell those 110 calls to the believers. In a short's dream, they let this ride up to 108.50 or so next week and are peddling those Feb110's for around 3 bucks.
Thanks, Keith, Interesting that these overwhelmingly favorable results were somehow distorted to look unfavorable. Even I, a statistics naïf, could calculate that in a study which was meant to measure progression-free survival, MDVN hit a home run. There is a post in SA which summarizes this nicely..
Well,let's guess. Santarus, a fairly analgous company, brought a 37% premium, which would bring us to around $22.
Yes, not only do I think that Miller's numbers are correct, I think that outside of Gilead management, he's in a better position than anyone to know the true extent of the discounting. And this, rather than market share, I would submit, is the real issue.
How about buying a pharma company which is not involved in a mutually destructive price war? How about neither?
What about this post merits the thumbs down? A mild opinion and an incontrovertible fact. I s anything less than "Sell everything and put it all into GILD." unacceptable? (Note: AAL from Oct.19 to present, 28.50 - 55.59. GILD over the same period, 101.44 - 105.19.).
Well, you seem to be catching some nice bounces lately. But I would never exit the airlines at this point. All three of the stocks you dropped made new 52 week highs today.
As reluctant as I am to give in to conspiracy theories, it looks to me like someone big was short the stock going into TERRAIN release and jumped on it at the open, whereupon many read bad things into the trial. Casodex only outperformed Xtandi if you don't adjust for the length of treatment and if you don't consider a metastasis an adverse outcome. (Actually, of course, it is the most adverse outcome.) I added quite a few shares, mostly just north of 104, and then, on the premise that you should put your buy orders in where others have their stops, got some at 103.94. I expected it to find its way back to 106, but it did better than that.
The question of how many people get the ABBV treatment is unresolved, but from their stock price action, I'd guess not many. Meanwhile, only about 22% of ESRX's patients (if I recall) are on the formulary, so if the others want Harvoni, they're getting it cheaper. Note that when Miller came out with that statement, his stock took off, many calculating that a large chunk of that $4 billion ends up in ESRX's coffers.
Reading between the lines of his statement today, he seems to be hinting that while excluding Harvoni from his formulary was necessary, when the exclusive agreement with ABBV expires, they may be back in.
Miller is on the wires trumpeting that the price war he initiated between ABBV and GILD will save US consumers $4 billion this year. (Assuming that he's going to charge us for creating this windfall, the revenue loss to the two companies might be somewhat greater.) The interesting part is that he says the price of the ABBV drug combo here has come down to European levels, which he describes as "between $51,000 and $66,000", and that the price differential between Harvoni and the ABBV combo has remained about $10,000. Obviously, there's a lot of air between $51,000 and $66,000, but if we take the midpoint of $58,500 and add the $10,000 Harvoni premium to it, we come out with $68,500, which would mean that the drug is being discounted by $26,000, or 27.5%. The discount to governmental organizations, apparently is higher. Which would mean that the total discount is above the 30% level in the U.S. Assuming the midpoint of $58,500 creates the big variable. We should also consider that the drop in the Euro isn't going to help. JNJ got slammed by the currency issue on its earnings. I note that Zytiga revenues were up 20%, but without the currency adjustment, would have been up 29%.
Nor I. Might as well add some here. (Reasoning that if the trial results were bad, it would be down much more.)
Excellent posts, Durango. Meanwhile the TERRAIN results are out and the stock is selling off a bit. Perhaps some expected stronger results or are put off by the increased incidence of adverse events in the Xtandi group. However, I assume that these patients were treated until radiographic evidence of progression, and the xtandi group seems to have been trated for almost twice as long.
Okay, now we're up to 10 thumbs down. And all I did was paste a relevant piece of analysis, which I noted seems muddled. (She appears to be forecasting "at worst case" a 22% discount and a $1 b revenue shortfall and then goes on to raise the possibility of a 30% discount and a $2.5 b shortfall.) Meanwhile whoever posted "I've just got a feeling that good news is on the way" gets 4 thumbs up for his insight.