to any and all interested people in avei.
food for thought:
1. avei has had a spectacular run up in the last 6-8 months.
2. all the good news about this company, i.e. earnings, fda approval, good results in the cath lab, outstanding reputation amongst cardiologists, etc... is all out.
3. johnson and johnson has been downgraded in the recent past because of concerns about guidant (gdt) taking away market share.
4. jpm lowers rating on avei.
5. avei plummets over 14 points (15%) on downgrade.
this little bit of history suggest something that I have been talking about for a while now.
J&J are losing stent market share to gdt, and avei has the best stent on the market. jpm did what j&j couldn't, which is making avei a more palatable entree by causing its price to fall.
now that avei has lost a little of its luster, and as we all know is a one product company, look for it to drift into the 40's and hover there despite excellent earnings growth (with the occassional run up or down). J&J will then buy out the company at 70-80 (instead of the earlier 80-100 i had suggested) and reclaim lost market share from gdt.
well that's my theory anyways, supported by recent price swings in gdt, avei and j&j. i still hold to the buyout theory of avei, though i don't know when because of two reliable sources: J&J reps who own a lot of avei stock.
by the way, every cardiologist i know has ditched the j&j stents and is now committed to gdt or avei stents.
translation: gdt will have a breakout earnings report this quarter, even better than the upward revised forecast of recent days. |
