The Peabody Report: September 27,1998
The Peabody Report is intended to foster conversation on the PFEr Board.
Comments are welcome and encouraged.
Invest only after conducting your own research.
Have PFun!
BigKNY3
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Peabody Peak/Valley Status
Peabody Peaks and Valleys since 1/90 (Updated 9/23/98)
www3.techstocks.com
Chart of Peabody Peaks and Valleys with Moving Averages dailystocks.net
Useful PFE Links
-3 year PFE chart versus the Dow growth. control.bigcharts.com
-6 Month PFE Chart with Da Bollinger Bands Playing 207.95.154.130
-5 Year PFE Price Chart
news.com
-Peabody PFE Price History (1987-1998) (Updated: 9/03/98)
www3.techstocks.com
-Compare PFE with Other Stocks and Indexes
quicken.com
The Peabody Model
-The Peabody Model: History and Findings (Updated: 7/18/98)
The Market Environment
-Briefing.com- Reviews current market environment
briefing.com
-World Markets
quote.yahoo.com
Investment Advice
-26 Weeks to Successful Investing- IBD
ibd.infostreet.com
- 8 easy ways to lose your shirt in stocks
usatoday.com
Peabody Model Trend Prediction
Based on historical PFE patterns, the Peabody Model predicts the following trend direction:
In the most volatile year in this decade (see history below), PFE reached a new Valley of 95 last Monday with the release of the Clinton tapes. Just as quickly, PFE reversed and headed to a new Peak. Da Model predicts the positive trend will continue with a new Peak target of 111.60 by October 5, 1998.
Commentary
Last week the Model predicted a target Valley of 92.25 , just 2.9% from the actual Valley of 95.00 reached last Monday.
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 (9/25/98)......From Today
Last Peabody Peak*:..... 9/24/98......108.75..........+1.9% ...................-3
Last Peabody Valley: ... 9/21/98 ......95.00.......... -11.0% ...................-6
* Pending
Forecasted Next Peak....10/05/98.....111.60..........+4.6%............... ....9
Potential Peak Strike Price.............. 104.50...........-2.1% (Note: Strike price already reached)
Forecasted Next Valley................... 96.93............-9.2%%..................
(If Model is Wrong)
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Peabody Peaks and Valleys History (1990-1998)
Here is a summary of the 67 Peaks and Valley since 1990:
........... #..............%..................#................%
......Peabody.....Average ........Peabody.......Average
......Valleys.......Decline............Peaks........Increase
1990.... 2......... -20.3%..............2...............39.4%
1991.... 0................-.................1................168.8%
1992.... 3..........-15.8%..............3.................16.1%
1993.....4..........-20.7%..............4.................23.3%
1994.....1..........-24.5%..............-...................-
1995.....2..........-10.2%..............3.................47.1%
1996.... 6..........-12.1%..............5.................21.0%
1997.....5..........-14.8%..............5.................32.3%
1998.....10.........-11.2%.............11...............16.3%
........... 33.........-14.4%.............34................28.4%
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Peabody Short-term PForecasts
Peabody Short-Term PForecast (9/20/98): PFE: 97.13, DJ: 7,896: The Clinton tapes will be released on Monday...along with expected lower V Rxs due to the Labor Day Holiday. Expect a new Valley near 92-93 before making a drive prior to the 3rd quarter earnings release.
Evaluation of Peabody PForecast: Peabody Valley of 95 was reached during the Clinton tape broadcast....PFE quickly reversed and went back into drive....Thumbs up.
Peabody PForecast Record (80 weeks): 51-29 (64%)
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Peabody Short-Term PForecast (9/27/98): PFE: 106.69, DJ: 8,029: This should be a big week for PFE. A quarter point reduction from the Fed and end of the quarter window portfolio window dressing will pull PFE above 110 for the first time since August 4, 1998.
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Peabody Portfolio
Total return:........................................+65.9% PFE @ 106.69
Annualized return:...............................+64.2%
% of Peabody purchases in the black... 88% (21 out of 24)
The Peabody Portfolio consists of 24 PFE purchase recommendations listed on the PFEr Board since August 14, 1996. To date, the Portfolio has purchased 4,000 PFE shares at an average price of $64.33 (only 2.9% off the subsequent next PFE Valleys).
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# PFE Shares Purchased:.......... 4,000
Average Price of Purchases:....... $64.33
Total Costs: ...............................$257,313
Total Market Value:.....................$426,760
Total Potential Profit:...................$169,448
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
7/06/98 :........100 .........$106.00
7/29/98 :........100 .........$110.50
8/05/98 :........100 .........$104.00
8/07/98 :........100 .........$102.63
8/11/98..........100..........$100.00
9/01/98..........100..........$97.63
Total:............4,000.........$64.33
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Suggested PFE Buying Levels
The following suggested PFE buying levels are based on The Peabody Model. The 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:
:..................$94 to $97...........Updated: 9/27/98
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PFuture Actions That Will Effect PFE Trends
Viagra Rx trends:..................................... Every Monday throughout 1998
News of Viagra adverse reactions
and drug interactions: ...................................Throughout 1998
Major analyst's Upgrades/Downgrades............Throughout 1998
Federal Reserve Interest Rate Meeting...........September 29, 1998
Initial reports of Viagra international sales.......September-October, 1998
Third Quarter Earnings Report.......................October 14, 1998
PFE R&D Meeting........................................October 29, 1998
ACC/AHA Report on Viagra...........................December 1998
FDA Approval of Celebra...............................February 24, 1999
ED news in the media: ................................Throughout 1998
Japanese approval of Viagra .........................First half, 1999
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Peabody V-Files
Viagra sales for the second quarter, 1998 were $411 million, the highest recorded sales for a new pharmaceutical product during its first three months on the market.
Analysts estimate that Viagra will have 1998 sales of $0.946 billion, a 30.5% increase over earlier estimates.
............................................1998 Est...1998 Est
...........................................(Billions)....(Billions)..... Comments
NationsBanc........................$1.100.......$0.759...... $.205B (international)
Credit Suisse First Boston.....$1.100.........................$1.7B (1999)
Morgan Stanley....................$1.010..........................$4.8B (2004)
Alex Brown .........................$1.000.......$0.750..... $1.2B (1999)
Deutsche Bank ....................$1.000 ......$0.750..... $1.75B (1999)
Gerard Klauer........................$1.000......$0.300.... $2.9B (2000)
Gruntal ................................$1.000......$1.000.... $8 B peak (2005)
Alex Brown............................$1,000........................$1.2B (1999)
Cowen...................................$0.850........................$5B+ (2002)
Morgan Stanley......................$0.836.........$1.010........$1.7B (2000)
Furman Seltz.........................$0.811........................Only $100M in 3rd Qt
Bear Stearns..........................$0.800......$0.600 ......$200M in 3rd Qt
Merrill Lynch...........................$0.750 .....$0625......
Consensus...........................$0.946.......$0.724
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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 usually announces 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, the PFE CEO stated they will consider requesting additional authorized shares from shareholders later this year. Bottom line, a 3-1 PFE split announcement will be made in late 1998 or early 1999.
A request for additional authorized shares was apparently not made by the Board on July 23, 1998.
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