Friday, July 29, 2005

Stem Cell Stocks........... NOT!

All of the stem cell research companies (Stem Cell, Geron and Aastrom Biosciences)are up big today. This is in response to Senator Bill Frist's proposal to expand federal funding for stem cell research. All I can say is that I wouldn't touch any of these companies with a ten foot pole. They're way too speculative. All of the major biotechs are already conducting stem cell research. If you want to invest in stem cell companies, start with the big cap profitable biotechs and stay away from the little ones.

Wednesday, July 27, 2005

Sold Fisher Scientific (FSH)

Today, I decided to take some profits in Fisher Scientific (FSH). This position was purchased over a year ago at $54.15 and sold it today at $65.49 (~21% gain). When I purchased the stock, it was solely for a trade and not for a long term hold. When I go into a trade, I aim for a 20% return. I already have nice positions in the biotech tool makers (Invitrogen and Qiagen). Fisher is a good company, but it's growth is mainly through acquisitions and little organic growth. Fisher's high debt load also worries me a bit. They've been successful employing the growth by acquisition strategy, but sooner or later this will come to an end.

Friday, July 22, 2005

Another Retirement Story

One of my coworker, who is in her late 40's has not even started saving for retirement. She's not enrolled in the 401K plan even though the company offers a company match. Her husband also hasn't started saving for retirement. I can understand that her finances maybe tight with a child in college, but she can start small. When she was asked why she hasn't started saving for retirement. Her answer was "Social Security." She really believes that Social Security will finance her retirement. I just couldn't believe it!

Well, here's a Money Magazine answer to someone, who wants to retire in 13 years, but has not started saving. Click here.

Tuesday, July 19, 2005

Amgen Blow Out

Wow... Amgen just demolished their numbers. Amgen reported after the bell today and beat the street estimates by $0.16. The street was expecting $0.72 and Amgen reported $0.88. The company also raised guidance for the year. Too bad I only have a small position in Amgen!

The biotech group has already taken off and now it's off to the races. First Genentech reported good numbers and raised guidance. Last week Genzyme reported strong numbers and raised guidance. And today we got Amgen's numbers. This was just an excellent quarter for the big cap biotechs. I'm just glad to have a nice position in biotech sector.

Monday, July 18, 2005

Biotech Short Rally?

Looks like the biotech rally last week was caused by short covering. In the July 18 issue of Bio Century, analyst stated that the short interest in the IBB (a biotech ETF) was at a 52 week high in May. The good earnings report from Genentech and Genzyme may have been the catalyst for the shorts to cover. I've never really paid much attention to the short interest, maybe I should. All eyes on Amgen tomorrow...

Friday, July 15, 2005

Another Genzyme Post!?

Yes... another Genzyme post! Genzyme continued to advance on massive volume and closed at a historic high. I happened to catch Jim Cramer's Mad Money and someone asked about Genzyme in the Lightning Round. He rang the register bell (take profits). It's tempting to sell and lock in your gains... Stocks that break out like Genzyme usually trend higher since there's no resistance. You just have to hang on for the ride.

Next week, the big pharmas will be reporting. Amgen / J&J will report on Tuesday and Pfizer on Wednesday. I'll be keeping a very close eye on those earning reports. I'm not too worried about Amgen or J&J, but I'm a bit concerned about Pfizer.

Thursday, July 14, 2005

A Good Day For Genzyme

This morning Genzyme reported very strong numbers. They reported $0.57, which beat the street by $0.04 and raised guidance for the year. The street liked the news and sent the stock up ~6.5% to a new closing high of $65.30. A lot of analyst were expecting the company to miss their numbers because of the strong US dollar. Genzyme derives a big chunk of their sales overseas. The strong dollar did have an impact, but it turned out to be very minimal. I'm going to check out the conference call - boring most of the times, but when you invest in individual stocks - it's a must. You have to do your homework, there's no way around it!

Overall, it was a very good day for all the big cap biotechs (Amgen, Genentech and yes - even Biogen Idec). The biotech exchange traded funds: BBH was up ~ 3% and the IBB was up ~ 1%. If you're going to buy a biotech ETF, go for the BBH (it includes Genentech). The IBB does not include Genentech, it's only composed of the NASDAQ biotechs.

Looking forward to more earning reports... so far... so good!

Monday, July 11, 2005

Classic Investment Books

As I've said before a lot of the current investment books are simply trash. I've learned so much from the old classics. Common Stocks and Uncommon Profits by Philip Fisher is one of my favorites. I've read this book three times and I never get tired of it. His strategy is to buy growth companies and hang on to them for the long term. I've made the most money employing this strategy.
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Speaking of growth companies, what about Genentech (DNA)!? Blew away earnings after the bell, beat the street by $0.04. Next company in my portfolio to report is Genzyme... so we'll see on Thursday.

Thursday, July 07, 2005

Amgen Wakes Up

Amgen (AMGN)showed exceptional strength today. It actually gapped up at the open and just continued rocketing higher throughout the day. This was during the period when the market gapped down on the news of the terrorist attack in London. Amgen closed at $66.93 (up 5.24%), a new 52 week high on very high volume. This is a nice breakout and it's simply going higher. I want add to my Amgen position. I need to find some extra cash!

On the other hand, my Sepracor (SEPR) purchase doesn't look too good at this point. The weekly scripts for Lunesta came out and analyst weren't impressed by the numbers and downgraded the stock. The funny thing is that when analyst start downgrading, that usually signals a bottom for the stock. So I'm going to hang in there a bit longer and see what develops.

Wednesday, July 06, 2005

Value In The Biotech Sector?

I was just glancing through this weeks edition of BioCentury and they had a nice write up on the biotech sector. The sector hasn't done much this year, except for Genentech. There's actually been some M&A activity within the biotech sector. Here are some of the deals mentioned in BioCentury: Pfizer purchased Vicuron for a 84% premium, Shire purchased TKTX for a 22% premium and Glaxo Smith Kline will be purchasing the remainder of Corixa for a 48% premium. These firms obviously see some value based on the premiums they were willing to pay. One of the analyst interviewed says that there's not much fund flows into the biotech sector, a lot of the momentum players have moved into the real estate market. That was a very interesting observation, so what am I trying to say? The biotech sector is cheap right now, there's no hot money in the sector so you're unlikely to over pay for biotechs. Obviously, you have to do some homework in picking the right companies!

I personally would continue to focus on the big cap biotechs and one's that are close to turning profitable (within a year or so). I currently have positions in the following biotechs: Amgen, Genentech, Genzyme and Biogen Idec (I would not buy Biogen Idec until they clear up the Tysabri mess). If you're afraid of selecting individual stocks, go with the ETF's or mutual funds (IBB, BBH or Fidelity Select Biotech). We've entered the earnings season, so there's going to be a lot of action.

Friday, July 01, 2005

Can't We Just Get Along? (JNJ vs BSX)

Just when you thought that JNJ was about to knock out Boston Scientific (BSX), BSX comes right back with a body blow. Today after the bell, the jury found that JNJ infringed on BSX's patent on drug coating stents. No one was expecting BSX to win this one. If you have been following this fight, BSX lost two earlier rounds to JNJ and was gearing up to pay huge damages to JNJ. Analysts were looking at $1 billion in potential damages being awarded to JNJ. Now that's off the tables with today's verdict.

JNJ and BSX just need to get together and hammer out a deal so that both sides can claim victory. Investors hate uncertainty and there's plenty of it in BSX. I have positions in both JNJ and BSX. I'm cheering for both fighters!!

On a side note, I picked up some Novartis (NVS) for my IRA.