The Peabody Report: August 22, 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 8/11/98)
www3.techstocks.com
Chart of Peabody Peaks and Valleys with Moving Averages dailystocks.net
Useful PFEr 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
The Market Environment
-Briefing.com briefing.com
Peabody Model Trend Prediction
Based on historical PFE patterns, the Peabody Model predicts the following trend direction:
A pending Peabody Valley (98.50) was reached on August 11th. Da Model predicts that PFE will head to a new Peabody Peak of 117.19 by next week (August 28, 1998).
Commentary
PFE is still being buffeted by the focus on Viagra and the Asian crisis' impact on the general market.
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 (8/21/98)......From Today
Last Peabody Peak:..... 7/14/98......120.56..........+13.7% ...................-39
Last Peabody Valley*: .. 8/11/98 ......98.50.......... -7.1% .....................-11
* Pending
Forecasted Next Peak.....8/28/98....117.19..........+10.5%................ 6
Potential Peak Strike Price..............108.35............+2.2 %
Forecasted Next Valley................... 96.13.............-9.4%..................
(If Model is Wrong)
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Peabody Short-term PForecasts
Peabody Short-Term PForecast (8/16/98): PFE: 101.19, DJ: 8,425: To determine the PFE short-term direction, you need to predict where the general market is headed. ...Tough job....After a little more pain, I optimistically feel that the 8 year bull will roar again. In the meantime, PFE will be buffeted with any concerns about Viagra specification and irresponsible media stories (ie the WSJ "Freedumb of Information" medical writing staff). Long-term.... international Viagra approvals, improved profit margins sans Medical Technologies, Lipitor, and Celebra submission news.... will relaunch the PFE upbeat trend. Da Gut Feel: Since "If there is evidence on the dress, you must confess", President Clinton will do a "Checkers" speech and bring renewed optimism to the market. PFE will rise to around 105 with the Dow. Growth in Viagra Rxs on Monday would be a big bonus.
Evaluation of Peabody PForecast: Another great call for Mr. P..A big thumbs up.
Peabody PForecast Record (75 weeks): 48-27 (64%)
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Peabody Short-Term PForecast (8/23/98): PFE: 106.06, DJ: 8,534: Da Model is optimistically calling for a 10% increase in PFE this week. Seems a little high but it could happen if the bull market moves up 300 points and the EU approves Viagra. Expect a real positive week driven by followers of PFEr George Soros, news from the 8th World Meeting on Impotence Research urolog.nl , and the possible approval of Viagra in the EU . Da Gut Feel: PFE will begin the climb to the Peak with a close above 112.
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Peabody Portfolio
For only the second time in its history, the Portfolio made two purchases in a single week.
Total return:........................................+67.0% PFE @ 106.06
Annualized return:...............................+69.1%
% of Peabody purchases in the black... 87% (20 out of 23)
The Peabody Portfolio consists of 23 PFE purchase recommendations listed on the PFEr Board since August 14, 1996. To date, the Portfolio has purchased 3,900 PFE shares at an average price of $63.47 (only 2.7% off the subsequent next PFE Valleys).
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# PFE Shares Purchased:.......... 3,900
Average Price of Purchases:....... $63.47
Total Costs: ...............................$247,550
Total Market Value:.....................$413,400
Total Potential Profit:...................$165,850
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
Total:............3,900.........$63.47
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Suggested PFE Buying Levels
The following suggested PFE buying levels are 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:
:..................$97 to $101.................................
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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
8th World Meeting on Impotence Research.....August 24-28,1998
FDA Response to Public Citizen Letter...........September 1998
European approval of Viagra:.........................August 24,1998- December, 1998
NDA submission of Celebra...........................1998?
Expedited review of Celebra.........................One month following NDA submission
Initial reports of Viagra international sales.......September-October, 1998
Third Quarter Earnings.....................................October 14, 1998
PFE R&D Meeting........................................October 29, 1998
ACC/AHA Report on Viagra...........................December1998
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 $0.952 billion, a 39.3% 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)
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...........................$0.952.......$0.683
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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. |
