The Peabody Report: October 4,1998
The Peabody Report is intended to foster conversation on the PFEr Board. Comments are welcome and encouraged. Invest only after conducting your own research.
Note: possible PFE buying and selling strategies are discussed in this report.
Have PFun!
BigKNY3
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Peabody Peak/Valley Status
Peabody Peaks and Valleys During the 1990s (Updated 10/04/98)
www3.techstocks.com
Peabody Model Trend Prediction
Based on historical PFE patterns, the Peabody Model predicts the following trend :
After reaching a Peabody Peak on Monday (109.19), PFE followed the market down reaching a pending Peabody Valley on Friday (96.50). Da Model predicts PFE will head higher to a predicted Peabody Peak of 112.89 by October 16, 1998.
Commentary
1998 continues to be the most volatile PFE year in this decade. The recent Peak of 109.19 was only 2.2% off the predicted Peak of 111.60. The current pending Valley of 96.50 was only 0.4% off the predicted Valley of 96.93.
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.
......................................PFE.........................% Chg from...............# Days
.....................................Date.........Price.......Last Price (10/02/98)......From Today
Last Peabody Peak:..... 9/28/98......109.19..........+10.2% ...................-6
Last Peabody Valley*: ...10/02/98......96.50.......... -2.6% ....................-2
* Pending
Forecasted Next Peak....10/16/98.....112.89..........+13.9%............... ....12
Potential Peak Strike Price.............. 106.15...........+7.1%
Forecasted Next Valley................... 91.68............-7.5%..................
(If Model is Wrong)
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Peabody Peaks and Valleys History (1990-1998)
Here is a summary of the 68 Peaks and Valleys in this decade:
........... #..............%..................#................%
......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.....11.........-11.3%.............11...............16.4%
........... 34.........-14.3%.............34................28.4%
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Peabody Short-term PForecasts
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.
Evaluation of Peabody PForecast: PFE just missed 110 on Monday before reversing with the market as a result of the disappointment on the quarter point Fed reduction and world economic concerns... Thumbs down
Peabody PForecast Record (81 weeks): 51-30 (63%)
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Peabody Short-Term PForecast (10/04/98): PFE: 99.13, DJ: 7,785: Recent action confirms one of the Model's principles that 80% of PFE's price trends results from market and Big Pharma pfundamentals..not directly related to PFE.
Expect PFE to test the pending Peabody Valley of 96.50 before reversing and then head higher prior to the third quarter earnings release (due anytime from 10/08/98 to 10/14/98). Gut feel: Next Friday PFE will close above 104.
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Peabody Portfolio
Total return:........................................+54.1% PFE @ 99.13
Annualized return:...............................+51.7%
% of Peabody purchases in the black... 67% (16 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:.....................$396,500
Total Potential Profit:...................$139,167
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 Strategies
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...Note: Reached on 10/02/98 (96 1/2)
New or pfuture PFErs could consider investing 50% immediately and investing the
remainder at near Peabody Valleys
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Suggested PFE Selling Strategies
Selling of PFE is recommended if a major PFE or market pfundamental significantly changes.
If you need to raise capital by selling PFE, one suggested selling strategy is to set a 50% market sell order at a level 8% higher than the last Peabody Valley. After a period of one month evaluate the results of this action and consider selling the remaining 50%...once again at a level 8% higher than the latest Peabody Valley reached during that month. You should also take into account possible pfuture actions that may effect PFE trends (see below).
PFuture Actions That May 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
Initial reports of Viagra international sales.......October, 1998
Third Quarter Earnings Report.......................October 8-14, 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.
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 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 |
