No Conviction

The market has traded in an extremely tight range since Monday afternoon. I would not be going out on a limb by saying we should expand that range tomorrow. I don't have a very strong feel on the market and wish I could offer more in the way of an opinion. Luckily healthcare has been shining led by Gilead so my lack of conviction on the overall market has not mattered. Have a good night.

5 comments:

Anonymous said...

Superb calls on AMGN, GILD and now perhaps TEVA. Impressive. I liked the GILD play (supply and demand) and followed youur lead. Thanks muchly for the tip.

Praguer

Tsachy Mishal said...

In paring some of my longs today I completely exited Teva. The only reason is that I have been following Gilead and AMGN for years while only recently doing work on Teva so when cutting position today it was the first to go.

Citi also looks weak which is a supply and demand trade. Unfortunately I did not do that one.

Anonymous said...

Bernstein's analyst thinks Teva might be about to get approval for a second generic Lovenox (Momenta got the first). If investors decide that Teva is now in the biogenerics business, where discounts are likely to be 25% rather than 90% off list, the stock might pop. I still don't like Teva's business model, though. A lion's share of their profits come from the first six months of sales of a drug for which they get a temporary exclusive on the generic. Thus, they have to keep getting approved for more and more new generics to keep revenues growing. It is not a recurring revenue business model, as Gilead's is.

Tsachy Mishal said...

But there is a steady stream that lasts forever on every generic even if the margins are not tremendous.

Tsachy Mishal said...

At current prices you don't need much growth to make money.