Ambryam,
Ambryam said, "IMO this means that the stock has been moving in to ever stronger hands. It is has declined on very small volume and when things get good people will have to pay to get this stock."
I agree, and think much of Quidel's decline is due to year end tax selling and margin calls.
While overall the stock market's up for the year, many investors will take advantage of capital loss opportunities in 1997 by selling their under-performers before the end of the year. Many investors will also delay selling appreciated stocks till 1998 to delay capital gains another year. Quidel and many other biotech stocks are obviously year end sell candidates, and, of course, the more selling pressure, the lower the price. Yet, after the new year arrives and many investors begin taking profits, they'll be looking for the bargains. If Quidel performs as the analysts are forecasting, it's sure to be a bargain target at its current price.
In an 18 December 1997 Microsoft Investors Interview: Playing the IRS Strategy (http://investor.msn.com/home.asp ), James Pizzo recommends "tax bounce" investing. He explains: "These are stocks that have under-performed the market over the course of the year, or which have recently pulled back from their highs and are candidates for year-end tax loss selling. I choose them by looking for stocks that are near their 12-month lows, or that have had at least a 40% decline from their recent highs. So as the year winds down, they could be under pressure. And we think that once tax-motivated selling abates, investors will again look at these stocks. We continue to like the fundamentals going forward on the seven companies we've highlighted in this category."
James also says, "looking at specific sectors, a couple of areas that I like here are the utility stocks and some of the biotechnology stocks."
Mike |
