Monday, October 18, 2010

18 October 2010 Pharms and Worms in the AAPL

BAGAKOAA; 18 October 2010 Pharms and Worms in the AAPL

We owed you an answer on pharmaceuticals and we have it now. I will be the first to admit I was not able to answer 8-10 of the 5% guarantee post seen here over the weekend, but we did our best. We crunched the numbers and did the homework on the following companies:

NVO Novo Nordisk A/S, a healthcare company, engages in the discovery, development, manufacture, and marketing of pharmaceutical products. It operates in two segments, Diabetes Care and Biopharmaceuticals. The Diabetes Care segment covers insulin franchise, including modern insulins, human insulins, protein-related sales, and oral antidiabetic drugs, as well as GLP-1 analogue. The Biopharmaceuticals segment provides products in the areas of haemophilia, growth hormone therapy, hormone replacement therapy, and inflammation therapy. The company's products are marketed and distributed through subsidiaries, distributors, and independent agents in the United States, Japan, China, Russia, India, Brazil, and Turkey. Novo Nordisk A/S was founded in 1925 and is headquartered in Bagsvaerd, Denmark.

TEVA, Teva Pharmaceutical Industries Limited engages in the development, production, and sale of a range of generic and branded pharmaceuticals, biogenerics, and active pharmaceutical ingredients (APIs) worldwide. The company's principal products include Copaxone for multiple sclerosis; and Azilect for Parkinson's disease. Teva Pharmaceutical also provides specialty pharmaceutical products, which include respiratory products based on its proprietary delivery systems, including Easi-Breathe, an advanced breath-activated inhaler; Spiromax/Airmax, a multidose dry powder inhaler; Steri-Nebs, the blow-fill-seal based nebulizers; and Cyclohaler, a single dose dry powder device. The company's branded respiratory products include ProAir, a short-acting beta-agonist for the treatment of bronchial spasms and exercise-induced bronchospasm; and Qvar, an inhaled corticosteroid for long-term control of chronic bronchial asthma. In addition, it offers APIs for respiratory, cardiovascular, anti-cholesterol, central nervous system, dermatological, hormones, anti-inflammatory, oncology, immunosuppressants, and muscle relaxants. Further, the company provides women's health care products, such as oral contraceptives, intrauterine contraception, and hormone therapy treatments for menopause/perimenopause, as well as therapies for use in infertility and urinary incontinence. It also holds a biotechnology platform focused on the development of peptide and protein-based medicines. Teva Pharmaceutical has cooperation agreements with Kowa Company, Ltd.; Lonza Group Ltd.; H. Lundbeck A/S; Impax Laboratories, Inc.; Anchen Pharmaceuticals, Inc.; sanofi-aventis; and OncoGenex Pharmaceuticals. The company was founded in 1901 and is headquartered in Petach Tikva, Israel.

FRX, Forest Laboratories, Inc. develops, manufactures, and sells branded and generic forms of ethical drug products. Its principal products include Lexapro to treat depression; Namenda to treat Alzheimer's disease; Bystolic, beta-blocker to treat hypertension; and Savella for the treatment of fibromyalgia. The company also provides Sudocrem, a topical preparation to treat diaper rash; Colomycin, an antibiotic to treat cystic fibrosis; Infacol, which is used to treat infant colic; and Exorex, which is to treat eczema and psoriasis. In addition, its products include Dutogliptin, a small molecule dipeptidyl-peptidase-4 inhibitor, which is in Phase III studies to treat Type II diabetes mellitus; F2695 that completed Phase II study and is a selective norepinephrine and serotonin reuptake inhibitor for the treatment of depression and other central nervous system disorders; and ceftaroline acetate, a injectable cephalosporin antibiotic that exhibits bactericidal activity against the strains of gram-positive bacteria. Further, the company's products comprise NXL104, an intravenous beta-lactamase inhibitor; Linaclotide for the treatment of constipation-predominant irritable bowel syndrome and chronic constipation; Aclidinium, an inhaling therapy, which is in Phase III studies for chronic obstructive pulmonary disease; and Cariprazine, an atypical antipsychotic in Phase II(b) studies for the treatment of schizophrenia, bipolar mania, and other psychiatric conditions. Additionally, its products include Oglemilast, a phosphodiesterase-IV inhibitor in Phase II study to treat COPD and asthma; and Benicar, an angiotensin receptor blocker to treat hypertension. The company has collaboration and license agreements Phenomix Corporation, Pierre Fabre Medicament, Novexel, S.A., Laboratorios Almirall, S.A., Gedeon Richter Ltd., Glenmark Pharmaceuticals Ltd., and AstraZeneca plc. Forest Laboratories, Inc. was founded in 1956 and is based in New York, New York.

VRTX, Vertex Pharmaceuticals Incorporated engages in the discovery, development, and commercialization of small molecule drugs for the treatment of serious diseases worldwide. Its product pipeline includes Telaprevir (VX-950), a Phase III clinical trial product for the treatment of hepatitis C virus (HCV) infection; VX-222, a Phase IIa clinical trial product targeting HCV infection; and VX-985 and VX-759, which are in Phase I clinical trials for the treatment of HCV infection. The company's products also comprise VX-770, a Phase III clinical trial candidate for the treatment of cystic fibrosis; VX-809, a Phase IIa clinical trial product targeting cystic fibrosis; VX-509, a Phase IIa clinical trial product for the treatment of rheumatoid arthritis; and VX-765, a Phase IIa clinical trial product targeting epilepsy. It has collaboration agreements with Janssen Pharmaceutica, N.V.; Mitsubishi Tanabe Pharma Corporation; Cystic Fibrosis Foundation Therapeutics Incorporated; Merck & Co., Inc.; and GlaxoSmithKline plc. Vertex Pharmaceuticals was founded in 1989 and is headquartered in Cambridge, Massachusetts.

WCRX, Warner Chilcott plc, a specialty pharmaceutical company, focuses on the development, manufacture, and promotion of branded pharmaceutical products in gastroenterology, women's healthcare, dermatology, and urology segments in North America and western Europe markets. The company primarily offers ASACOL for the treatment of ulcerative colitis for orally administered 5-aminosalicylic acid products; ASACOL HD that provides dosing advantages for patients in the treatment of moderately active ulcerative colitis; ACTONEL for the prevention and treatment of postmenopausal osteoporosis; FEMCON Fe, OVCON 35, OVCON 50, and ESTROSTEP Fe, which are oral contraceptives for the prevention of pregnancy; ESTRACE cream for treatment of urogenital symptoms of menopause; and FEMHRT, a systemic therapy for the treatment of menopausal symptoms. It also provides DORYX, a tetracycline-class oral antibiotic for the treatment of severe acne; and ENABLEX for the treatment of symptoms of overactive bladder. The company markets its products and services through wholesale pharmaceutical distributors, and retail drug and grocery store chains. Warner Chilcott plc was formerly known as Warner Chilcott Limited and changed its name on August 21, 2009. The company was founded in 1968 and is based in Ardee, Ireland.

PFE, Pfizer Inc., a biopharmaceutical company, engages in the discovery, development, manufacture, and marketing of prescription medicines for humans and animals worldwide. The company's Biopharmaceutical segment offers products in the areas of primary care, specialty care, established products, emerging markets, and oncology customer-focused units. Its principal products include Lipitor for elevated cholesterol levels in the blood; Norvasc for hypertension; Caduet for cardiovascular events; Chantix/Champix for smoking cessation; Lyrica for neuropathic pain; Revatio for pulmonary arterial hypertension; Geodon/Zeldox, a psychotropic agent; and Aricept for Alzheimer's disease. This segment's products also comprise Celebrex for osteoarthritis and rheumatoid arthritis and acute pain; Zyvox for Gram-positive pathogens; Viagra for erectile dysfunction; Detrol/ Detrol LA for overactive bladder; Sutent for advanced renal cell carcinoma; Xalatan for open-angle glaucoma and ocular hypertension; Genotropin for growth disorders; Vfend, an antifungal agent; Effexor for depressive disorders; Prevnar/Prevnar7 for invasive pneumococcal disease; Enbrel for rheumatoid arthritis; Protonix, proton pump inhibitor for erosive esophagitis; and Spiriva for breathing problems. The company's Diversified segment offers animal health products, which include antibiotics, anti-inflammatories, antiemetics, parasiticides, and vaccines; consumer healthcare products comprising dietary supplements, pain management, respiratory, and topicals/gastro-intestinal products; Nutrition products; and Capsugel products that include gelatin, liquid, softgel, non-animal, and fish gelatin capsules. Pfizer Inc. serves doctors, nurse practitioners, physician assistants, pharmacists, hospitals, pharmacy benefit managers, managed care organizations, and government agencies. It has a strategic alliance with Acacia Living Inc. The company was founded in 1849 and is headquartered in New York, New York.

JNJ (we have a coupld of calls on this), Johnson & Johnson engages in the research and development, manufacture, and sale of various products in the health care field worldwide. The company operates in three segments: Consumer, Pharmaceutical, and Medical Devices and Diagnostics. The Consumer segment provides products used in baby care, skin care, oral care, wound care, and women's health care fields, as well as nutritional, over-the-counter pharmaceutical products, and wellness and prevention platforms under the names JOHNSON'S, AVEENO, CLEAN & CLEAR, JOHNSON'S Adult, NEUTROGENA, RoC, LUBRIDERM, Dabao, Vendome, LISTERINE, REACH, BAND-AID, PURELL, CAREFREE, STAYFREE, SPLENDA, TYLENOL, SUDAFED, ZYRTEC, MOTRIN IB, and PEPCID AC. The Pharmaceutical segment offers products in various therapeutic areas, such as anti-infective, antipsychotic, cardiovascular, contraceptive, dermatology, gastrointestinal, immunology, neurology, oncology, urology, and virology. Its products include REMICADE, a biologic approved for the treatment of immune mediated inflammatory diseases; PROCRIT, a biotechnology-derived product that stimulates red blood cell production; LEVAQUIN, which is used in the anti-infective field; RISPERDAL CONSTA, a injectable for the treatment of schizophrenia; CONCERTA, a product for the treatment of attention deficit hyperactivity disorder; ACIPHEX/PARIET, a proton pump inhibitor; DURAGESIC/Fentanyl Transdermal, a treatment for chronic pain; VELCADE for the treatment of multiple myeloma; PREZISTA for treating HIV/AIDS patients; and INVEGA, a atypical antipsychotic. The Medical Devices and Diagnostics segment primarily offers circulatory disease management products; orthopaedic joint reconstruction, spinal care, and sports medicine products; surgical care, aesthetics, and women's health products; blood glucose monitoring and insulin delivery products; professional diagnostic products; and disposable contact lenses. The company was founded in 1886 and is based in New Brunswick, New Jersey.

ABT, Abbott Laboratories engages in the discovery, development, manufacture, and sale of health care products worldwide. It operates in four segments: Pharmaceutical Products, Diagnostic Products, Nutritional Products, and Vascular Products. The Pharmaceutical Products segment offers adult and pediatric pharmaceuticals for rheumatoid arthritis, psoriatic arthritis, ankylosing spondylitis, psoriasis, Crohn's disease, dyslipidemia, HIV infection, hypothyroidism, advanced prostate cancer, endometriosis and central precocious puberty, anemia, obesity, epilepsy and bipolar disorder, migraines, secondary hyperparathyroidism, gastroesophageal reflux disease, duodenal and gastric ulcers, and erosive esophagitis, as well as provides anesthesia products and anti-infectives. The Diagnostic Products segment offers immunoassay systems; chemistry systems; assays used for screening and/or diagnosis for drugs of abuse, cancer, therapeutic drug monitoring, fertility, physiological, and infectious diseases; instruments that automate the extraction, purification, and preparation of DNA and RNA from patient samples, and detect and measure infections agents; genomic-based tests; hematology systems and reagents; and point-of-care diagnostic systems and tests for blood analysis. The Nutritional Products segment provides a line of pediatric and adult nutritional products. The Vascular Products segment offers coronary, endovascular, and vessel closure devices, such as drug-eluting coronary stent systems, coronary metallic stents, balloon dilatation products, coronary guidewires, vessel closure devices, and carotid stent systems to treat vascular disease. Additionally, the company provides blood glucose monitoring meters, test strips, data management software, and accessories for people with diabetes; and medical devices for the eye, including cataract surgery, lasik surgery, contact lens, and dry eye products. Abbott Laboratories was founded in 1888 and is based in Abbott Park, Illinois.

LLY, Eli Lilly and Company develops, manufactures, and sells pharmaceutical products worldwide. It offers neuroscience products to treat schizophrenia, manic episodes, and bipolar maintenance; depression and diabetic peripheral neuropathic pain; attention-deficit hyperactivity disorder in children, adolescents, and adults; depression, bulimia nervosa, and obsessive-compulsive disorders; and bipolar depression and treatment-resistant depression. The company's endocrinology products are used for diabetes; type 2 diabetes; osteoporosis in postmenopausal women; osteoporosis in postmenopausal women and men at high risk for fracture; and human growth hormone deficiency and pediatric growth conditions. It also provides oncology products to treat malignant pleural mesothelioma; pancreatic, metastatic breast, non-small cell lung, ovarian, and bladder cancers; and colorectal cancers, as well as offers cardiovascular products for treating erectile dysfunction, for the reduction of thrombotic cardiovascular events in patients with acute coronary syndrome, as an adjunct to percutaneous coronary intervention, and for the treatment of adults with severe sepsis at high risk of death. In addition, the company offers animal health products, such as cattle feed additives; antibiotics used to treat respiratory diseases and other diseases in cattle, swine, and poultry; leanness and performance enhancers for swine and cattle; protein supplements to improve milk productivity in dairy cows; anticoccidial agents for use in poultry; antibiotics used to control enteric infections in calves and swine; parasiticides for use on cattle and premises; and products that prevents flea infestations on dogs, as well as other pharmaceutical products to treat staphylococcal infections and bacterial infections. Eli Lilly distributes its products principally through independent wholesale distributors, as well as directly to pharmacies. The company was founded in 1876 and is based in Indianapolis, Indiana.

NVS, Novartis AG, through its subsidiaries, engages in the research, development, manufacture, and marketing of healthcare products worldwide. Its Pharmaceuticals division engages in the research, development, manufacture, distribution, and sale of pharmaceuticals in various therapeutic areas, including cardiovascular and metabolism; oncology; neuroscience and ophthalmics; respiratory; and immunology and infectious diseases. The company's Vaccines and Diagnostics division offers preventive vaccines and diagnostic tools. This division provides influenza, meningococcal, pediatric, and traveler vaccines; and blood testing and molecular diagnostics to prevent the spread of infectious diseases. Its Sandoz division offers prescription medicines, as well as pharmaceutical and biotechnological active substances. This division provides active ingredients and finished dosage forms of pharmaceuticals; anti-infectives; protein or biotechnology-based products; and cytotoxic products, as well as offers biotech manufacturing services to other companies on a contract basis. The company's Consumer Health division consists of three business units: over-the-counter medicines (OTC), Animal Health, and CIBA Vision. OTC offers readily available consumer medicines. Animal Health provides veterinary products for farm and companion animals. CIBA Vision manufactures contact lenses and lens care products. Novartis AG has a strategic alliance with Intercell AG to develop vaccines; a strategic partnership with Lonza, a Swiss pharmaceuticals manufacturing company; and an agreement with Synthetic Genomics Vaccines Inc. to apply synthetic genomics technologies for the development of influenza drugs. The company was founded in 1895 and is headquartered in Basel, Switzerland.

JAZZ, Jazz Pharmaceuticals, Inc., a specialty pharmaceutical company, develops and commercializes products for neurology and psychiatry primarily in the United States. The company's marketed products include Xyrem, a sodium oxybate oral solution for the treatment of excessive daytime sleepiness and cataplexy in patients with narcolepsy; and Luvox CR for obsessive compulsive disorder and social anxiety disorder. The company's late-stage product candidate comprises JZP-6, which has completed two Phase III pivotal clinical trials, for the treatment of fibromyalgia. Its other product candidates in clinical development consist of JZP-8, an intranasal formulation of clonazepam for the treatment of recurrent acute repetitive seizures in epilepsy patients who continue to have seizures while on stable anti-epileptic regimens; JZP-4, a controlled release formulation of an anticonvulsant for the treatment of epilepsy and bipolar disorder; and JZP-7, a transdermal gel formulation of ropinirole for the treatment of restless legs syndrome. In addition, the company is developing oral tablet forms for sodium oxybate. Jazz Pharmaceuticals, Inc. was founded in 2003 and is headquartered in Palo Alto, California.

RDY, Jazz Pharmaceuticals, Inc., a specialty pharmaceutical company, develops and commercializes products for neurology and psychiatry primarily in the United States. The company's marketed products include Xyrem, a sodium oxybate oral solution for the treatment of excessive daytime sleepiness and cataplexy in patients with narcolepsy; and Luvox CR for obsessive compulsive disorder and social anxiety disorder. The company's late-stage product candidate comprises JZP-6, which has completed two Phase III pivotal clinical trials, for the treatment of fibromyalgia. Its other product candidates in clinical development consist of JZP-8, an intranasal formulation of clonazepam for the treatment of recurrent acute repetitive seizures in epilepsy patients who continue to have seizures while on stable anti-epileptic regimens; JZP-4, a controlled release formulation of an anticonvulsant for the treatment of epilepsy and bipolar disorder; and JZP-7, a transdermal gel formulation of ropinirole for the treatment of restless legs syndrome. In addition, the company is developing oral tablet forms for sodium oxybate. Jazz Pharmaceuticals, Inc. was founded in 2003 and is headquartered in Palo Alto, California.

AZN, AstraZeneca PLC, a biopharmaceutical company, discovers, develops, manufactures, and markets prescription pharmaceuticals in the areas of cancer, cardiovascular, gastrointestinal, infection, neuroscience, and respiratory and inflammation illnesses worldwide. Its product line primarily comprises Crestor for managing cholesterol levels; Nexium for acid reflux; Synagis for RSV, a form of respiratory infection in infants; Seroquel for schizophrenia, bipolar disorder, and major depressive disorders; Arimidex for breast cancer; and Symbicort for asthma and chronic obstructive pulmonary disease. The company also engages in the research, development, manufacture, and marketing of medical devices and implants for use in urology, surgery, and odontology. In addition, it develops and manages hospital-based outpatient cancer centers in the United States. Further, the company focuses on the discovery and development of anti-viral therapies; and designs and manufactures bespoke dental implant abutments using a patented CAD/CAM method. The company markets its products primarily to care and specialist physicians, as well as to other healthcare professionals through distributors or local representative offices. AstraZeneca PLC has strategic alliances with Alcon Research, Ltd. to identify eye care products using AstraZeneca compounds; and Quintiles Limited to provide integrated services for various clinical pharmacology studies. The company was formerly known as Zeneca Group PLC and changed its name to AstraZeneca PLC in April 1999. AstraZeneca PLC was founded in 1992 and is headquartered in London, the United Kingdom.

SNTS, Santarus, Inc., a specialty biopharmaceutical company, engages in acquiring, developing, and commercializing proprietary products for the treatment of upper gastrointestinal diseases and disorders. Its products include Zegerid capsules and powder for oral suspension, which are proprietary immediate-release formulations that combine omeprazole and antacids to treat upper gastrointestinal diseases and disorders, such as heartburn, gastroesophageal reflux disease (GERD), erosive esophagitis, and gastric and duodenal ulcers; and Glumetza tablets for the treatment of type 2 diabetes. The company also offers Omeprazole tablet, which is approved for the treatment of upper gastrointestinal conditions, including GERD; and Zegerid OTC that is approved for the treatment of heartburn. In addition, it is developing Budesonide MMX, which is in Phase III clinical trails for the treatment of mild or moderate active ulcerative colitis; and Rifamycin SV MMX that is in Phase III clinical trails for the treatment of travelers' diarrhea. The company has strategic alliances with Schering-Plough to develop, manufacture, and sell Zegerid brand OTC products in the lower dosage strength of 20 mg of omeprazole in the United States and Canada; GlaxoSmithKline to develop, manufacture, and commercialize prescription and OTC products in approximately 114 countries, including in Africa, Asia, the Middle-East, and Central and South America; Norgine B.V. to develop, manufacture, and commercialize prescription omeprazole products in western, central, and eastern Europe, as well as in Israel; and Cosmo Technologies Limited, which grants Santarus, Inc. exclusive rights to develop and commercialize Budesonide MMX and Rifamycin SV MMX in the United States. Santarus, Inc. sells its products to the pharmaceutical wholesale distributors. The company was founded in 1996 and is based in San Diego, California.

ENDP, Endo Pharmaceuticals Holdings Inc., through its subsidiary, Endo Pharmaceuticals Inc., engages in the research, development, manufacture, marketing, and sale of branded and generic prescription pharmaceuticals in the United States. Its primary products include Lidoderm, a topical patch product for the relief of the pain associated with post-herpetic neuralgia; Opana and Opana ER, and Percocet for the relief of moderate to severe pain; Voltaren Gel for use in treating pain associated with osteoarthritis; Frova for the acute treatment of migraine headaches in adults; Supprelin LA for treating central precocious puberty (CPP) or the early onset of puberty in children; Vantas for the palliative treatment of advanced prostate cancer; Valstar, a sterile solution for intravesical instillation of valrubicin and BCG-refractory CIS of the bladder; Hydron Implant, a reservoir-based drug delivery system available for parenteral administration; Sanctura for the treatment of overactive bladder (OAB) with symptoms of urge urinary incontinence, urgency, and urinary frequency; and Sanctura XR to treat OAB symptoms. The company also offers generic products, including Endocet and morphine sulfate. In addition, it provides various development stage products, which primarily comprise Aveed for the treatment of male hypogonadism; Fortesta for testosterone replacement therapy in male hypogonadism; Octreotide implant for the treatment of acromegaly; Urocidin for the treatment of non-muscle-invasive bladder cancer that is currently undergoing Phase III clinical testing; and Axomadol in Phase II development for the treatment of moderate to moderately severe chronic pain and diabetic peripheral neuropathic pain. The company has a strategic alliance agreement with Penwest Pharmaceuticals Co. Endo Pharmaceuticals Holdings was founded in 1997 and is headquartered in Chadds Ford, Pennsylvania.

DEPO Depomed, Inc., a specialty pharmaceutical company, develops and commercializes pharmaceutical products based on its proprietary oral drug delivery technologies in the United States. It markets GLUMETZA for the treatment of type 2 diabetes in the United States and Canada; and Proquin XR for the treatment of uncomplicated urinary tract infection in the United States. The company's product candidates include DM-1796 for the treatment of postherpetic neuralgia, which has completed a Phase III clinical trial; Serada for the treatment of menopausal hot flashes, which has completed a Phase III clinical trial; DM-3458 for gastroesophageal reflux disease; and DM-1992 to treat Parkinson's disease, which has completed a Phase I clinical trial. It sells its products to wholesalers and retail pharmacies. The company has collaboration and license agreements with Solvay Pharmaceuticals, Inc.; PharmaNova, Inc.; Santarus, Inc.; Merck & Co., Inc.; Covidien, Ltd.; TEVA Pharmaceuticals USA, Inc.; King Pharmaceuticals, Inc.; Esprit Pharma, Inc.; LG Life Sciences, Ltd.; Rottapharm/Madaus S.r.l.; PharmaNova, Inc.; and Supernus Pharmaceuticals, Inc. Depomed, Inc. was founded in 1995 and is based in Menlo Park, California.

Now after looking into all of these, at face value I have to say there are not many with a nice safety of margin, at least from the larger cap pharms. For example, LLY and AZN have no margin of safety. I am looking for at least a 20% margin of safety meaning the target prices are at least 20% above their current price. That puts many of the big boys out of the game. I had to pick apart NVO because the target price was stupid high and sure enough we came back to a 23% margin of safety. With that adjustment, NVO looks very interesting. Many readers with think the 95 dollar a share is expensive, BUT (we know what that means) it is a little rich on its forward looking P\E ratio at 20. This is a leader in the diabetes market and I can’t think of a better pharmaceutical market to be in. I only know of one individual who actually exercised their way around diabetes drugs for few years, the rest of us just take the drugs.

RDY The India based generic drug maker had a really stupid high gap between current price and target price. I cannot explain the gap so I would not be buying it right now.

SNTS Santarus specializes in gut pills for gassy stomachs and GURD. This is an interesting speculative trade. They have a 34 % margin of safety (although there are not many target pices out there for a base to average from). It forward looking P/E is a little rich at 24, but it has little debt, and at this level lends itself to a possible buy out at times three or four current value. That is all Speculation. DO YOUR HOMEWORK. I would consider getting into this stock. I want to read some of the quarterlys first and suggest you do the same. Another speculative trade would be DEPO which focuses on diabetes and urinary tract oral deliver drugs. It has a healthy margin of safety, but it is rich at a forward P/E of 50+. It looks like an analyst or two might know something about future FDA announcements because I can’t come up with the 7.75 target price. If you can it might worth the spin of the roulette wheel. Then you have TEVA which Cramer loves. It has a decent margin of safety (23%). It’s cheap at a P/E of 10. It has no meaningful debt. It has teeny tiny dividend at 1.2%.

For an investment of more than a year I would look at TEVA and use a limit of 54.25. Get out at 49.75. Look for 60 by Q 1. For the more speculative play, I am liking SNTS. This is a really small cap stock but try and get in at 3.15. Protect your bottom at 2.75. Chase a double by this time next year. Be careful as one bad piece of news and this is a one dollar stock.

Is there a worm in that AAPL?

A couple of the options alerts I got are suggesting a November Buy to Open Call at $320 as share for AAPL. AAPL was selling for 316 when I got the alert. That is a good indication that there is still upward momentum in the stock. Some Target prices are in the 240-385 range today. Well the stock got whacked today even with a phenom earnings report. I had three people drop me a note to ask what was going on. We guessed at a huge beat by AAPL at 4.31 a share. They reported a whopping 4.64 a share. BUT they had huge miss on the sales of iPads. Don’t get me wrong, they sold 2 million I believe, but expectations were at 2.5. They had a great quarter and after horus trading is bring the stock below 300 a share. This is a good buying opportunity folks. Do your homework.

In the SL Portfolio

We added to our position in AMZN today bring it to about 1.5%. We converted our $30.00 open calls for WM to long shares. We are enjoying a net unrealized gain of about 6.7% on the long shares as well as 53% realized gain on the options sold a week or so ago. Thank you Lauren, WM has been very good to us!

Our score card today.

We talked about Apple as we called a beat and got a huge beat. I missed the industrial production numbers and they were yucky! (A financial term meaning worse than expected.) That kept the market moribund for most of the day. We got the homebuilder survey correct as it was positive. We called for a beat by IBM of 2.81 and they actually hit 2.82 and we will take that as a good guess. The stack went down in after hour trading and we can only think it is due to top line sales being weak, improved, but weak.

The Road Ahead

Housing starts report tomorrow and I had the luxury of listening to Bloomberg all day and I can tell you the guesses are all over the place. .560-.590 million units is the range. I am going to be pessimistic on this as take it down from last months number of .598 to .571 million units.

There are so many earnings report tomorrow it could be a big market moving day. Here are my guesses with out too much explanation because its late and I’m tired. (I can hear readers now-“He’s tired we are the ones who have to read this crap.”) Goldman Sach’s is expecting 2.28 look for a beat as M & A is doing better than expected 2.32 as share. BAC, the bank I just pulled out of will miss by 2 cents a share having 14 cents a share earnings. KO should have a beat but with all the currency exchange issues, I am not sure. They are looking for 89 cents a share, let’s give it to them and two cents more. My guess is 91 cents a share. JNJ is looking for 1.15 a share and they should beat to 1.20 a share.My crystal ball is fading now so enough.

Many of you did not believe that Betty Presley is a friend and a reader of the blog, so to show that the photo of her next to the guy in the green shirt was not just a fluke, I will share one more photo of Betty.  Below, you will see her to the left of the guy in the red tie.  

Told ya she was a friend and reader.

Salve Lucrum


Anonymous Clark Adams said...

After I've read the part where you've mentioned the data management software, which made me curious, that's why I took a look into it. I guess it's a way of making your records easily accessible. Usually, medical records have to be browsed manually by digging in a steel cabinet, or something. With the technology we have today, data can be made compact. No more paper will be wasted (The trees will be rejoicing).

I thought about this: that software doesn't just help the patients but the medical people as well. I mean, think about it. Through digital data management, accreditation management will be much easier. In any case the digital data would need a backup, it won't eat up any tangible space. If technology keeps up, the hassles in the hospitals and in the clinics would be lessened or better yet, be gone.

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