KORS, down 4+%, is under pressure today based on concern over a negative analyst call from Wedbush Securities citing “ slower than expected mall traffic….and higher than expected markdown inventory. This portends a revenue and gross margin miss. Three officers may have telegraphed this decline. The CEO, CFO and SVP all sold shares last week @ $ 82.20. The high trading volume today may reflect large institutions locking in 50% YTD profits. This selling pressure could intensify between now and year end.
Stock technical's are also signaling that KORS is correcting. MACD and 5/13 day EMA are negative. Stock is below 20 day, and very close to the 50 day SMA.
Mid to long term KORS prospects are positive, but @ $ 80.50, the price is ahead of it's skiis. KORS may soon test the mid $ 76- mid $ 77 resistance, a price range that offers a better risk adjusted reward.
FINL is under pressure today based on concern over today's quarterly reporting. CEO and President ( selling price $ 26.23- $ 26.52 ) along with other insiders selling 440,000 shares in 12 transactions recently may be a tell. Upside consensus target for analysts is
Technical's are also telegraphing that FINL is topping. MACD and 5/13 day EMA are negative. Stock is below 20 day SMA and nearing 50 day..
Mid to long term FINL prospects are positive, but @ $ 26.19, the price is ahead of it's skiis. A price range of $ 24.50- $ 25.00 offers a better risk adjusted reward.
NKE is under pressure today based on concern over today's reporting. CFO selling $ 5.1 million ( 66,000 shares @ $ 77- $ 80 ), along with other insiders selling 800,000 shares in 21 transactions recently may be a tell. Upside consensus target for analysts is $ 80.45, a modest upside from today's $ 78 price.
Technical's are also telegraphing that NKE is topping. MACD and 5/13 day EMA are negative. Stock is below 20 day SMA and nearing 50 day. A PEG of 2.05 also suggests that NKE is at the very high end of the relative value range. Put in context competitor UA has a quarterly revenue growth of .26, and GM of 48% vs. .08, and 43% for NKE.
Mid to long term NKE's prospects are positive, but @ $ 78, the price is ahead of it's skiis. A price range of
$ 75- $ 75.50 offers a better risk adjusted reward.
SPLK correcting 4.38%, on heals of strong recent selling of nearly 1.8 million shares by 5 officers including CEO and CFO. Selling prices range from $ 56.19- $ 63.55. High volume is confirming the correction.
Technical's are also breaking down, including MACD, EMA, RSI, and Stochastics.
Expect that early Venture Capital investor Sevin Rosen, owner of 16% of outstanding shares, to sell shares and lock in profits.
Thanks for your comments. Getting emotionally involved with a great company like NPSP, is easy to understand, but investing in the stock is business. That is why I try to be disciplined in my buy and sell targets.
I regularly gain insight and information from others. Admitting your mistake is a sign of intellect and maturity.
For over a month, I have chronicled the technical weakness in the NPSP charts. Stock has dropped steadily from October 3 $35 .72 to $ 27.99 close yesterday. Today's blowout signaled the final stage of the bear run. As previously indicated, I liquidated my position in early October. I have now re-entered today @ 3 different price levels ranging from $ 21.80 to $ 22.89. I will continue buying as the stock recovers.
IMO the fever has broken.
On October 14, I posted, “ last week I sold my considerable position in NPSP, to lock in a large profit, and replaced the stock with November 16 options.” Options offered two advantages:
1- Protecting against a choppy market. Even after today’s impressive 8.63% rebound, NPSP is still 13% lower than the $ 34.98 October 7 close.
2- The leveraged options value has increased more than the underlying stock today.
I also indicated that, “ Based on the charts, I will re-enter the stock at four different price levels between $ 22 and $ 27…….. The strategy changes if the broader market, and IBB decisively rebound, precipitated by a resolution to the debt/budget crisis. “
Where do we go from here? We know the following: External events were a major contributor to NPSP’s 20+% correction; The next known catalyst, is the November 4 earnings report. The question to be resolved, is today’s large pop a one day relief rally or will it continue through November 4. The movement and trading volume of NPSP, the IBB ETF, and S&P Thursday and Friday will provide the answer. Three consecutive days in either direction, usually confirms a rally or correction.
Some other high beta biotech’s rallying today to watch: REGN, up 5.8%, EXAS, up 5.7%, ARRY, up 4.97%, SRPT up 4.63%.
NSPS is tracking the decline in the IBB ( biotech etf ) since October 7. NPSP closed $ 34.98, and is now trading down 18% during that time frame. IBB is down 4% from October 7. This includes a 2.6% NPSP drop off today. This is not unusual, absent stock specific catalysts, most of the high beta biotech evidence an exaggerated movement up and down compared to the biotech index. They do however, track the directional movement of the index which is now definitively negative.
Assuming that NPSP continues to execute on clinical, commercial and financial milestones, these movements are not consequential for the longer term multiyear, investor. Shorter term, or investors seeking to maximize returns by optimizing entry and exit prices, will find this environment challenging, but potentially very lucrative. As I have indicated in previous posts, last week I sold my considerable position in NPSP, to lock in a large profit, and replaced the stock with November 16 options.
Based on the charts, i will re-enter the stock at four different price levels between $ 22 and $ 27. Put in context, these prices supports were all last realized within the past 60 days. The strategy changes if the broader market, and IBB decisively rebound precipitated by a resolution to the debt/budget crisis.
Sorry, but the big shorts, with rare and painful exceptions, act but don't talk about it. Witness, Bill Ackman, he wrote the book the how not to book on publically telegraphic his GMCR shorts. Carl Ichan was was his willing prof., short squeeze 101.
Let's look at the actual facts.
1- Strong team, from the University of Wisconsin world renowned Cancer Institute, with collaboration from the Mayo Clinic, and Genzyme. The team has, clinical, management, and business development chops.
2- A real product addressing a real need. Support from doctors seeking to obviate surgical complications and heath insurance companies eager to avoid unnecessary biopsies associated with high ratio of false positives from competing tests.
3- Nearly 70% of shares held by very savy institutional biotech investors including Blackrock, Obimed, JP Morgan, Vanguard, and Jennison.
4- Stock is in it's third day of a rebound against a negative multiday biotech sentiment. IBB ETF down .52%, EXAS up, on high confirming volume 1.63%. Friday's before a weekend when big news could unfold for the broader market, is frequently the preferred time for a bear attack buy the shorts. Today they are widely evident in the smaller biotech companies....but not EXAS. Ackman excepted, the short pro's know that fools walk in where wise men fear to tread.
Sage counsel, a cool head, and a keen eye for the possible. $ 25-$27 range, my staged buy target. Until then I'll play options for upside, w/o the pain of sharp drops.
Good question, probably shared by many. An SPO is an underwritten offering of shares in a public company, typically @ 1-5% discount depending on the size. Three types:
1- All the proceeds go to the company to be used for general corporate purposes, retiring debt, or M&A.. Dilution to existing shareholders may be offset by the productive use of proceeds. The "market" usually " votes " their opinion on the next trading day. Shares either rise or fall based on the collective market judgement on the benefit and timing of the deal.
2- Same as above, but all proceeds go to an existing large shareholder or insider, seeking to reduced or exit their position. The company cooperates because it does not want a disorderly selling process tanking the share price.
3- Hybrid, some proceeds to the company and some to one or more shareholders.
I hope this helps a bit.
Kudo's, Option calls are a prudent way to secure upside on NPSP, without risking a big drop in a volatile market. Highest open interest is Jan 18 $ 30 calls. Stock is not reacting well to $ 32 secondary, down 9-11%.
The market is very volatile. This affects NPSP and most stocks, especially those with the highest Beta. The NPSP slide from a high of $ 35.02 on October 8, to $ 27.77 low on October 9, a 7.78% partial rebound today, followed by a 3.45% pullback in after hours is ample evidence. Waiting it out on the sidelines is one alternative, buying when the stock declines to $ 25- $ 27, and selling $ 33.65- $ 35, can be remunerative. You will probably have several opportunities over the next six weeks. Options trading is another alternative that is a bit more complex, but lucrative.
What are your preferred tactics?
NPSP Update..... The good news.....we appear to have a 6 week respite to the debt/budget impasse. As suggested in my previous post high beta stocks like NPSP will disproportionately rise and fall in relation to the market and comparable's, S&P up 2.07%, IBB 3.41%, NPSP 7.77%% (recovering partially from yesterdays 24% peak to trough dip and 10/7 $ 34.98 close.)The bad news the delay is short and may result in a replay in mid November, absent concrete progress that has been elusive. Likely result, short lived market euphoria, followed by weeks of periodic turmoil and attendant stock corrections and rally’s.
This on-going uncertainty is not good for our country, but does provide an opportunity to buy the rips and sell the dips, via equity or options, on high beta quality biotech stocks like NPSP, REGN, SRPT, ARRY, EXAS, SGEN , and to a lesser degree CELG, BIIB, GILD.
REGN Update..... The good news.....we appear to have a 6 week respite to the debt/budget impasse. As suggested in my previous post high beta stocks like REGN will disproportionately rise and fall in relation to the market and comparable's, S&P up 2.07%, IBB 3.41%, REGN 4.39%. The bad news the delay is short and may result in a replay in mid November, absent concrete progress that has been elusive. Likely result, short lived market euphoria, followed by weeks of periodic turmoil and attendant stock corrections.
This on-going uncertainty is not good for our country, but does provide an opportunity to buy the rips and sell the dips on high beta biotech stocks like REGN, SRPT, ARRY, EXAS, SGEN , and to a lesser degree CELG, BIIB, GILD.
Welcome to the investing club. Don't worry about your yeoman status, we are all in a continuing education mode.
As someone who was originally educated in Economics, and later served a long tenure in corporate management, including over a decade as a CEO, I use the following methodology to determine investment themes. Macro analysis determines promising geography, and sectors. Fundamental analysis for company prospects and competitive advantage. Technical analysis to optimize risk adjusted entry and exit strategy. My particular investment horizon is a rolling 3 months, with weekly and sometimes daily fine tuning.
I believe that Biotech is an investable sector that requires attention to detail. The technology moves rapidly, FDA and European approvals are determinative, news moves stock dramatically.
REGN is a stock that I have been in and out of about a dozen time over the past three years. It has a well established pattern of dramatic run up's, corrections, and sideways trading, within an overall upward trend.
In addition to REGN, A partial list of my current investments include the following Biotech’s SRPT, EXAS, ARRY, SGEN( higher beta, higher risk ) CELG, BIIB, GILD ( more predictable, but more moderate returns and risk ). Financial, BX, AIG, RDN, PMT; Consumer, KORS, SBUX, DIS; Industrial BA, UTX Tech/social LNKD, AMZN, GOOG ; Energy CQP, EOG, PXD: Int’,l DXJ. Typically I invest in 3-5 dozen separate stocks/etf’s.
I respect the investment style of folks who identify good companies with superior technology and market positioning and just stay with them over an extended time period. I choose to accelerate the potential returns with carefully priced entry and exit points. You are correct, the only one who can predict the future with certainty is a market historian looking at the past. Technical analysis improves the odds, it is not a crystal ball.
I hope this is helpful…….Good luck and success.
MU certainly has been a momentum stock since September 4th, propelled by the demand for DRAM, consolidation of suppliers, and the more transient fire at a competitor that has temporarily reduced supply. I like the business model and competitive barriers. The good news is largely priced into a stock that is showing signs of being toppy. Anything less than a meet and beat report today will likely result in a significant selloff. The technical’s, are beginning to flash caution signals. The 12/26 day SMA is below the 9 day and declining, and the Stochastics are telegraphing an over bought condition.
Please also consider the top five institutional investors with 25.7% of the outstanding shares, could materially affect the share price, if they lock in Q-3 or yearly profits or they diversify their holdings. Shorts are 11.1% of float, above the 10% threshold considered to be high. Company officers, including the CEO, President, and CFO, selling 4.4 million shares since September, at prices ranging from $ 17.05- $ 18.64. Taken together, this puts downward pressure on stock appreciation, and suggests that senior management may believe that the stock is fully valued in the near term.
The external environment over the next six weeks is perilous. As the President and Congress tackle the expired budget, and the extension of US debt limits, high Beta stocks such as MU, frequently outperform in a rising market and over correct during pullbacks.
In summary, near term risk adjusted returns favors adding to or acquiring a position closer to the $ 15.57 50 day SMA support, or even $ 14.44 September low’s depending on the magnitude of a miss in earning’s, revenue, or guidance expectations today.
You are asking for reassurance from this message board of contributors. You may be asking the wrong question. The outlook for NSPS is definitely relevant, however, your personal circumstances, objectives, time horizon, and risk tolerance are even more important.
It is obvious, to most, that externalities associated with the budget and debt are weighing on the broader market ( S&P), Biotech sector ( IBB ETF ), and even more pronounced the high momentum, high beta biotech stocks like NPSP and others. Witness the 10% drop yesterday plus the 4.5% slide in NPSP today.
Until the impasse is resolved, the headwinds will be pronounced. Since most political crisis are solved at the last moment, look for a compromise sometime between October 17 debt limit and October 30 " default day " when the Treasuries' payment obligations exceed the available funds.
Given the negative market for the next several weeks, the questions you may wish yourself are
1- Will there be a NPSP specific catalyst between now and November 7 quarterly report to short term permit the company to overcome the broader market.
2- Do you have a longer time horizon, permitting you to look through a potential correction to $ 25- $ 26 support levels between now and months end.
3- Most importantly, if you did not own any shares of NPSP, would you buy the stock now at today's price, or would you seek to enter at a lower price.
Only you can answer these questions. While my circumstances are different from yours and may not be the right answer for you, I sold my NPSP stock holdings last week and replaced them with Nov 16 options to mitigate a market induced slide in the stock, while securing a post November 7 bump, assuming a favorable earnings report from the company.
I have been posting since September 11, under the header " NPSP: S/T Correction Mid/LT Positive", the view that the combined budget and debt impasse was providing a headwind to the market that would be difficult for any stock to overcome until resolved. As I indicated, I have been selling the rips on most of my holdings since that time, and now have nearly a 70% cash position vs my typical 15% cash.
In the case of promising investments such as NPSP and others, I have replaced equity with November 16 options, to obviate near term downside risk while participating in upside appreciation. I plan on reentering the equity market with my stock specific buying list, in stages when and if the S&P declines to four targeted price levels, or when the impasse is resolved.
Theater is entertainment, this imbroglio is doing real damage. We agree that this will end, the question is when, and at what price to the economy, shareholders, and those like our veterans in need of government services.
If you believe we are on the precipice of a solution, now may be a good buying opportunity. I do not see convincing evidence that a we are on the one yard line. Based on externalities, an additional 10-12% NPSP drop is plausibly more likely than a bottom today. Since , absent the gift of prophecy, the answer to these questions is unknowable, I have elected to use options to access future profits without risking a large drop in equity value.
You may have more confidence than I in our leaders achieving a rapid solution. I sincerely hope you are right, but am unwilling to bet the farm, when alternatives to play the positive medium term NPSP theme are available.
Best of luck for continued success in your investing.