Highlights from The Peabody Report placed on AOL's Motley Fool Pfizer Board.
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: 5/17/98
Peabody Model Trend Prediction
Based on historical PFE patterns, the Peabody Model predicts the following trend direction:
PFE reached another Peabody Valley last Friday and is headed higher to a new Peabody Peak.
Commentary
In the face of continuing great news about the record-breaking Viagra specification, PFE has declined 14.2% off the 4/21/98 Peabody Peak. The primary reason for the decline is the expected PFE profit-taking, concerns about PFE's valuation and the "unknowns" associated with Viagra (adverse reactions in a large patient population, efficacy, specification, and reimbursement). During the last 25 days, PFE has failed to rally and continued to make a deeper Valley.
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 (5/15/98) From Today
Last Peabody Valley * 5/15/98 104.44 -0.0% -2
Last Peabody Peak 4/21/98 121.75 +16.6% -26
* Pending
Forecasted Next Peak 6/08/98 124.00 +18.7% 23
Forecasted Next Valley 99.00 -5.2%
(If Model is wrong)
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Peabody Short-term PForecasts
Peabody Short-Term PForecast (5/10/98): PFE: 111.13, DJ: 9,055: Analysts' estimates of the impact of Viagra on PFE's EPS are understated. When reality hits, PFE will jump 10%. Expect Viagra 4th week New Rxs of 250,000 and a possible jump due to the anticipated NEJM article on Thursday. I expect PFE to pass 115+.
Evaluation of Peabody PForecast: Peabody is again ahead of the market.. Bad excuse..Thumbs down.
Peabody PForecast Record (61 weeks): 37-23 (61%)
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Peabody Short-Term PForecast (5/17/98): PFE: 104.44, DJ: 9,096: With the Friday options out of the way and an estimated Monday Viagra Rx report of 300M +, PFE is poised to reverse the current negative momentum. In the face of such positive Viagra news, only a correcting market can keep PFE down. Be on the lookout for buying opportunities. Expect a close above 108.
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Peabody Portfolio (+85.1%) PFE @ 104.44
In the last four weeks, the Peabody Portfolio has added 700 PFE shares to the Portfolio including a purchase off 100 shares last Friday.
The mythical Peabody Portfolio consists of Mr. Peabody's 17 aggressive PFE purchase recommendations listed on the PFEr Board since August 14, 1996 . To add flexibility to the Portfolio, blocks of 50-200 shares can be purchased at each recommendation.
To date, the Portfolio has purchased 3,300 PFE shares at an average price of $57.52 (only 3.8% off the subsequent next PFE Valleys).
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# PFE Shares Purchased: 3,300
Average Price of Purchases: $57.52
Total Costs: $185,063
Total Market Value: $344,644
Total Potential Profit: $159,581
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
Total 3,300 $57.52
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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. However, depending upon market conditions an immediate purchase could be made at any time:
Aggressive PFE buying levels: $101 to $105
Conservative PFE buying levels: $95 to $100
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Future Actions That Will Effect PFE
Viagra Rx and sales trends Every Monday, throughout 1998
AUA Meeting-presentation of Viagra data May 30-June 4,1998
FDA review of Zeldox June, 1998
2nd Qt PFE earnings July 15, 1998
Launch of Zeldox July, 1998
European approval of Viagra September, 1998
ED news in the media Throughout 1998
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Peabody V-Files
Analysts' estimates of Viagra 1998 sales average $519 million. At the current specification rate, it is estimated that Viagra is selling at a rate of $80 million per month. Accordingly, a conservative 1998 Viagra sales forecast is $720 million.
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Peabody Split
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 Annual Meeting on April 23, 1998, PFE management stated they will consider requesting additional authorized shares from shareholders later this year.
Bottom line, the next split will be 3-1 in the Fall, 1998 or March, 1999.
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