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: 6/14/98
Peabody Model Trend Prediction
Based on historical PFE patterns, the Peabody Model predicts the following trend direction:
PFE reached a Peabody Valley of 100 3/8 on June 1,1998 and is headed higher to a new Peabody Peak of 119.75 by July 15, 1998.
Commentary
PFE is still riding the Viagra wave. Time and experience will calm the volatility.
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 (6/12/98)......From Today
Last Peabody Valley: * .... 6/01/98 ....100.38.......... -8.2% .................-13
Last Peabody Peak:......... 5/20/98.....114.19..........+4.5% .................-25
* Pending
Forecasted Next Peak ......7/15/98......119.75..........+9.5%............... 31
Forecasted Next Valley....................... 98.00
(If Model is Wrong)
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Peabody Short-term PForecasts
Peabody Short-Term PForecast (6/06/98): PFE: 108.38; DJ: 9,038: Expect a dip with a decline in the holiday shortened reporting of Viagra RXs during the week ending 5/29/98. More roller coaster action can be expected with PFE still heading higher to a Peak.... near the reporting of second quarter earnings (July 15, 1998). It's going to be a great ride.
Mark this down: Within two months you will be kicking yourself on why you did not buy PFE @ 100.
Evaluation of Peabody PForecast: Vague pforecast turned into vague action.....Third thumbs up in a row.
Peabody PForecast Record (65 weeks): 41-23 (63%)
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Peabody Short-Term PForecast (6/1398): PFE: 109.31; DJ: 8,835: PFE should be in a trading range of 104-115 until earnings are released and/or Zeldox is approved. Viagra New Rxs for the week of 6/5/98 will be effected by the 4,000 urologists at the AUA meeting during that week.
Bottom line: PFE should track the general market this week and will head to the peak in about a month. Any large dip will be a buying opportunity.
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Peabody Portfolio
Total return: +90.4% PFE @ 109.31
Annualized return: +87.5%
During the second quarter, 1998, the Peabody Portfolio has added 800 PFE shares to the mythical Peabody Portfolio.
The Peabody Portfolio consists of Mr. Peabody's 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:.....................$371,663
Total Potential Profit:...................$176,425
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:..................$99 to $102
Conservative PFE buying levels: ...............$95 to $99
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Future Actions That Will Effect PFE Trends
Viagra Rx and sales trends:.................... Every Monday throughout 1998
News of Viagra adverse reactions
and drug interactions: .............................Throughout 1998
FDA review of Zeldox: ............................. By June 30, 1998
2nd Qt PFE earnings:...............................July 15, 1998
Launch of Zeldox:.....................................Summer, 1998
European approval of Viagra:......................September, 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 $576 million, a 51% 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 conservative 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
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
Morgan Stanley.................................................$3-5 B (Peak)
OrbiMed............................................................$1 B by 2002
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......................$0.576......$0.382.....+50.7%
*Revised original estimate
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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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