if you were a pro in the typical sense of the word, and you made directional plays, then you probably either played a numbers game (looking at stochastic distributions of similar situations in the past and playing the positive expectation side) or you played a momentum game where you attempted to determine where the consensus was headed and act early.
to be sure, on a biotech stock run-up most-often the smart money gets out, even goes short, because the numbers say the stock will probably soon return to old levels.
typically, the new money runs-in on publicized news of success of wonder-drug development, but as the long-term, stable money doesnt touch these stocks (until they have earnings) unless at venture-round valuations, there is nothing to prevent profit-taking and lack-of-interest from pushing these types of stocks back down . . . . as intervals between developments of import are quite long by the trader's timeframe.
however, i believe agph to be quite different: i believe a lot of bigger players who should have been in the stock around the 30-40 level did not catch on to what a winner viracept is and had to buy at much higher levels. i dont think these guys are looking to get out. i dont think it's all hot money holding the stock up. from my research viracept is clearly superiour to other pi, the sales force is very, very savvy, very smart deals have been done with japan tobacco and roche, and the transition into a revenue-positive , earnings-positive realm is happenning on growing momentum - not a one-time, step-function graph.
i doubt agph will significantly break 70 ever again. playing stochastic distributions is fine if you dont have time to research the stocks; but if you do have time to do the research . . . . beware.
given agph has a provable revenue stream, why would they do a lousy secondary? they already did one and got burned ($30 late last year). why would they make that mistake now that they have proven the validity of their product line? |
