The Peabody Report: 7/05/98
The Peabody Report is intended to foster conversation on the PFEr Board. Comments are encouraged and appreciated.
Invest only after conducting your own research.
Have PFun!
BigKNY3
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Peabody Model Trend Prediction
Based on historical PFE patterns, the Peabody Model predicts the following trend direction:
PFE reached a pending Peabody Peak of 114.94 on June 18,1998 and is still headed higher to a new Peabody Peak of 119.75 by July 15, 1998.(6/21/98)
Commentary
Only 9 days left to the Peak PForecast. However, if PFE falls to 105.75, it would establish a new Peabody Valley and confirm the 6/18/98 Peabody Peak of 114.94.
Since it is based primarily on historical trends and Mr. Peabody "gut feels", the Peabody Model should always be placed in context of the market environments and anticipated news. As evidenced by the mythical Peabody Portfolio (see section below), the Peabody Model works particularly well for PFE investors with a "buy, hold, and buy more at the Valley" investing strategy.
New or pfuture PFErs could consider investing 50% immediately and investing the
remainder at near Peabody Valleys.
......................................PFE.........................% Chg from...............# Days
.....................................Date.........Price.......Last Price (7/02/98)......From Today
Last Peabody Valley: .... 6/01/98 ....100.38.......... -6.6% ...................-35
Last Peabody Peak*:..... 6/18/98......114.94..........+6.9% ...................-18
* Pending
Forecasted Next Peak ......7/15/98....119.75..........+11.4%.................. 9
Forecasted Next Valley....................... 102.00
(If Model is Wrong)
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Peabody Short-term PForecasts
Peabody Short-Term PForecast (6/27/98): PFE: 111.94; DJ: 8,944: Only two working days left for the second quarter. I anticipate a strong move upward this week past 115 in anticipation of record second quarter earnings.
Evaluation of Peabody PForecast: Viagra WSJ media concerns raised doubts in investors' minds . Thumbs down ....breaking a Peabody streak.
Peabody PForecast Record (68 weeks): 44-24 (65%)
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Peabody Short-Term PForecast (7/05/98): PFE: 107.50; DJ: 9,025: PFE is stuck in the winds of Viagra media attention. In the short-term, expect volatility depending on the news accounts on a given day. Over time, calm will be restored and the media will concentrate on their next hot story.
Since PFE 2nd quarter earnings and Viagra sales report are only 9 days away, this week should be exciting for PFE. Monday's Viagra Rxs may ignite an explosion in either direction providing either PFEr smiles or a great buy opportunity (more smiles for long-termers). If there is any dip, expect an addition to the Peabody Portfolio. When PFE breaks resistance @ 115, the move to 120 will be very quick. Gut feel: PFE will dip early in the week before rallying above 111.
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Peabody Portfolio
Total return:........................................+87.2% PFE @ 107.50
Annualized return:...............................+79.8%
% of Peabody purchases in the black... 94%
During the second quarter, 1998, the Peabody Portfolio added 800 PFE shares to the mythical Peabody Portfolio. (Average price 105.21)
The Peabody Portfolio consists of 18 aggressive PFE purchase recommendations listed on the PFEr Board since August 14, 1996.
To date, the Portfolio has purchased 3,400 PFE shares at an average price of $59.98 (only 3.5% off the subsequent next PFE Valleys).
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# PFE Shares Purchased:.......... 3,400
Average Price of Purchases:....... $59.98
Total Costs: ...............................$195,238
Total Market Value:.....................$365,500
Total Potential Profit:...................$170,263
Date............#..........Purchase
Purchased...Shares...Price
8/14/96:..... 200 ........$36.38
10/25/96:....200 .........$40.44
12/4/96:......200..........$41.69
12/12/96:.....200.........$40.50
12/16/96:.....200.........$40.44
12/31/96:....200..........$41.50
1/2/97:........200.........$40.94
1/28/97: ......200..........$42.38
2/28/97:.......200...........$45.69
3/24/97:.......200...........$44.88
3/27/97:.......200...........$42.81
3/31/97:........200..........$42.56
8/8/97:..........200..........$55.13
4/16/98:........200...........$97.00
4/27/98:........200...........$113.00
5/7/98:..........200...........$107.50
5/15/98:.........100..........$105.00
5/27/98 :........100 .........$101.75
Total:............3,400...........$59.98
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Suggested PFE Buying Levels
The following suggested PFE buying levels are based on The Peabody Model. The aggressive buying price level is used in adding shares to The Peabody Portfolio. However, depending upon market conditions an immediate purchase could be made at any time:
Aggressive PFE buying levels:..................$102 to $106
Conservative PFE buying levels: ...............$97 to $101
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Future Actions That Will Effect PFE Trends
Viagra Rx trends:..................................... Every Monday throughout 1998
News of Viagra adverse reactions
and drug interactions: ...................................Throughout 1998
2nd Qt PFE earnings and Viagra sales report..July 15, 1998
FDA re-review of Zeldox: .............................. Late July, 1998
Launch of Zeldox:.........................................1999 (?)
International approval of Viagra:.................September- December, 1998
PFE R&D Meeting.....................................October 29, 1998
ED news in the media: .............................Throughout 1998
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Peabody V-Files
Analysts' estimates of Viagra 1998 sales average $583 million, a 37% increase over the original estimates made prior to approval.
At the current specification rate, it is estimated that Viagra is selling at a rate of $90 million per month. Accordingly, a 1998 Viagra sales forecast is $810 million.
..............................Current......... Original
..............................1998 Est.......1998 Est
..............................(Billions)........(Billions)....Comments
Gruntal*....................$1.000.......................Peak annual sales of $4.5 B
Everen.......................$0.850......................$1.4 B (1999)
Mehta Partners..........$0.800
Nation Banc *.............$0.800......$0.400......$1.9M in 99,Up to $6B in peak year
OrbiMed**...................$0.700.....$0.850........$1 B by 2002
Salomen Smith Barney*$0.655...................$2.1 B (1999), $5.750 B (2002)
Schroder*...................$0.635.....................$1.2 B (1999),$3B (2002)
Merrill Lynch*.............$0.625.....$0.350.......$1.3 B ( 1999)
Bear Stearns*.............$0.600.... $0.400........$1.2 B (1999)
PaineWebber.............$0.600......$0.600........$1.2 B (1999)
HKS & Co .................$0.500.....$0.500........Estimate will be grossly revised
Standard & Poor's.......$0.400.....$0.400........$3.0 B by 2002
Hambrecht & Quist.....$0.345.....$0.345........ $.700 B (1999)
Deutsche Morgan........$0.300.....$0.300
Gerard Klauer............. $0.300....$0.300...........$788 M (1999)
AG Edwards................$0.225....$0.225............. Reaching $1.0 B in 3-4 years
Furman Selz.....................................................$2 B (2002)
Morgan Stanley.................................................$3-5 B (Peak)
ABN-AMBRO......................................................$1.8 B (2001)
Americal...........................................................$10 B over 5 years
Cowen..............................................................$2.5 B +(2001)
Goldman Sachs ...............................................$1.5 B by 1999
Average......................$0.583......$0.425..........+37.4%
* Revised original estimate upward
**Revised latest estimate downward
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PFE Stock Splits
PFE has split three times in the last ten years ( 2/91, 6/95, and 6/97). The Wayback Machine indicates that PFE has announced a 2-1 split if PFE trade above 80 for 90 consecutive days. In the January, 1998 survey of 22 PFErs, only 43% felt that PFE will split in 1998.
At the PFE Annual Meeting on April 23, 1998, management stated they will consider requesting additional authorized shares from shareholders later this year. Bottom line, the next PFE split will be 3-1 in the Fall, 1998 or March, 1999.
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