Highlights from today's Peabody Report (3/22/98) posted on AOL's Motley Fool Pfizer Board.
Have PFun!
BigKNY3
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Peabody Model Trend Prediction: PFE is headed higher to a new Peabody Peak.
Potential News That Could Effect PFE:
-Viagra NDA Status
-Big Pharma merger discussions
-Valuation/ PE concerns
-Big Pharma momentum
-General market corrections
Peabody Portfolio: +116.0% (Record)
Countdowns: V-Day (Viagra Announcement Day): -9 Days
S-Day (Split Qualifying Day): -37 Days
Highlights: 3/06/98 Peabody Valley of 84 1/8 is confirmed!
Pending Peabody Peak of 92.81 reached on 3/20/98
Target Peabody Peak: 103.71 (4/13/98)
Target Peabody Valley: 82.00 (4/27/98)
The Peabody Report is intended to foster conversation on the PFEr Board. Invest only after conducting your own research.
BigKNY3
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Peabody Model Trend Prediction
Based on historical PFE patterns, the Peabody Model predicts the following trend direction:
PFE is still headed higher to a new Peabody Peak.
The Peabody Model PForecasts PFE will move higher to a new Peabody Peak of 103.71 by April 13, 1998. The current target Peabody Valley is 82.00 by April 26, 1998.
Commentary
After a brief period of predicting a PFE decline, the Peabody reversed its trend prediction on 3/8/98 and looked upwards to a new Peabody Peak. As of last Friday, within two weeks, PFE increased 10.3%. Accordingly, the Peabody Valley of 84.13 (3/06/98) has been confirmed. As Sherman says "Neat, Mr. Peabody!!!!".
As noted in previous Peabody Reports, major breaking market and Big Pharma news will impact PFE including Viagra in the media, market corrections, instability in Asia, recklessness in the Oval Office, and Big Pharma partnerships and merger mania.
Since it is based solely on historical trends, 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 investors with a "buy, hold, and buy more at the Valley" investing strategy.
Peabody Short-term Pforecasts
Peabody Short-Term PForecast (3/15/98): PFE: 86.00, DJ: 8,603: I believe this is the calm before the storm. The countdown has started. However, there may be some jitters until the Viagra approval is announced. Any delay in the FDA approval could effect PFE by at least 10%. If the market environment is positive , PFE should head higher. Expect a trading range of 85 to 89+.
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Evaluation of Peabody PForecast: Great weather pforecast with the storm hitting on Thursday... PFE ranged from 86 to 92...A very big thumbs up.
Peabody PForecast Record (53 weeks): 33-20 (62%)
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Peabody Short-Term PForecast (3/22/98): PFE: 92.25, DJ: 8,906: Media excitement will bring PFE to new heights. Expect an order inbalance on Monday and a delayed PFE opening. However, PFE volume is indicating profit-taking may hit at any hour. Viagra's status has been known to the experts for months. As they said in Hill Street Blues, "Be careful out there". If the market turns south by 3-5%, PFE will follow the crowd as some biggies will try to protect big profits.
Gut feel: I expect one of the wildest weeks in PFE history. With 20/20 momentum and the V-Day Countdown in single digits, PFE should break 95 +. However, programmed profit-taking may take over and a quick reversal could happen at these lofty levels. It should be a lot of pfun!
Peabody Portfolio (+116.0%) PFE @ 92.25
The Peabody Portfolio has now more than doubled. Current open market order is for 200 shares @ 82.25.
The mythical Peabody Portfolio consists of Mr. Peabody's 13 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.
To date, the Portfolio has purchased 2,600 PFE shares at an average price of $42.72 (only 4.1% off the subsequent next PFE Valleys).
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# PFE Shares Purchased: ........ 2,600
Average Price of Purchases:......$42.72
Current Total Value:.............$239,850
Total Costs:.........................$111,063
Total Profit:..........................+$128,788
% Return: +116.0%
% Annualized Return: +100.1%
A history of the 13 PFE purchases and background on Mr. Peabody can be found on the 9/06/97 Peabody Report located on the Pfizer Board.
Suggested PFE Buying Levels
The following suggested PFE buying level is based on The Peabody Model. The aggressive buying price level is used in adding shares to The Peabody Portfolio:
.......................................................3/22/98................ 3/15/98
PFE Buying Level (Super Aggressive): $86.25............ $84.25
PFE Buying Level (Aggressive):...........$82.25 ........... $79.87
PFE Buying Level (Conservative):.........$75.00...........$70.00
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 First quarter, 1998
FDA review of Viagra By March 30,1998
PFE Annual Report Early April, 1998
First Quarter Earnings Mid-April, 1998
PFE Annual Meeting April 23 1998
Possible split announcement April 23, 1998
AUA Meeting-presentation of Viagra data May 30-June 4,1998
FDA review of Zeldox First half, 1998
Launch of Viagra By July, 1998
Launch of Zeldox 1998
Commentary
In a survey of 16 PFErs in early October, 1997 (before the FDA priority review announcement), 100% felt that Viagra will be approved in 1998. The mean date for approval was 4/20/98.
To date, every completed NDA that has been priority reviewed by the FDA has received approval.
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Peabody S-Day Countdown
PFE has split three times in the last ten years ( 2/91, 6/95, and 6/97). The Wayback Machine indicates that PFE will announce 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.
Here is an analysis of a possible PFE split in 1998.
Start of PFE 80s Streak:........................ 1/28/98
# Days PFE has traded in the 80s......... 53
# Days Remaining to Reach 90:........... 37
Forecasted Split Announcemen............. 4/23/98 At the PFE Annual Meeting
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Recent Peabody Short-term PForecasts
Peabody Short-Term PForecast (12/27/97): PFE: 71.94, DJ: 7,679 Expect low volume and a drifting price with a possible strong close to 74+. Thumbs Up.
Peabody Short-Term PForecast (1/04/98): PFE: 75.69, DJ: 7,965 PFE seems to have the mo. Expect some buying prior to the earnings report release in two weeks. PFE will reach 78 sometime next week on its way to a new Peak. Thumbs Up.
Peabody Short-Term PForecast (1/11/98): PFE: 73.94, DJ: 7,508 A-choo! Everyone has the flu. With the media shaking up the market for the 50th time since 1990 "Can this be the start of a bear market", next Monday and the whole week will be volatile. Next week is also earnings week. Even a slight disappointment will drive PFE and all big Pharmas strongly down. Since PFE basic PFundamentals are unchanged, this could be a great buying
opportunity to add to the PFE portfolio.Gut feel: PFE will head down with the declining market. PFE may break the 71 level. A great buying opportunity if you feel the market will stabilize. I do and the Peabody Portfolio has an open order for 200 shares @$70.13. Thumbs Up
Peabody Short-Term PForecast (1/18/98): PFE: 77.00, DJ: 7,754 Big Pharma is hot and PFE is actually lagging the group in 1998. Partly responsible is caution prior to the release of fourth quarter earnings. This will be the week for the announcement! Even a slight disappointment will drive PFE and all big Pharmas strongly down. I expect a strong Tuesday, a pull-back on an earnings report that will not surprise to the upside. Gut feel: despite
the Model's trend direction, the short-term market environment indicates PFE will close lower next week. Thumbs Down
Peabody Short-Term PForecast (1/25/98): PFE: 78.06, DJ: 7,701 I expect a wild week as the forces of Merger Mania meet the realities of breaking news. The State of the Union address on Tuesday will be a major market mover. As the scandal news continues to break, I believe there is a 50% probability that President Clinton will resign during this speech!! Markets will not be happy. PFE will fight the positive forces of the Model and head
lower. Thumbs Down
Peabody Short-Term PForecast (2/01/98): PFE: 81.75, DJ: 7,907 This will be a memorable week for Big Pharma and PFE. The proposed GLX/SBH will drive Big Pharma wild on Monday am before profit-taking hits. Watch out for news coming out of Wednesday's Monsanto (MTC) meeting. If PFE is announced as Searle's marketing partner for its Cox2 antiarthritic (LLY is the other possibility), PFE could hit the Peask this week.
I believe in the model, PFE will head up. Thumbs Up.
Peabody Short-Term PForecast (2/08/98): PFE: 80.88, DJ: 8,149 I expect another volatile week. PFE will be buffeted by the opposite forces of the news; new DJ high (++), Iraq attack(----), Clinton Scandal (-), Big Pharma merger mania (+), and Asian flu (-). You need to pforecast the news short-term in order to pforecast PFE. Given these unknowns, I believe in "The Model" and pforecast PFE will head to the 70s. Be alert for any buying opportunity.
Thumbs Down
Peabody Short-Term PForecast (2/15/98): PFE: 83.63, DJ: 8,370 "Da Model" says down but the market says up. Big PFE and world news could hit any day. (Teaser Headline: News that could move PFE:Marketing partner for Searle's Celebra Cox-2 Antiarthritic). I expect PFE to circle around 80 to 85 for a bit in this short trading week. Still hoping to buy on weakness. Thumbs Up
Peabody Short-Term PForecast (2/22/98): PFE: 87.31, DJ: 8,4114: PFE has the Mo! The Celebra agreement has not been factored into PFE valuations yet. Moreover, the Viagra NDA approval could happen at anytime. Based on this MO, I expect PFE to set a new all-time high this week before profit-taking sets in...Thumbs Up
Peabody Short-Term PForecast (3/01/98): PFE: 88.50, DJ: 8,546: High probability that this is V month! Accordingly, any profit-taking will be short-lived. I expect high volatility until the FDA makes the big announcement. Gut-feel: PFE will trade in a wide range from 85 to 92. Be very alert for any buying opportunity, it could disappear within hours...Thumbs Up
Peabody Short-Term PForecast (3/08/98): PFE: 86.25, DJ: 8,569: The Peabody Model has reversed its course, PFE was ranked #13 in last week's sector growth, and V-Day is approaching... PFE will be on the move and break 90 next week....Thumbs Down
Peabody Short-Term PForecast (3/15/98): PFE: 86.00, DJ: 8,603: I believe this is the calm before the storm. The countdown has started. If the market environment is positive , PFE head higher. Expect a trading range of 85 to 89+. Thumbs Up.
Peabody Short-Term PForecast (3/22/98): PFE: 92.25, DJ: 8,906: Media excitement will bring PFE to new heights. Expect an order inbalance on Monday and a delayed PFE opening. However, PFE volume is indicating profit-taking will hit at any hour. Viagra's status has been known to the experts for months. As they said in Hill Street Blues, "Be careful out there". If the market turns south by 3-5%, PFE will follow the crowd.
Gut feel: I expect one of the wildest weeks in PFE history. With 20/20 momentum and the V-Day Countdown in single digits, PFE should break 95 +. However, at these levels, programmed profit-taking will take over and a quick reversal could happen. It will be a lot of pfun!
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The Peabody Model (3/22/98)
A complete history of The Peabody Model can be found on the 9/06/97 Peabody Report located on the Pfizer Board. The updated major findings of the Model are as follows:
1. Since 1990, there has been a cyclical nature to PFE prices related to intermediate high PFE prices (Peabody Peaks) and intermediate low PFE prices (Peabody Valleys). For those engineers and math teachers out in cyberland, it looks like a sine curve that is consistently moving higher. Since 1996, the average increase from a Valley to Peak was +24.6%. The average decline from Peak to Valley was 12.7%, the risk when you purchase PFE at an all-time high.
2. On Peabody Peak and Valley trading days, daily PFE volume is significantly higher than the average daily moving average. This volume effect usually lasts for 1-7 days. Moreover, there is a significant difference between the intraday PFE highs and lows for Peabody Peaks and Valleys as compared to average trading days. Note, there is more profit-taking at Peaks as compared to selling at Valleys.
3. There is a direct relationship (correlation) between PFE and the general market (r=.55). As the market goes, so goes the direction of PFE. The minute by minute PFE price movement versus the Dow Jones almost always matches.
4. Only 20% of PFE's price movement is related to the PFundamentals of Pfizer. Approximately 50% is related to the Big Pharma environment (r=.76) and 30% is related to the general market direction. Since Big Pharma is also correlated to the general market, 80% of PFE movement results from Pfundamentals that are not even related to the company.
5. Major pharm companies move together. Regression analysis has confirmed this group movement. PFE moves with SGP, BMY, LLY, MRK and ABT (all r>.55) and least like SBH, WLA, its Lipitor partner, AMGN, AHP, GLX and PU (r<.50). |
