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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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Alkermes
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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Apple
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.
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
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 data by YCharts
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Tesla
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 $385. I’m crazy, right? We shall see, I’m just telling it the way I see it. I’m not right all the time.
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Biotech
Ok well, we might as get one bit in on the biotech’s, because after all if you aren’t investing in biotech’s you’re not living. The NASDAQ Biotech ETF ($IBB) chart looks pretty darn healthy, and I’m thinking we see $114 before we see $107 again.
That is it.
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.
© 2017 Mott Capital Management, LLC. Use, publication or reproduction in any media prohibited without the permission of the copyright holder.
Tags: #biotech #apple #alkermes #amazon #teslaÂ
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This report contains independent commentary to be used for informational and educational purposes only. Michael Kramer is a member and investment adviser representative with Mott Capital Management. Mr. Kramer is not affiliated with this company and does not serve on the board of any related company that issued this stock. All opinions and analyses presented by Michael Kramer in this analysis or market report are solely Michael Kramer’s views. Readers should not treat any opinion, viewpoint, or prediction expressed by Michael Kramer as a specific solicitation or recommendation to buy or sell a particular security or follow a particular strategy. Michael Kramer’s analyses are based upon information and independent research that he considers reliable, but neither Michael Kramer nor Mott Capital Management guarantees its completeness or accuracy, and it should not be relied upon as such. Michael Kramer is not under any obligation to update or correct any information presented in his analyses. Mr. Kramer’s statements, guidance, and opinions are subject to change without notice. Past performance is not indicative of future results. Neither Michael Kramer nor Mott Capital Management guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment commentary presented in this analysis. Strategies or investments discussed may fluctuate in price or value. Investments or strategies mentioned in this analysis may not be suitable for you. This material does not consider your particular investment objectives, financial situation, or needs and is not intended as a recommendation appropriate for you. You must make an independent decision regarding investments or strategies in this analysis. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Before acting on information in this analysis, you should consider whether it is suitable for your circumstances and strongly consider seeking advice from your own financial or investment adviser to determine the suitability of any investment.
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