The Peabody Report: November 1,1998
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
PS Note: Due to major time obligations and apparent lack of interest in The Peabody Reports on the PFEr Boards, Mr. Peabody may be closing the show after a long 85 week run. It was PFun while it lasted.
__________________________________________________________
Peabody Peak/Valley Status
Peabody Peaks and Valleys (Updated: 10/31/98)
www3.techstocks.com
PFE 1 Year Chart (With Min/Max and Moving Averages)
Peabody Model Trend Prediction
Based on historical PFE patterns, the Peabody Model predicts the following trend :
Last Friday, PFE reached a new pending Peak of 108.25 passing the target of 103.36 by 4.5%. Da Model continues to predict that PFE will reverse and decline .....to a new Valley of 95.61 by November 20, 1998.
Commentary
The Model's negative trend primarily reflects the current strong Valley to Peak increase of 22.3% as compared to the average gain of 16.5% for 1998 Peaks. The new target Valley of 95.61 was moved up from last week's target of 92.26.
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 (10/30/98)......From Today
Last Peabody Peak*:..... 10/30/98......108.25..........+0.9% ...................-2
Last Peabody Valley: .....10/14/98......88.50.......... -17.5% ....................-19
* Pending
Forecasted Next Valley....11/20/98.....95.61..........-10.9%......................19
Potential Peak Valley Price.............. 99.69...........-7.2%
Forecasted Next Peak................... 112.58............+4.9%..................
(If Model is Wrong)
_____________________________________
Peabody Peaks and Valleys History (1990-1998)
Here is a summary of the 71 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...............16.5%
........... 35.........-14.4%.............36................27.8%
______________________________________________
Peabody Short-term PForecasts
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.
Evaluation of Peabody PForecast: PFE continued to climb with the 2% market gain. Thumbs down.
Peabody PForecast Record (85 weeks): 53-32 (62%)
_________________________________________________________
Peabody Short-Term PForecast (11/01/98): PFE: 107.31, DJ: 8592: This week's PFE's trend will reflect market momentum, profit-taking from the latest strong gain, Viagra media and, most important, the response to this Friday's annual PFE R&D meeting.
Gut feel: Expect a bounce down from the 110 level. Long-term... still very bullish on PFE, however, the short-term could be choppy to below 103...again.
The Peabody Model Dow PForecasts
Utilizing the Peabody Model Dow Amendment, the predicted PFE prices based on increases or decreases in the Dow are as follows:
..Increase/Decrease..............................Predicted...........% Change
..In Dow........................Dow Level........PFE Price.....From Current Price
.....+5% .................. .......9,022..............114.27...............+6.5%
.....+3% .................. .......8,850..............111.49...............+3.9%
.....+0% .................. .......8,592..............107.33...............+0.0%
......-3% .................. .......8,334..............103.16.................-3.9%
......-5% .................. .......8,162..............100.38.................-6.5%
_______________________________________
Peabody Portfolio
Total return:........................................+62.2% PFE @ 107.31
Annualized return:...............................+61.9%
% of Peabody purchases in the black... 89% (24 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).
________________________________________
# PFE Shares Purchased:.......... 4,300
Average Price of Purchases:....... $66.18
Total Costs: ...............................$284,563
Total Market Value:.....................$461,433
Total Potential Profit:...................$176,870
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
____________________________________________
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.
:..................$92 to $96...........Updated: 11/01/98
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
PFE R&D Meeting........................................November 6, 1998
Initial reports of Viagra international sales.......November, 1998
ACC/AHA Report on Viagra...........................December 1998
FDA Advisory Panel on Celebrex......................December,1998 - January, 1999
FDA Approval of Celebrex...............................February 24, 1999
Launch of Celebrex..........................................March, 1999
News of Viagra adverse reactions,
drug interactions, and labeling revisions: ........Throughout 1998 and 1999
Major analyst's Upgrades/Downgrades............Throughout 1998 and 1999
ED news in the media: ................................Throughout 1998 and 1999
Approval of Viagra in Japan.. .........................First half, 1999
_______________________________________________
Peabody V-Files
Viagra sales for the first six months on the market were $524 million, the highest recorded sales for a new pharmaceutical product during its first six months on the market.
Viagra sales in 6 months are four times higher than the combined sales of Evista and Propecia in 9 months. In fact, Trovan sales are higher than either Evista or Propecia.
...........................................$Millions
............................1Q.............2 Q........... 3Q..........Total YTD
........................... Sales....... Sales.........Sales...........Sales
Viagra....................N/A..........$411.........$141............$511
Trovan....................$42..........$ 22...........$ 41............$105
Evista....................$34..........$ 15...........$ 33.............$82
Propecia.................$13...........$ 16..........$24..............$53
As of 11/01/98, analysts estimate that Viagra will have 1998 sales of $0.860 billion, an 11% decline over their prior estimates. This sales level will represent the most successful launch of a pharmaceutical product in its first 9 months on the market.
............................................1998 Est...1998 Est
...........................................(Billions)....(Billions)..... Comments
Paine Webber.......................$0.950.......$0.925...... $1.9B (1999)
Gruntal.................................$0.925.......$1.000........$2.1B (1999)
Everen.................................$0.875........$1.000
Brown Brothers.....................$0.852.......$1.360..... $1.15B (1999)
Deutsche Bank ....................$0.850 ......$1.000
JP Morgan...........................$0.800........$0.800.... $1.15B (1999)
CS First Boston.....................$0.770.......$1.100.......$1.3B (1999)
Consensus...........................$0.860.......$0.965
____________________________________________
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
|
