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What Apple and Biotech Alkermes Have In Common

This column is my opinion and expresses my views. Those views can change at a moments notice when the market changes. I am not right all the time and I do not expect to be. I disclose all my positions clearly listed on the page, and I do not trade my account on the stocks spoken of in this column unless fully disclosed. If that does not work for you stop reading and close the page. Do not bother me or harass me.

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What Apple and Biotech Alkermes Have In Common

Investing is never easy, but I will tell you, there is more information available today than at any other point in history, you just have to look for it. Alkermes and Apple are two pretty good examples of that. If you do your homework and think outside of the herd mentality, you are at a major advantage.

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A great example of how the market can be asleep is Alkermes ($ALKS). I own Alkermes, so maybe it is a bit of an unfair advantage, and I have owned it now since August of 2014, so a long time. When the company presented at the JP Morgan Healthcare conference the very last slide noted 2017 revenue estimates of $870 to $900 million in sales, a non-event, right? But that is not the case because the company had noted when it released third-quarter results in October that revenue for 2017 would be only $850 to $880 million. So what happens today? Well, every financial website noted that Alkermes raised full-year guidance for 2017.

This is why it is important you do your homework from time to time, and question the things you read. In an 8-k filing on November 27, on page 3, the company noted that it saw revenue of $870 to $900, million. Alkermes was expecting to recognize the majority of the upfront payment of $28 million from its new licensing deal with Biogen, for ALKS 8700, a drug for the treatment of MS.

First of all, it should teach you that when you own a stock and you read something, do your homework and double-check what you are reading and do not trust everything. It isn’t that Alkermes suddenly raise guidance at the conference because it didn’t. They had already increased guidance nearly two months ago,  and the raise was only because of the added payment from the licensing deal.

So whether the stock has gone up for two days in a row on this “news”, I do not know. But I wanted to use this merely as an example. I hope you learned something.

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I’m so tired of hearing about Apple and this stupid iPhone X demand crap. Again, today, the same thing. The estimates tell the story, because for all the concern and chatter in the marketplace about the iPhone X being so weak, and all these production issues, why hasn’t the street started taking the revenue numbers down? Why?  The next two quarters have actually seen revenue estimates rise over the past 3 months.

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AAPL Revenue Estimates for Current Quarter Chart

AAPL Revenue Estimates for Current Quarter data by YCharts

So I ask if there is weak demand in the “channel”, why have estimates not fallen? Why has the stock risen by nearly 12 percent over the past three months? Why did companies like Broadcom and Jabil offer such strong guidance just a few weeks ago? Does it make any sense? No. Think about that.



Amazon has had such a massive breakout; it is so amazing and beautiful.

The market is looking for a huge beat when the company reports fourth-quarter results, that is obvious. Look at revenue estimates in the chart below and look at the stock price.  It Speaks volumes about how the market is getting way ahead of the forecast.

AMZN Revenue Estimates for Current Quarter Chart

AMZN Revenue Estimates for Current Quarter data by YCharts

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Tesla shares look like they are ready for a significant breakout, one that could send the stock sharply higher. The stock is stuck at strong multi-month downtrend, and should it break; I think it can make a run back to $385. I’m crazy, right? We shall see, I’m just telling it the way I see it. I’m not right all the time.



Ok well, we might as get one bit in on the biotech’s, because after all if you aren’t investing in biotech’s you’re not living. The NASDAQ Biotech ETF ($IBB) chart looks pretty darn healthy, and I’m thinking we see $114 before we see $107 again.

That is it.biotech

That is it.

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Michael Kramer and the Clients of Mott Capital own shares of ALKS and TSLA

Mott Capital Management, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Past performance is not indicative of future.

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Tags: #biotech #apple #alkermes #amazon #tesla