The Peabody Report: October 24,1998
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 (Updated 10/24/98)
Message 6146751
Peabody Model Trend Prediction
Based on historical PFE patterns, the Peabody Model predicts the following trend :
On Friday, PFE reached a pending Peak of 104.50 passing the target of 103.36 by only 1%. Da Model predicts that PFE will reverse and decline to a new Valley of 92.26 by November 13, 1998.
Commentary
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 (10/23/98)......From Today
Last Peabody Peak*:..... 10/23/98......104.50..........+1.0% ...................-1
Last Peabody Valley: .....10/14/98......88.50.......... -14.5% ....................-10
* Pending
Forecasted Next Valley....11/13/98.....92.26..........-10.9%......................20
Potential Peak Valley Price.............. 96.14...........-7.1%
Forecasted Next Peak................... 109.73............+6.0%..................
(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.....12.........-11.8%.............13...............16.2%
........... 35.........-14.4%.............36................27.7%
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Peabody Short-term PForecasts
Peabody Short-Term PForecast (10/18/98): PFE: 98.44, DJ: 84,17: With the PFE 3Q Earnings Report put to bed, price action will be effected by momentum, the market and other Big Pharma EPS reports (WLA and LLY). Given the positive vibes in the market place, Da Gut Feel will follow the Model to a new Peak of 103 this week... Caveat: I'm a half-full person and this market is explosive.
Based on the Peabody Model Dow Amendment, here are the PFE predictions assuming 5% increases or decreases in the Dow:
..........................................................Predicted...........% Change
....................................Dow Level........PFE Price.....From Current Price
5% increase in Dow .......8,838..............106.65...............+8.3%
5% decline in Dow..........7,996................94.06...............-4.4%
Evaluation of Peabody PForecast: A big thumbs up!!
Peabody PForecast Record (84 weeks): 53-31 (63%)
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Peabody Short-Term PForecast (10/24/98): PFE: 103.50, DJ: 8452: After a very strong two weeks, PFE is due for a new round of profit-taking. Expect a tough week with any negative news pulling PFE down around 97.
The Peabody Model Dow PForecasts
Based on the Peabody Model Dow Amendment and the current Dow of 8,452, the currented predicted PFE price is: 100.88, 2.5% below the actual close of 103.50.
Here are the PFE predictions assuming increases or decreases in the Dow:
..Increase/Decrease..............................Predicted...........% Change
..In Dow........................Dow Level........PFE Price.....From Current Price
.....+5% .................. .......8,875..............107.20...............+3.6%
.....+3% .................. .......8,706..............104.67...............+1.1%
.....+0% .................. .......8,452..............100.88...............-2.5%
......-3% .................. .......8,198..............97.09.................-6.2%
......-5% .................. .......8,029..............94.57.................-8.6%
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Peabody Portfolio
Total return:........................................+56.4% PFE @ 103.50
Annualized return:...............................+57.4%
% of Peabody purchases in the black... 78% (21 out of 27)
The Peabody Portfolio now consists of 27 PFE purchase recommendations listed on the PFEr Board since August 14, 1996. To date, the Portfolio has purchased 4,300 PFE shares at an average price of $66.18 (only 3.5% off the subsequent next PFE Valleys).
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# PFE Shares Purchased:.......... 4,300
Average Price of Purchases:....... $66.18
Total Costs: ...............................$284,563
Total Market Value:.....................$445,050
Total Potential Profit:...................$160,488
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
10/06/98.........100..........$94.00
10/09/98.........100..........$89.00
10/14/98.........100..........$89.50
Total:............4,300.........$66.18
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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.
:..................$86 to $94...........Updated: 10/18/98
New or pfuture PFErs could consider investing 50% immediately and investing the
remainder at or 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
Initial reports of Viagra international sales.......October, 1998
PFE R&D Meeting........................................November 6, 1998
ACC/AHA Report on Viagra...........................December 1998
FDA Advisory Panel on Celebrex......................December-January, 1999
FDA Approval of Celebrex...............................February 24, 1999
News of Viagra adverse reactions,
drug interactions, and labeling revisions: ........Throughout 1998
Major analyst's Upgrades/Downgrades............Throughout 1998
ED news in the media: ................................Throughout 1998
Approval of Viagra in Japan.. .........................First half, 1999
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Peabody V-Files
Viagra sales for the first six months on the market were $524 million, the highest recorded sales for a new pharmaceutical product during its first six months on the market.
As of 10/11/98, analysts estimate that Viagra will have 1998 sales of $0.934 billion, a 27.5% increase over earlier estimates. Expect analysts forecasts to be revised downward based on the 3Q earnings report.
............................................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
JP Morgan..............................$0.800.......$0.800.......$1.925B (2001)
Merrill Lynch...........................$0.750 .....$0625......
Consensus...........................$0.934.......$0.733
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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 Peabody Model
-The Peabody Model Amendment #1: The Influence of the Dow (Updated: 10/17/98)
www3.techstocks.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 |
