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Biotech / Medical : PFE (Pfizer) How high will it go? -- Ignore unavailable to you. Want to Upgrade?

To: BigKNY3 who wrote (5909)	10/11/1998 12:42:00 PM
From: BigKNY3	Read Replies (2) \| Respond to of 9523

The Peabody Report: October 11,1998 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 __________________________________________________________ The Peabody Model -The Peabody Model: History and Findings (Updated: 7/18/98) Peabody Model Trend Prediction Based on historical PFE patterns, the Peabody Model predicts the following trend : PFE extended its current Valley to 86 on Wednesday, October 8th before reversing and heading back up. Da Model predicts PFE will continue its upward trend from the close of last week and reach 101 by October 22nd. Commentary The current Peak to Valley decline of 21.3% is the largest since Health Reform days (-24.5%, 3/31/98) and significantly above the average 1998 Peak to Valley decline of 12.1%. The new target Peak of 101 is down from last week's forecast of 112.89. 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 (10/09/98)......From Today Last Peabody Peak:..... 9/28/98......109.19..........+17.4% ...................-13 Last Peabody Valley: ...10/08/98......86.00.......... -7.5% ....................-3 Pending Forecasted Next Peak....10/22/98.....101.04..........+8.6%............... ....11 Potential Peak Strike Price.............. 94.60...........+1.7% Forecasted Next Valley................... 81.70............-12.2%.................. (If Model is Wrong) _____________________________________ 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.........-12.1%.............11...............16.4% ........... 34.........-14.6%.............34................28.4% ______________________________________________ Peabody Short-term PForecasts 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. Evaluation of Peabody PForecast: PFE tested the pending Valley and blasted through to 86 based on several days of fear and profit-taking.....A big thumbs down. Peabody PForecast Record (82 weeks): 51-31 (62%) _________________________________________________________ Peabody Short-Term PForecast (10/11/98): PFE: 93.00, DJ: 7,900: Next week is earnings report time and every PFEr is holding their breath. In fact, PFE never surprises, earnings will be $0.56 or $0.57 in line with the Street's Consensus. The big question will be the spin. Are Viagra's lower 3Q sales (as compared to 2nd Q sales) a disappointment? Is PFE more than Viagra? Is a 20% PFE growth rate worth a 25% premium over the general market? Can PFE go up if the market heads down? Good questions...No one knows the answer....However, anyone can guess...... Da Gut Feel: PFE 3Q EPS should not disappoint. It would be particularly difficult to reconcile an optimistic buyback release with a pessimistic EPS report. Viagra 3Q sales will match up with current realistic estimates of $125M to $150M. Strong inline product sales will reinforce that "PFE is much more than Viagra." If the market continues to firm, PFE has the ability to take off to a 35-40% premium over the current Dow YTD growth (current premium is 24.8%). Watch Monday's price action as an indication of what the Street is thinking. Bottom line, last week's 86 will be seen as one of the best buying opportunities in 1998. PFE will reach 100 next week before some profit-taking takes over. ______________________________________________________ Peabody Portfolio Total return:........................................+41.7% PFE @ 93.00 Annualized return:...............................+42.4% % of Peabody purchases in the black... 54% (14 out of 26) Two Peabody purchases were made last week. The Peabody Portfolio now consists of 26 PFE purchase recommendations listed on the PFEr Board since August 14, 1996. To date, the Portfolio has purchased 4,200 PFE shares at an average price of $65.62 (only 3.6% off the subsequent next PFE Valleys). ________________________________________ # PFE Shares Purchased:.......... 4,200 Average Price of Purchases:....... $65.62 Total Costs: ...............................$275,613 Total Market Value:.....................$390,600 Total Potential Profit:...................$114,987 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 Total:............4,200.........$65.62 ____________________________________________ 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. :..................$88 to $93...........Updated: 10/11/98 New or pfuture PFErs could consider investing 50% immediately and investing the remainder at or near Peabody Valleys ________________________________________ 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 Third Quarter Earnings Report.......................October 13-15, 1998 PFE R&D Meeting........................................November 6, 1998 ACC/AHA Report on Viagra...........................December 1998 FDA Advisory Panel on Celebra......................December-February, 1998 FDA Approval of Celebra...............................February 24, 1999 News of Viagra adverse reactions and drug interactions: ...................................Throughout 1998 Major analyst's Upgrades/Downgrades............Throughout 1998 ED news in the media: ................................Throughout 1998 Japanese approval of Viagra .........................First half, 1999 _______________________________________________ Peabody V-Files (Updated 10/11/98) 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 $0.934 billion, a 27.5% 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 JP Morgan..............................$0.800.......$0.800.......$1.925B (2001) Merrill Lynch...........................$0.750 .....$0625...... Consensus...........................$0.934.......$0.733 ____________________________________________ 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: History and Findings (Updated: 7/18/98) 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