RiverBabe's Baby Biotechs

[riverbabe]

AMRN is up $.35 cents or so after hours after apparently being mentioned on CNBCs Fast Money program indicating a possible $30 target.

http://www.cnbc.com/id/43159545?__so...t%7C&par=yahoo

I'm back in and willing to hold a while. How about you?

In and out of OPTR. Locking in profits. Currently 13.48 av., as big a position as I am comfortable with. FDA decision 5/30 (i.e. Memorial Day), meaning Friday 5/27 or Tues. 5/31. Holding thru decision only. Will bail either way.

[Louetta]

AMRN is up $.35 cents or so after hours after apparently being mentioned on CNBCs Fast Money program indicating a possible $30 target.

http://www.cnbc.com/id/43159545?__source=yahoo%7Cheadline%7Cquote%7Ctext%7C&par=yahoo

[riverbabe]

Hql

Thanks billy!

[billyjoe]

I downloaded all the paperwork, but haven't read it yet. What is NAV and how do you calculate 6.7%? Thank you in advance. River

River,
In the case of HQL, the Net Asset Value (NAV) has consistently been quite a bit higher per share than the actual stock price. In the paperwork they sent, the NAV as of April 27 was 13.90 with the actual price per share being 12.97 for a price discount of 6.69%. They will pay 98% of that difference or 6.56% (my mistake on the %) as a premium above closing price on June 1st. They don't expect these numbers to change substantially in the next 15 days. My advisor says there are many more buyers than sellers and recommends holding the shares.

----------------billy

[riverbabe]

River,
Well whip me with a cat o' nine tails. I forgot all about this discussion. Just looked at the chart and 8/12/10 was about the low for ENDP over the last 9 months. Too many stocks, too little $$. I never bought and now it's looking tempting again.

------------billy

42.13? Good grief. I didn't buy either.

[riverbabe]

River,
I see this as being close to riskless arbitrage. Say you buy 1,000 shares May 19th. Being shareholder of record you get .26/share or $260 . Then if you chose to sell back to the company and get 98% of NAV June 1st, you pocket approx. additional 6.7% or $871 which adds up to $1131 profit on $13000 or 11.49% in 13 days. Unless there's a big price drop in that time period which I don't anticipate due to buyback and increasing div. history.
But, I'm not planning on selling to the company. Would rather take the continuing div. and hope for continued price appreciation.

------------billy

I downloaded all the paperwork, but haven't read it yet. What is NAV and how do you calculate 6.7%? Thank you in advance. River

[billyjoe]

Endo Pharmaceuticals is a great established pharma. Their move on Monday to buy out Penwest to reduce their royaltay payments and add to their pipeline is a smart move IMHO. So, the question becomes, when is the best time to buy?

The price got a nice boost on the news Monday and hit its 52-week high (26.05) from Dec. 2009 on Tues. But it couldn't hold it because of market conditions yesterday. It pulled back to another resistance point that should act as support now (around 24.96-25.00). (stockcharts is acting squirrely this morning, so I'll try to post an annotated chart. But if I can't, look at the weekly in particular.)

I think the news is priced in now, and from here it will move with the d$%@ market. Keep an eye on the 200. If it breaks it, it should fall dramatically. I'd try for a low-ball bid here. JMHO.

River,
Well whip me with a cat o' nine tails. I forgot all about this discussion. Just looked at the chart and 8/12/10 was about the low for ENDP over the last 9 months. Too many stocks, too little $$. I never bought and now it's looking tempting again.

------------billy

[billyjoe]

HCA and VGHCX

River,
Some of the medical related stocks and funds are finally paying off. Enough so that Beth might be able to keep me out of the poor house. Vanguard's Health fund has gained 53% in little more than 2 years and HCA is up 15.33% since its IPO.

-------I'm still blaming the Frists for pulling most of their shares out of the IPO at the last minute thus limiting what the common man could buy.

-------This from Wikipedia--" In 2005 and 2006 Bill Frist was named one of "the most corrupt members of congress" By Citizens for Responsibility & Ethics in Washington for ethic inquiries stemming from troubles with the FEC for nondisclosure of debts and investigations by the SEC for stock sales potentially based on inside information.

---------Frist may be an asset to society for his accomplishments in medicine. He has performed over 150 heart transplants, but the almighty dollar holds a special place in his heart.

------------billy

[billyjoe]

Hql

I bought a partial position. Watching for a greater pull back to buy more by May 19th. Thanks again!

River,
I see this as being close to riskless arbitrage. Say you buy 1,000 shares May 19th. Being shareholder of record you get .26/share or $260 . Then if you chose to sell back to the company and get 98% of NAV June 1st, you pocket approx. additional 6.7% or $871 which adds up to $1131 profit on $13000 or 11.49% in 13 days. Unless there's a big price drop in that time period which I don't anticipate due to buyback and increasing div. history.
But, I'm not planning on selling to the company. Would rather take the continuing div. and hope for continued price appreciation.

------------billy

[Louetta]

I think you may be on to something! I have been buying back in steadily because the stock just keeps going up on volume and that is a good sign also.

I bought some $10 June calls. Not going to make me rich but the option premiums are ridiculous. The June $22 call last trade was 77 cents. So a $17 stock has to go up almost $6 in 5 weeks to make any money.

[riverbabe]

I was reading the following write-up posted on Amazon apparently via optionmonster. Whereas Amarin won't get an up or down decision on their new drug in the timeframe of this option spread it occurred to me that someone is betting on a takeover bid before the 3rd Friday in June. I'm always suspicious that somebody knows something:

"A large option trader is playing the upside in Amarin, thinking that the drug developer has more gas in the tank ...

Today's option trade was a bullish call spread : A block of 4,000 June 22 calls was bought for $0.60 and an equal number of June 25 calls was sold for $0.20. That translates into a net cost of $0.40, with the potential profit of 650 percent if AMRN closes at or above $25 on expiration.

The shares are up 1.36 percent to $17.16 in afternoon trading. Given the amount that AMRN has to appreciate in the next five weeks for the calls to pay off, the investor apparently thinks that an explosive move is possible ..."

I think you may be on to something! I have been buying back in steadily because the stock just keeps going up on volume and that is a good sign also.

[Louetta]

I was reading the following write-up posted on Amazon apparently via optionmonster. Whereas Amarin won't get an up or down decision on their new drug in the timeframe of this option spread it occurred to me that someone is betting on a takeover bid before the 3rd Friday in June. I'm always suspicious that somebody knows something:

"A large option trader is playing the upside in Amarin, thinking that the drug developer has more gas in the tank ...

Today's option trade was a bullish call spread : A block of 4,000 June 22 calls was bought for $0.60 and an equal number of June 25 calls was sold for $0.20. That translates into a net cost of $0.40, with the potential profit of 650 percent if AMRN closes at or above $25 on expiration.

The shares are up 1.36 percent to $17.16 in afternoon trading. Given the amount that AMRN has to appreciate in the next five weeks for the calls to pay off, the investor apparently thinks that an explosive move is possible ..."

[riverbabe]

Update on HQL. They raised div. a penny. So it's now an even 8% with ex-div. date May 20th to be paid June 30th.

------------billy

I bought a partial position. Watching for a greater pull back to buy more by May 19th. Thanks again!

[billyjoe]

Update on HQL. They raised div. a penny. So it's now an even 8% with ex-div. date May 20th to be paid June 30th.

------------billy

[riverbabe]

Dusa

Here's an update on DUSA

http://biotechinvestmentparadigm.com/?p=1706