Well, technical is the most bullish that I have ever seen in recent weeks and months.
All Bollinger Bands are trending up and PPS is trading in Upper Band.
Upper BB is sitting at $23.50 but it will rise in coming days to open up the path for possible break up.
Mid BB is sitting at $19.22, trending up and acting as a good support. It will cross DMA(50) by Monday.
DMA(50) is sitting at $19.55, it will go lower and it will be flat at low $19. Eventually, in will trend up in coming weeks.
DMA(200) is sitting at $26.90. It is trending up slowly. This is the one that PPS is looking at to break it. It will do it eventually in coming weeks. Any good news may speed up the process and makes it days instead of weeks.
Have a nice day.
Most technical indications are showing positive trend.
The PPS is moving in Upper Bollinger Band which is trending up. The Band is still expanding, or it is saying much more room for higher prices.
Four indication matter in next few weeks
1- Mid BB = $19.08, a support which is trending up.
2- DMA(50) = $19.74, a support, will trend down an it will be stable at low $19.
3- Upper BB = $23.24, daily resistance, it is trending up and going higher daily.
4- DMA(200) = $26.88, short term resistance, almost flat or trending up very slowly.
By next week, DMA(50) will be flat and act as a strong support a low $19. Upper Bollinger Band expands to get close to DMA(200) around $27.
I see PPS around $27 in next few weeks.
HZNP technical is getting stronger. Now Bollinger Bands are heading up and Upper BB is marking a new high at $22.69 as today, about $.30 improvement compare to yesterday. It will continue to go higher until it reaches 200 DMA around $27. This opens the way and remove resistance when green days and when a good news comes our way. Mid and Lower BB are heading up too.
50 DMA will drop about $.20 per trading for next 4 trading days and then becomes flat around $19. This will be a strong support in case market goes crazy or an unexpected event happens. Basically, risk of a big drop will be limited to $19.
We will see higher high in coming days. I expect $21 becomes a new floor with flat and negative market.
Wash sale counts for the whole year but it has zero effect on what your losses is for the year until the last 31 days of the year (I say 31 to be safe). On the other hand, your account do the calculation and you can see you loss or income. Basically, recommendation is to stop trading of the same stock at the end of November to be safe. That is the reason I brought up this subject.
In addition, original_matrix is right about for professional traders. Trading should be your only job and income generator to be able to do mark-to-market accounting.
From this point on, ES has to be worry about HZNP that may pull out its orphan drugs from ES specialty pharmacies to give it to another one. TW pointed out that he may do it and it will be a loss for ES.
If you are a long term investors or you are a professional trader who use mark-to-market accounting then you do not need to be worry about wash sale. Mark-to-market needs permission from IRS. It has advantage of claiming your expenses like your home or office used for trading, the trading tools and others expense for taxes. But trading must be your main job.
Most of us use simple accounting. If you trade stocks, you should be careful for wash sale at this time of the year. Basically, if you sell a stock at loss then you should wait 30 days before buying the same stock back. Whatever you did during the year is OK, no wash sale is calculated for you but from December 1 to the end of the year is time that wash sale becomes important and any loss in equity will be counted for 2016 but not 2015 if you trade the same stock.
Sentiment: Strong Buy
I do not understand one point which is if DEPO is doing poorly today, it is not because of HZNP.
If the deal went thru then DEPO could claim breach of contract but no deal happened.
During past few months, DEPO benefitted greatly on shoulder of HZNP. After all, DEPO management did a lot of misinformation in regard to HZNP while hiding their style of business. It was DEPO that had zero development and a pure roll-up which only depended on price increase to compensate for high price it paid for Nucynta. 44% price increase immediately after Nucynta purchase is nothing but price gauging. Why it did not get media attention, it was probably because DEPO is a small cap and it is not a number.
Anyway, DEPO is on its own right now and if it has something to show, shareholders will award it.
This is a short term for next few weeks.
Upper Bollinger Band is sitting at $22.49 as today and this will be the limit for today. Upper BB will rise sharply in coming days and this restriction will be removed.
Next step is 200 DMA which is sitting at $26.83.
So, the only resistance will be around 200 DMA at $26.83 for next few weeks. However, it will be overpowered eventually after a few tries, the same way 50 DMA was resistance was overpowered in past few weeks.
Just to let you know that if you trade HZNP, make sure to have all your shares before the close everyday since some good news like acquisition may hit the wire at any day and it may push the stock to its high level, leaving you behind.
Sentiment: Strong Buy
The last proxy by HZNP was on 11/18, a day before the court day. HZNP appealed to DEPO by saying lets sit down and talk about the deal, a new one if you like. If you are not happy with this offer, HZNP can update it to make you happy. As a HZNP shareholders, I was afraid that TW was willing to give shares plus some cash which could value DEPO shares much higher than HZNP.
But, all communication was shut down from first day. DEPO management ignored all attempts by HZNP.
Not only a deal was good for DEPO shareholders but also could use DEPO management in some key roles.
It could keep DEPO as a subsidiary of HZNP where DEPO runs by current management.
No, DEPO management are from the moon and they did not blink. They are pursuing something else.
DEPO will not get anywhere in next 3 years, a slow growth and waiting for paint to dry. The recent DEPO acquisition was anything except a show to satisfy some shareholders. It may bring more expenses that profit for a few years.
The ball is in HZNP court and it can hit the ball as hard as it can. HZNP has threaten ESRX that it will remove its orphan drugs from ESRX specialty pharmacies and give it to another.
So, HZNP has nothing to lose from this point on but has upper hand in regard to ESRX which already played all its aces against HZNP.
If you are familiar with JNJ, it is a company more stingier than MSFT. Nucynta price was not cheap and JNJ squeezed every penny out of it. One of the secret about Nucynta is different dosages and the testing that was performed in this regard. DEPO is taking advantage of higher dosages to increase revenue. JNJ as a large company with more visibility did not want to get in trouble for selling higher dosages that may cause addiction. Yes, patients get addicted to pain killers and Nucynta is in the same category.This may cause problem for a company and some companies got in trouble for their pain killers. JNJ washed its hands to concentrate on cancer drugs but it did not let Nucynta to go cheap. DEPO as a small cap company in pain can take some risks but it was not worth it for JNJ.
ES is protecting its interest. VRX gave ES an excuse to go after small specialties, disables them with false accusations and then switches them to its own specialty. Remember that ES is under pressure to keep and raise income and recently laid off many employees.
However, HZNP has been thru this process before and it knows how to deal with this situation. TW has explained it in recent CCs. Basically, LC is a distributor which can be replaced. The court result will not affect HZNP business one way or another. The most important things for HZNP are doctors and patients. If doctors prescribe HZNP medicines then the company will find a way, thru a distributor, no necessary LC, to send the medicine to patient. That is the reason for confirming the guidance over and over in recent 3 CCs.
So, LC lawsuit against ES has no material effect on HZNP guidance and business.
It is nice if LC wins a case against ES which is a bad guy in this case.
1- Different cultures of two companies could create a lot of integration problems.
2- Except 3 drugs, the rest of DEPO drugs were dead with negative growth.
3- DEPO debt was added to HZNP plus diluted shares of about 84m
4- The joint company will have lower PPS with total shares of 244m. The joint PPS for 2016 is calculated to be something around $1.80 per share while HZNP by itself exceeds $2.10 per shares.
5- By acquisition of DEPO, HZNP limits its future acquisitions and projected 2020 income.
6- Pain and DEPO drugs will see more restrictions but higher competitions.
Regarding the DEPO shares, HZNP may exit slowly at higher prices. No rush.
HZNP may find an institution that wants them in one shot and of course the price is set higher than current price because it save institution headache. This is like DEPO issues shares at higher price than it current trading price.
It may be as early as tomorrow or sometimes next week. Anyway, it will be before the end of the year.
But, put aside holidays, weekends and dead days, we have less than 20 trading days for an announcement.
Another point, since DEPO deal is dead then HZNP may go for 2 acquisitions instead of one.
I think around 17:23 California time (20:23 ET) retails noticed the news and the stock jumped over $19 for last 37 minutes before ending AH trading. The last trade was at $18.90.
At least, retails liked it so far. I am sure some institutions are relieved.
It is a positive event for me and probably for many other shareholders.
HZNP started to act very unstable with this deal and some unsatisfied shareholder exited because of different reasons. Share dilution and higher debt scared some shareholders. It is better to be careful about acquisition since this was kind of VRX style acquisition with dilution and higher debt .
I was opposing the deal since it was waste of money and time.
This is second good news for me in this month.
1- I finished remolding of my kitchen since my wife was on my case almost every day.
2- DEPO bad luck spells is over. No need for DEPO CEO to bash us anymore.
We will be happy with current projection and outlook. With DEPO and 85m new shares, $575m new debt, the estimated should be lowered and in addition the debt becomes heavy, something that market is becoming very sensitive to high debt.
So, basically, At $30 per share for 85m shares plus debt, HZNP was paying over $3 billions or 6 times 2016 revenue of DEPO. It was not a good deal at all.
Sentiment: Strong Buy
No, you are barking at a wrong tree.
HZNP had 3 CC since yesterday and it clearly indicated that there will be no effect on HZNP guidance or business since LC is a distributer which can be replaced without any effect on HZNP business.
When D and V drugs removed last year, close to 50% of HZNP was dependent of those drugs last year.
Current move is less that 5% of HZNP revenue and HZNP already leaned to deal with the situation that will have zero effect on its business. Currently, V and D drugs are at record revenue even though they have been removed by both ES and CVS.
Sure, HZNP has sympathy for LC since it is a good business partner but what goes between LC and ES, it is their businesses. LC is a friend and enemy of the friend is HZNP enemy too.
So, you may find another issue to spread negativity but HZNP is vaccinated about this issue.
Sentiment: Strong Buy
This should a nonevent to HZNP.
Even though HZNP shareholders are interested in the outcome of LC suit against ES but there is no material effect on HZNP business since the company is looking at LC as a partner and a distributer but not something like do or die. If LC loses then HZNP will find a replacement from 70,000 other specialty in this field to deter any effect on HZNP business.
However, we are hopeful that LC wins to stop or slow down ES from its unfair practices.
Eventually, a group of specialties will go after ES with a larger lawsuit.
Sentiment: Strong Buy
In Stifel CC, HZNP indicated this is a matter between LC and ES and the court decision will not affect HZNP forecasted guidance or the way it does business. On the other hand, HZNP has other choices for distribution among 70,000 specialty pharmacies. At this point, HZNP feels sorry for LC and other small specialty pharmacies that are hurt by ES unfair practices. ES is taking advantage of VRX action to pile up on other small specialties and push them out of business for its benefit but this matter will not affect HZNP. If LC wins the court decision then it will distribute for HZNP otherwise, HZNP will find other means and other specialty pharmacies to accomplish the job. This is not like last year when a big portion of HZNP revenue was affected when ES and CVS removed two of HZNP drugs but since then, HZNP has found its way around this problem and this is much smaller problem compare to last year.