Highlights from The Peabody Report posted on AOL's Motley Fool Pfizer Board:
The Peabody Report is intended to foster conversation on the PFEr Board.
Invest only after conducting your own research.
Have PFun!
BigKNY3
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The Peabody Report: 4/26/98
Peabody Model Trend Prediction
Based on historical PFE patterns, the Peabody Model predicts the following trend direction:
PFE reached a quick Peabody Valley last week and is headed higher to a new Peabody Peak.
Commentary
This month will be a real test of the Peabody Model under extraordinary conditions. The launch and publicity associated with Viagra is unprecedented in the pharmaceutical industry. Will "Da Model " predict PFE's pfuture direction under the Viagra Revolution conditions? We'll have to wait and see.
Spurred by a Viagra-induced PFE buying fenzy, the predicted Peabody Peak was reached on Tuesday (4.5% higher than the pforecasted Peak of 116.50).
In a high volume, volatile market, a pending Peabody Valley of 111 5/16 was reached the next day. If this Peabody Valley is confirmed, it will be the first time that a Peak and Valley were reached on consecutive days. Mmmm, an indicator of more volatile days ahead?
As noted in previous Peabody Reports, major breaking market and Big Pharma news could impact PFE including; quarterly earnings reports, Viagra New Rxs and sales reports, Viagra in the media, unexpected Viagra adverse reactions, market corrections, instability in Asia, and Big Pharma partnerships and merger mania.
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.
Peabody Short-term PForecasts
Peabody Short-Term PForecast (4/19/98): PFE: 105.19, DJ: 9,168: Monday will be a wild day in PFErland with Viagra Rxs announced to the world. The Annual meeting of PFErs on Thursday will make news headlines on Friday. Peabody Gut-Feel: Viagra and PFE have the mo! Shorts and sellers will not be happy. PFE will hit 110 before profit-taking comes back strong. Still...should be an up and very volatile week.
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Evaluation of Peabody PForecast: Overall, the pforecast was right on target, but the Peak reached 121.75 before profit-taking took place. Even though a 5% gain was predicted...too low so...Thumbs down.
Peabody PForecast Record (58 weeks): 37-21 (64%)
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Peabody Short-Term PForecast (4/26/98): PFE: 118.25, DJ: 9,065: The eyes of the investment world are on PFE while the ears of the world are on news about Viagra. Expect another gap up on Monday. Then, anything can happen. The difference between the Top 3 and The Bottom 10 in Big Pharma indicates Big Pharma may be correcting. New correlations in Da Model indicate PFE, WLA and SGP may be taking their own path.
Gut Feel: A new Peabody Peak is guaranteed this week. However, as PFE moves higher, the volatility and risks increase. Expect 125 to be broken!
Peabody Portfolio (+153.8%) PFE @ 118.25
The Peabody Portfolio has more than doubled in less than two years. The return is currently at a record level.
The mythical Peabody Portfolio consists of Mr. Peabody's 14 aggressive PFE purchase recommendations listed on the PFEr Board since August 14, 1996 . A total of 200 shares (100 shares pre-split) were purchased at each recommendation. The last purchase was 200 shares @ $97.00 made on 4/16/98.
To date, the Portfolio has purchased 2,800 PFE shares at an average price of $46.59 (only 3.7% off the subsequent next PFE Valleys).
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# PFE Shares Purchased: 2,800
Average Price of Purchases: $46.59
Future Actions That Will Effect PFE
ED news in the media Throughout 1998
Asia, Iraq and Clinton news Throughout 1998
News of Trovan's acceptance Second quarter, 1998
Viagra Rx and sales trends Throughout 1998
AUA Meeting-presentation of Viagra data May 30-June 4,1998
FDA review of Zeldox June, 1998
European approval of Viagra September, 1998
Launch of Zeldox July, 1998
Peabody V-Files
Analysts' Estimates of Viagra Sales:
Last week, Merrill Lynch revised their Viagra estimates to $625 million in 1998 (up from $350 million) and to $1.3 billion in 1999 (up from $730 million)
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Peabody S-Day
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.
As noted last week, it was pforecasted that the probability of a split was reduced to only 50%. This % declined reflected the sharp rise in PFE.... that would render a 2-1 split undesirable.
At the Annual Meeting, PFE stated they will consider requesting additional authorized shares from shareholders later this year.
Bottom line, the next split will be 3-1 in the Fall, 1998 or March, 1999.
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