The portfolio review is a little late due to a holiday. As I noted on my previous post, Contrarian Investor UK is searching for suitable short term trading opportunities and there appear to be few obvious long only options. The volatility of the market makes me reluctant to commit to large shorts so the portfolio is on a holding pattern waiting for results from the Falkland Islands and news from GW pharma. New ideas are being assessed.
GW Pharma (GWP) - The portfolio's largest holding had a good week, with a solid move from around the 90p mark to £1.00. However, a minimum 35% upside is expected if the European approval for cannabis spray, Sativex, is announced this month. In addition to this, clinical trial results from the 336 patient phase II/III study funded by partner Otsuka are due early this year. The patients in the study have advanced cancer for which there is no curative therapy and are experiencing little relief from pain using conventional opiods. The primary goal of the study is response rate after 5 weeks. Further studies are planned to start in mid-2010 to enable the U.S. FDA registration of Sativex in 2011 and an additional European indication for cancer pain, also in 2011.
Falkland Oil drillers (Desire Petroleum DES, Falkland Oil and Gas FOGL, Borders and Southern BOR) - The potential intervention of U.S. Secretary of State, Hillary Clinton, helped to dampen sentiment in the Falkland Island Oil drillers. Following a meeting with the Argentinian President, Cristina Fernandez de Kirchner, Clinton said she encouraged the U.K. and Argentine governments to negotiate a settlement in relation to the sovereignty of the Falkland Islands. DES, FOGL and BOR are all down 20%-30% from the point when Desire's Ocean Guardian Rig began drilling in the North Falklands basin. However, news from the Ocean Guardian should be forthcoming in the next 1-2 weeks.
ITV (ITV) - ITV's 2009 results were initially positively received by the markets with a rise on the announcement to 57p. However, the shares have now drifted back to 52p with the markets expecting the return to health of the company to take some time under Norman/Crozier's leadership. ITV seem to be stuck in a trading range in the 50's and further positive news is needed to propel them through the 60p mark.
Amgen (AMGN) - The final tranche of Amgen stock was sold today at $57.6, giving a 5% gain despite the propects for Osteoporosis drug, Prolia. I am hoping for a buyback situation around $55 given the trading range of $55-58.
Micron Technology (MU) - Micron is stubbornly stuck below the $10 mark and currently trades at $9.5 despite the positive outllook for memory chips.
Showing posts with label amgen. Show all posts
Showing posts with label amgen. Show all posts
Tuesday, March 9, 2010
Sunday, February 28, 2010
Portfolio Update - February 28th 2010
A relatively benign week on the markets but a good month for equities in general. The FTSE 100 rose 76 points to 5,354 on Friday, whilst U.S. stocks finished modestly higher (DOW JONES Industrials 10,325 +4 points) to have their best month since November (DOW +2.6%, NASDAQ +4.2%, S&P 500 +1.5%, FTSE 100 +2.6% for the month)
On Friday, the U.S. Commerce Department reported that GDP grew at a 5.9% the fourth quarter of 2009, the fastest rate since the third quarter of 2003 confirming the the American economy is solidly moving out of recession. This compared with the U.K.’s revised GDP of 0.3%.
The portfolio was hit hard this week by the disappointing news from Nighthawk Energy (HAWK), highlighting the risks and rewards of investing in small cap stocks. Contrarian Investor UK is currently assessing some new ideas for the portfolio with a view to rebalancing to a more diversified portfolio.
Nighthawk Energy (HAWK) – On Tuesday, Nighthawk finally issued a more comprehensive report on the Jolly Ranch shale oil and gas play in the U.S.. The results were poor, with the field still producing little more than 150 barrels per day (BPD) despite promises as the Annual General Meeting (AGM) that production would be closer to 800-1000 by quarter one 2010. The horizontal drilling technique used on some of the wells to extract oil seems to have been relatively unsuccessful meaning that HAWK is looking at the economics of the field based on standard vertical drilling. The company had $18 million of cash and liquid assets left after the fund raising in 2009. Contrarian Investor UK sold his position on the news at 27p, with the stock finishing the week at 25p. A 30% loss was painful given the commitment in time to this company but I am concerned that the “proving up” of the Jolly shale oil field will take the company into late 2010 where cash resources will become stretched and a further fund raising will be necessary. It is also somewhat concerning that private partner Running Foxes, who currently fund 50% of the drilling work, may not have an appetite for continued high investment in Jolly. Although HAWK may decide to sell its Revere or Cisco Springs fields, this stock is now looking very high risk and I disappointed in the results from Jolly Ranch after the strong convictions expressed at the AGM by MD David Bramhill and Steve Tedesco (from partner Running Foxes). At 25p, HAWK may still produce a return for buyers at this level but although it may go to 40p, sub 20p may also be just round the corner for this company which seems to thrive on shareholder disappointment.
Falkland Oil drillers (Desire Petroleum, Falkland Oil and Gas, Borders and Southern) – The Falkland Oil explorers all slipped this week, as the Argentinean government continued to apply political pressure through the Rio Summit and U.N. for the British government to stop further drilling around the Islands. This political pressure has been to date unsuccessful but added to the relative risks of these shares. I continue to hold DES, FOGL and BOR on expectation of results from the Ocean Guardian rig in March despite all the volatility in these companies.
ITV (ITV) – ITV continues it’s move back up and finished at 54p, following a positive outlook from Scottish Television company STV (which was formerly known as SMG). STV chief executive, Rob Woodward, forecast that the national TV ad market was likely to be up between 4 and 8% year on year in April.
GW Pharma (GWP) – Approval for cannabis spray, Sativex, is still expected in Q1 and this remains Contrarian Investor U.K’s largest holding.
Amgen (AMGN) - A quiet week for Amgen with the stock finishing at $56. Further news on osteoporosis drug, Prolia, still awaited in quarter one 2010.
Micron Technology (MU) – The stock moved back over the $9 mark as the outlook for DRAM memory chips continue to improve in the the second half of 2010.
On Friday, the U.S. Commerce Department reported that GDP grew at a 5.9% the fourth quarter of 2009, the fastest rate since the third quarter of 2003 confirming the the American economy is solidly moving out of recession. This compared with the U.K.’s revised GDP of 0.3%.
The portfolio was hit hard this week by the disappointing news from Nighthawk Energy (HAWK), highlighting the risks and rewards of investing in small cap stocks. Contrarian Investor UK is currently assessing some new ideas for the portfolio with a view to rebalancing to a more diversified portfolio.
Nighthawk Energy (HAWK) – On Tuesday, Nighthawk finally issued a more comprehensive report on the Jolly Ranch shale oil and gas play in the U.S.. The results were poor, with the field still producing little more than 150 barrels per day (BPD) despite promises as the Annual General Meeting (AGM) that production would be closer to 800-1000 by quarter one 2010. The horizontal drilling technique used on some of the wells to extract oil seems to have been relatively unsuccessful meaning that HAWK is looking at the economics of the field based on standard vertical drilling. The company had $18 million of cash and liquid assets left after the fund raising in 2009. Contrarian Investor UK sold his position on the news at 27p, with the stock finishing the week at 25p. A 30% loss was painful given the commitment in time to this company but I am concerned that the “proving up” of the Jolly shale oil field will take the company into late 2010 where cash resources will become stretched and a further fund raising will be necessary. It is also somewhat concerning that private partner Running Foxes, who currently fund 50% of the drilling work, may not have an appetite for continued high investment in Jolly. Although HAWK may decide to sell its Revere or Cisco Springs fields, this stock is now looking very high risk and I disappointed in the results from Jolly Ranch after the strong convictions expressed at the AGM by MD David Bramhill and Steve Tedesco (from partner Running Foxes). At 25p, HAWK may still produce a return for buyers at this level but although it may go to 40p, sub 20p may also be just round the corner for this company which seems to thrive on shareholder disappointment.
Falkland Oil drillers (Desire Petroleum, Falkland Oil and Gas, Borders and Southern) – The Falkland Oil explorers all slipped this week, as the Argentinean government continued to apply political pressure through the Rio Summit and U.N. for the British government to stop further drilling around the Islands. This political pressure has been to date unsuccessful but added to the relative risks of these shares. I continue to hold DES, FOGL and BOR on expectation of results from the Ocean Guardian rig in March despite all the volatility in these companies.
ITV (ITV) – ITV continues it’s move back up and finished at 54p, following a positive outlook from Scottish Television company STV (which was formerly known as SMG). STV chief executive, Rob Woodward, forecast that the national TV ad market was likely to be up between 4 and 8% year on year in April.
GW Pharma (GWP) – Approval for cannabis spray, Sativex, is still expected in Q1 and this remains Contrarian Investor U.K’s largest holding.
Amgen (AMGN) - A quiet week for Amgen with the stock finishing at $56. Further news on osteoporosis drug, Prolia, still awaited in quarter one 2010.
Micron Technology (MU) – The stock moved back over the $9 mark as the outlook for DRAM memory chips continue to improve in the the second half of 2010.
Sunday, February 21, 2010
Portfolio Update - February 21st 2010
The market’s had a good week, with most of the major indices up 3% or so. Sentiment seems to have turned positive over the last 2 weeks after the negativity early in February. One of Contrarian Investor UK’s principles to maintain adequate diversification is being broken this week as my portfolio is too heavily weighted towards GW Pharma and the Falkland Islands Oil companies. But the “binary bet” on the success of GW’s Sativex cannabis spray for Multiple Sclerosis is far too tempting a target. The previous application for the drug was rejected because of inadequate clinical trial data. This was addressed with an additional phase III clinical and the new application made for a European licence in the summer of 2009 looks very strong. I have used Contract’s For Difference (CFDs) to limit the downside risk to 20% or so, but approval should move GW Pharma up at least 50-60%. As for the Falklands Oil drillers, all the hype and TV/press coverage is just too tempting to exploit and again the upward move on these shares will be so significant that a guaranteed stop loss using a CFD seems a sensible trade, albeit a gamble. “Fortune favours the brave”.
Coal of Africa (CZA) – Significant upward move in this share price this week on no news from 130p range to a high of 153p. Positions closed despite long term conviction in this stock, especially as Vele mine approval was finally given this month. This strategy appeared to have paid off on Friday with CZA falling as much as 5% at one point. I will watch for a potential re-entry point if the positive market sentiment turns for the worse.
GW Pharma (GWP) – Still no news on the Sativex European approval but given the timings of the Decentralised approval process (DCP) for drugs in Europe it would be expected that news is not far off. Have increased position once again at 87p.
Falklands Islands Oil (Falkland Oil and Gas –FOGL, Desire Petroleum – DES, Borders and Southern Petroleum BOR) – Its been an exciting week for the Falklands Oil stocks as Argentina issued a decree that any vessel passing through its waters would need a permit to visit the Falklands which made investors somewhat nervous. On Friday, the Ocean Guardian Rig, contracted by Desire Petroleum arrived on the Liz field in the North Falklands basin and is due to spud this afternoon. I took the opportunity to top up my holding in Desire Petroleum despite some reservations about my significant exposure to the Falklands Oil sector. The risks are significant but the geology of the Falklands basin and oil finds in the previous drilling campaign by Shell/Lasmo gives more than hope that oil will be found in economic quantities. If the Ocean Guardian Rig does strike it rich then I would expectd Desire’s share price to be closer to £20 than 1 so the risk/reward ratio still looks enticing despite the strong run up in the Falkland Island Oil shares. Falkland Oil and Gas and Borders and Southern Petroleum have been relatively benign for a couple of weeks now, so a rise in these Southern Basin stocks would be expected on any news from the Northern Basin drilling campaign.
Nighthawk Energy (HAWK) - Nice move back up from 27p to just over 30p as the company announced the appointment of a new non-exec. director. News on Jolly Ranch should be imminent and therefore I am hopeful of a solid move towards 40p in the next week.
Nighthawk Energy (HAWK) - Nice move back up from 27p to just over 30p as the company announced the appointment of a new non-exec. director. News on Jolly Ranch should be imminent and therefore I am hopeful of a solid move towards 40p in the next week.
ITV (ITV) – A move up from below 50p to 53p as news on potential government approval of Product Placement on UK TV came through. Position still in deficit but given TV market revenue rebound in both January and February, outlook looks positive.
Amgen (AMGN) – News was received this week that an opinion on the FDA application for Prolia (denosumab) would be received by end July. I have trimmed by position a little this week because of a shift in the portfolio to GWP and the Falkland’s shares but will look to top up in the next few weeks.
Intel (INTC) - Position closed at $21.7, following a good rise in the semiconductor stocks this week. I like Intel long term but it trades within a range of $19-$22 so a move to the upper end triggered a sale.
Micron (MU) – The worst performing stock in the portfolio but Micron continues to rebound from its lows close to $8 to finish Friday at $8.9. Holding
Saturday, February 20, 2010
FDA decision on Amgen's Prolia by end July 2010
The U.S. Food and Drug Administration (FDA) has accepted Amgen's (AMGN) application for its osteoporosis drug Prolia (denosumab) and will make its approval decision by July 25, the company said on Friday.The FDA asked Amgen last October to provide additional information before it would proceed with its review and the company submitted its response in late January. A European decision on Prolia approval is expected in the first half of 2010.
Friday, February 19, 2010
2/3 of S&P 500 companies have beaten on top line
This morning I was listening to the the excellent and highly recommended S&A Investor Radio Podcast by Frank Curzio (available for free from the Itunes store). Frank interviewed head of research for TheStreet.com's Action Alerts portfolio (Jim Cramer's Charitable portolion), Stephanie Link, and she cited the statistic that 2/3 of companies that had reported so far in the S&P 500 had beaten on revenues. This is an interesting statistic since it indicates that perhaps economic recovery in the U.S. is better than expected as the hypothesis has been that aggressive cost cutting has grown bottom line profits but the sales revenues were still weak due to low economic activity.The U.S. economy looks to be set for good growth in the next 6 months, helped by the continued stimulus package.The continued deficit issues make the back end of 2010 and 2011 much more hazy.
Although I have been selling down portfolio positions over the last week to bank some profits in stocks such as Coal of Africa (CZA), Intel (INTC) and Amgen (AMGN), any significant weakess in the markets is very much seen as a buying opportunity for favoured names. Certainly a trading market, not a buy and hold by any means!
Although I have been selling down portfolio positions over the last week to bank some profits in stocks such as Coal of Africa (CZA), Intel (INTC) and Amgen (AMGN), any significant weakess in the markets is very much seen as a buying opportunity for favoured names. Certainly a trading market, not a buy and hold by any means!
Saturday, February 13, 2010
Portfolio Update - February 13th 2010
Falklands Oil stocks (Desire Petroleum DES, Falklands Oil and Gas FOGL, Borders and Southern BOR) - Plenty of controversy in the Falkland Islands this week, with The Thor Leader,a ship carrying pipes made by the Techint group in Argentina being stopped in the southern port of Campana because of allegations by the Argentinian government that it was "illegally" supplying drilling equipment to the Falklands.Techint, the world's biggest producer of seamless steel tubing for the oil industry, denied that the equipment was even bound for the Falklands and said it was going to clients in the Mediterranean. The share prices of DES, FOGL and BOR slid on the news but not alarmingly and were more hurt by the strengthening dollar's impact on the price of oil. The Ocean Guardian rig should arrive in the Falklands next week all being well. Continuing to hold all these stocks and anticipating significant volatility as drilling starts for Desire Petroleum.
Coal of Africa (CZA) - Again broadly flat this week at 130p. No news but an interesting interview with Arcellor Mital in Mining weekly which own a stake in CZA and have been touted as being in the game to take over the company - CEO Nonkululeko Nyembezi-Heita said on Wednesday that the group was redoubling its efforts to secure control of additional iron-ore. The decision was aligned to a group strategy of lowering costs through resource ownership rather than to any security of supply concerns, as there was sufficient domestic capacity available for purchase. "We are not concerned about accessing iron-ore, we are concerned about having control over than iron-ore," she explained, adding that the same was true for coal, which underpinned its decision to invest in Coal of Africa.The company requires 10-million tons of iron-ore yearly to meet its annual nameplate steelmaking capacity of 8-million tons. It is currently able to source more than 9-million of that need on favourable terms, paying market-related prices for the balance. However, if it were to grow its capacity, the company would aim to do so in a way that it matched any steelmaking expansion, with an expansion of its upstream resources. "We are now redoubling efforts to be self-sufficient in iron-ore and coal," Nyembezi-Heita explained, adding that the group's loss of participation rights in Sishen South meant that a new approach would have to be pursued. She indicated that the company was ready to partner with BEE explorers in pursuing new iron-ore opportunities in South Africa. Similarly, it would be keen to participate in projects able to produce hard coking coal. At full capacity, the group would consume about 1,8-million of coal yearly.
Nighthawk Energy (HAWK) - Having broken through the 30p mark last week, HAWK is oscillating between 27p and 30p as further news from the Jolly Ranch project is eagerly awaited by investors. The announcement that Lloyds sold a tranche of their holding is the reason for the downward pressure in recent weeks, and hopefully this overhang of stock is now cleared. Positive news from the company's shale oil project is now needed.
ITV (ITV) - ITV closed down around 50p this week as BSkyB finally placed a 10% holding in the market. The position is now down around 10% from the but price. However, the clearance of the uncertainty about the Sky scale now opens the door for a potential take over of this company sometime in the next 12 months as revenues recover.
GW Pharma (GWP) - Little movement this week as news on the Decentralised Procedures for the EU registration of Sativex is still awaited. This is Contrarian Investor's largest holding given the odds of a successful approval seem signficantly higher than a rejection given the strong clinical trial results in multiple sclerosis patients.
Amgen (AMGN) - Despite another positive clinical trial for osteoporosis drug, Prolia, Amgen slipped this week to close around $56 as the pharma sector as a whole was unloved by investors. Holding for news on EU Prolia approval.
Micron Technology (MU) - Micron stock remained at around the $8.5 level as it announced an acquisition of Numonyx for $1.2 billion in stock (see previous article from earlier in the week). Holding
Intel (INTC) - A rise in Intel to around $20.5 on Friday gave an opportunity to sell some of the position bought at $19.
Coal of Africa (CZA) - Again broadly flat this week at 130p. No news but an interesting interview with Arcellor Mital in Mining weekly which own a stake in CZA and have been touted as being in the game to take over the company - CEO Nonkululeko Nyembezi-Heita said on Wednesday that the group was redoubling its efforts to secure control of additional iron-ore. The decision was aligned to a group strategy of lowering costs through resource ownership rather than to any security of supply concerns, as there was sufficient domestic capacity available for purchase. "We are not concerned about accessing iron-ore, we are concerned about having control over than iron-ore," she explained, adding that the same was true for coal, which underpinned its decision to invest in Coal of Africa.The company requires 10-million tons of iron-ore yearly to meet its annual nameplate steelmaking capacity of 8-million tons. It is currently able to source more than 9-million of that need on favourable terms, paying market-related prices for the balance. However, if it were to grow its capacity, the company would aim to do so in a way that it matched any steelmaking expansion, with an expansion of its upstream resources. "We are now redoubling efforts to be self-sufficient in iron-ore and coal," Nyembezi-Heita explained, adding that the group's loss of participation rights in Sishen South meant that a new approach would have to be pursued. She indicated that the company was ready to partner with BEE explorers in pursuing new iron-ore opportunities in South Africa. Similarly, it would be keen to participate in projects able to produce hard coking coal. At full capacity, the group would consume about 1,8-million of coal yearly.
Nighthawk Energy (HAWK) - Having broken through the 30p mark last week, HAWK is oscillating between 27p and 30p as further news from the Jolly Ranch project is eagerly awaited by investors. The announcement that Lloyds sold a tranche of their holding is the reason for the downward pressure in recent weeks, and hopefully this overhang of stock is now cleared. Positive news from the company's shale oil project is now needed.
ITV (ITV) - ITV closed down around 50p this week as BSkyB finally placed a 10% holding in the market. The position is now down around 10% from the but price. However, the clearance of the uncertainty about the Sky scale now opens the door for a potential take over of this company sometime in the next 12 months as revenues recover.
GW Pharma (GWP) - Little movement this week as news on the Decentralised Procedures for the EU registration of Sativex is still awaited. This is Contrarian Investor's largest holding given the odds of a successful approval seem signficantly higher than a rejection given the strong clinical trial results in multiple sclerosis patients.
Amgen (AMGN) - Despite another positive clinical trial for osteoporosis drug, Prolia, Amgen slipped this week to close around $56 as the pharma sector as a whole was unloved by investors. Holding for news on EU Prolia approval.
Micron Technology (MU) - Micron stock remained at around the $8.5 level as it announced an acquisition of Numonyx for $1.2 billion in stock (see previous article from earlier in the week). Holding
Intel (INTC) - A rise in Intel to around $20.5 on Friday gave an opportunity to sell some of the position bought at $19.
Tuesday, February 9, 2010
Positive results from Amgen's Prolia in head to head clinical study
Amgen (AMGN) announced after the close last night that a third pivotal phase III clinical trial in 1,900 patients showed that osteoporosis drug, Prolia (denosumab) works better than Novartis's Zometa to delay and reduce the risk of fractures and other bone complications in men with advanced prostate cancer. The shares rose nearly 3% after hours to $59. The company said that the trial met all its primary and secondary goals and that full results would be announced at a medical meeting in June.
The latest clinical trial results make European approval even more likely for Prolia and give the company additional data to submit to the FDA following their request in October 2009 for supplementary information. Given Prolia could be a $3 billion plus drug by 2013, the trial news are an excellent boost for Amgen.
The latest clinical trial results make European approval even more likely for Prolia and give the company additional data to submit to the FDA following their request in October 2009 for supplementary information. Given Prolia could be a $3 billion plus drug by 2013, the trial news are an excellent boost for Amgen.
Saturday, February 6, 2010
Portfolio Review of the week - February 6th 2010
A tough week for the Contrarian Investor UK portfolio this week as global markets fell heavily on sovereign debt concerns in countries such as Greece. The DOW Jones Industrials briefly fell as low as 9850 yesterday before staging a strong recovery in the last hour of trading to finish higher and back over the 10,000 level. Unfortunately, some long bets on the DOW were closed out at the lows , which was frustrating given the rebound. As I talk about shortly, the investment thesis for the holdings in the portfolio are robust and news flow is expected for most of the holdings in the coming weeks which should be a catalyst for share price appreciation. A sell off in the market that we have seen in the last 2 weeks is a positive development given we are now back in the “good value” zone after the rises in January looked unsustainable and stretched the prices of many stocks. The portfolio is now positioned for any change to a more positive sentiment.
Coal of Africa (CZA) – Finally the news that has been awaited for the last 4 months came through with the South African Government granting the new mining order for the Vele coking coal project. Although the share price initially responded well with a 23% one day rise to 148p, the large falls in global stock markets throughout the latter part of the week and rumours that fellow Coal stock, GCM, were selling down their holding meant that CZA finished the week at 133p, barely unchanged. Based on fundamentals CZA looks very solid – rising prices for metallurgical and thermal coal, increasing production coming on stream from Mooiplaats and now Vele, the acquisition of NuCoal brings on stream further capacity, good off take agreements with the likes of Arcellor Mittal (who own a stake in Coal of Africa). Continuing to hold.
GW Pharma (GWP) - Remarkably robust given the overall market picture, with a small fall to 87p. Sativex Cannabis spray regulatory approval in Europe in final stages. News expected in Q1 2010.
Falkland Islands Oil Shares (Falklands Oil and Gas (FOGL), Desire Petroleum (DES), Borders and Southern Petroleum (BOR) ) - A strengthening in the U.S. dollar this week due to fears about debt default in Portgual, Spain, Italy and Greece sent commodities into free fall this week with WTI Crude Oil dipping below $70 on Friday (after being above $80 in January). In addition, posturing by the Argentininian government about the ownership of the Falklands added to the general uncertainty. The Ocean Guardian Rig hired by Desire Petroleum is due to arrive in the Falklands in the next week or so with drilling due to start mid-February. News from Falklands Oil and Gas (which has a farm in deal with BHP Billiton) on a potential sharing of Ocean Guardian is expected in the next couple of weeks with further news on a deep water rig needed to drill in the deeper waters of the South Falklands basin also on the horizon. Despite heavy falls in the Falklands Islands shares this week, with the rush out of oil stocks and riskier assets, imminent news from the drilling campaign should drive prices higher.
ITV (ITV) – TV company, ITV dropped to 53p this week on the general market weakness. The outlook for TV revenues is solid in 2010 and the management team of Crozier and Norman is looking to streamline the business and review the ongoing strategy of the business. Holding.
Nighthawk Energy (HAWK) – HAWK broke through the long term resistance of 30p this week on the weakness in the oil price and now stands at lows last seen during the March 2009 lows at 27p. Despite reasonably positive news from the Jolly Ranch project last week, and confirmation that substantial news on the field would be released this week, the shares continue to take a tumble. The fundamental investment thesis for HAWK, namely the Jolly Ranch and Revere prospects is unchanged. Though Contrarian Investor UK is disappointed in the short term performance, I will continue to hold as news flow does not support this continued erosion in the share price.
Amgen (AMGN) - The stock price fell from close to $60 earlier in the week to finish at $57.5 as sentiment on pharma stocks was not helped by disappointing results from Pfizer (PFE) and Astra Zeneca (AZN). News on osteoporosis drug, Prolia, is expected in Q1 or early Q2. Holding.
Intel (INTC) and Micron (MU) – Semi conductor stocks took a hammering early in the week with Micron falling close to $8 and Intel dipping below $19. Despite the short term weakness, long term fundamentals look positive for chips consumption in both the consumer and business enterprise segments.
Coal of Africa (CZA) – Finally the news that has been awaited for the last 4 months came through with the South African Government granting the new mining order for the Vele coking coal project. Although the share price initially responded well with a 23% one day rise to 148p, the large falls in global stock markets throughout the latter part of the week and rumours that fellow Coal stock, GCM, were selling down their holding meant that CZA finished the week at 133p, barely unchanged. Based on fundamentals CZA looks very solid – rising prices for metallurgical and thermal coal, increasing production coming on stream from Mooiplaats and now Vele, the acquisition of NuCoal brings on stream further capacity, good off take agreements with the likes of Arcellor Mittal (who own a stake in Coal of Africa). Continuing to hold.
GW Pharma (GWP) - Remarkably robust given the overall market picture, with a small fall to 87p. Sativex Cannabis spray regulatory approval in Europe in final stages. News expected in Q1 2010.
Falkland Islands Oil Shares (Falklands Oil and Gas (FOGL), Desire Petroleum (DES), Borders and Southern Petroleum (BOR) ) - A strengthening in the U.S. dollar this week due to fears about debt default in Portgual, Spain, Italy and Greece sent commodities into free fall this week with WTI Crude Oil dipping below $70 on Friday (after being above $80 in January). In addition, posturing by the Argentininian government about the ownership of the Falklands added to the general uncertainty. The Ocean Guardian Rig hired by Desire Petroleum is due to arrive in the Falklands in the next week or so with drilling due to start mid-February. News from Falklands Oil and Gas (which has a farm in deal with BHP Billiton) on a potential sharing of Ocean Guardian is expected in the next couple of weeks with further news on a deep water rig needed to drill in the deeper waters of the South Falklands basin also on the horizon. Despite heavy falls in the Falklands Islands shares this week, with the rush out of oil stocks and riskier assets, imminent news from the drilling campaign should drive prices higher.
ITV (ITV) – TV company, ITV dropped to 53p this week on the general market weakness. The outlook for TV revenues is solid in 2010 and the management team of Crozier and Norman is looking to streamline the business and review the ongoing strategy of the business. Holding.
Nighthawk Energy (HAWK) – HAWK broke through the long term resistance of 30p this week on the weakness in the oil price and now stands at lows last seen during the March 2009 lows at 27p. Despite reasonably positive news from the Jolly Ranch project last week, and confirmation that substantial news on the field would be released this week, the shares continue to take a tumble. The fundamental investment thesis for HAWK, namely the Jolly Ranch and Revere prospects is unchanged. Though Contrarian Investor UK is disappointed in the short term performance, I will continue to hold as news flow does not support this continued erosion in the share price.
Amgen (AMGN) - The stock price fell from close to $60 earlier in the week to finish at $57.5 as sentiment on pharma stocks was not helped by disappointing results from Pfizer (PFE) and Astra Zeneca (AZN). News on osteoporosis drug, Prolia, is expected in Q1 or early Q2. Holding.
Intel (INTC) and Micron (MU) – Semi conductor stocks took a hammering early in the week with Micron falling close to $8 and Intel dipping below $19. Despite the short term weakness, long term fundamentals look positive for chips consumption in both the consumer and business enterprise segments.
Sunday, January 31, 2010
Portfolio Update - 30th January 2010. Market weakness makes swimming against tide tough!
Falkland Oil and Gas (FOGL), Desire Petroleum (DES), Borders and Southern (BOR) – All Falkland Oil shares have fallen this week on oil price weakness and investor fight from riskier assets. (As an aside, my contrarian short play on Emerging makets would have eventually played out, after 3 weeks of heavy falls. Frustrating to have closed the shorts just before the drops). Having trimmed by positions as euphoria in the Falklands Oil story hit fever pitch two weeks ago, I have topped up this week on FOGL. Continuing to hold as Desire’s Ocean Guardian rig is due to arrive in the Falklands shortly and drilling will start by mid-February.
Nighthawk (HAWK) – Despite an update on the Jolly Ranch project (which said that the real news was due in February on the status of the drilling campaign), the share price remains stubbornly subdued at 32p. News on the water flooding at the Revere project is also anticipated. Holding at 31.5p.
Coal of Africa (CZA) – News that the acquisition of South Africa coal producer, NuCoal , was completed was not enough to give any positive momentum to the share price which finished the week at 118p. NuCoal should produce 4.2 million tonnes of coal per year. The lack of clarity on the approval process for the Vele project is still unnerving investors despite the fact that the company said it is accelerating capex on the project using some of the proceeds from the placing in October 2009. CZA confirmed that it would commence production of export quality coal in this quarter from it's Mooiplaats mine. Holding
GW Pharma (GWP) – The share price slipped a little this week as the markets generally took a tumble. Position increased on this weakness. Holding for approval news on the cannabis spray for MS, Sativex.
ITV (ITV) – News that ex Royal Mail boss Adam Crozier was appointed as Chief Executive did not cause much excitement in ITV’s stock price. Continuing to hold on expected recovery in TV revenues, hoped deregulation in TV market pricing and product placement.
Amgen (AMGN) – Despite heavy falls in the U.S. markets last week, Amgen had a good week, rising above $58. Some profits taken at $58.5 but continuing to hold core position on anticipation of Prolia (osteoporosis drug) approval in EU in this half of 2010.
INTEL (INTC) – After selling most of the position prior to the results at over $21, weakness in the semiconductor sector this week gave a buying opportunity at below $19 and therefore have reinitiated several positions.
Micron Technology (MU) – The worst performer of the week, having hit close to $11 3 weeks ago, the stock continues to slide close to $8.7 and with an average buy position of just below $10 this is showing a loss. The recent legal settmement between Samsung and Rambus did not help sentiment but concerns that Samsung may ramp up DRAM production or that inventories will rise have not helped the direction of the stock in recent days. Continuing to hold but on review.
Google (GOOG) – Position close at $555 after Q4 results disappointed markets with a fall from over $580. Stock now at $529 and looking at re-entry point.
JP Morgan (JPM) – Position initiated at $39. JPM is one of the better plays in the U.S. financial sector and has fallen heavily in the last 2 weeks from $43-44 range.
Nighthawk (HAWK) – Despite an update on the Jolly Ranch project (which said that the real news was due in February on the status of the drilling campaign), the share price remains stubbornly subdued at 32p. News on the water flooding at the Revere project is also anticipated. Holding at 31.5p.
Coal of Africa (CZA) – News that the acquisition of South Africa coal producer, NuCoal , was completed was not enough to give any positive momentum to the share price which finished the week at 118p. NuCoal should produce 4.2 million tonnes of coal per year. The lack of clarity on the approval process for the Vele project is still unnerving investors despite the fact that the company said it is accelerating capex on the project using some of the proceeds from the placing in October 2009. CZA confirmed that it would commence production of export quality coal in this quarter from it's Mooiplaats mine. Holding
GW Pharma (GWP) – The share price slipped a little this week as the markets generally took a tumble. Position increased on this weakness. Holding for approval news on the cannabis spray for MS, Sativex.
ITV (ITV) – News that ex Royal Mail boss Adam Crozier was appointed as Chief Executive did not cause much excitement in ITV’s stock price. Continuing to hold on expected recovery in TV revenues, hoped deregulation in TV market pricing and product placement.
Amgen (AMGN) – Despite heavy falls in the U.S. markets last week, Amgen had a good week, rising above $58. Some profits taken at $58.5 but continuing to hold core position on anticipation of Prolia (osteoporosis drug) approval in EU in this half of 2010.
INTEL (INTC) – After selling most of the position prior to the results at over $21, weakness in the semiconductor sector this week gave a buying opportunity at below $19 and therefore have reinitiated several positions.
Micron Technology (MU) – The worst performer of the week, having hit close to $11 3 weeks ago, the stock continues to slide close to $8.7 and with an average buy position of just below $10 this is showing a loss. The recent legal settmement between Samsung and Rambus did not help sentiment but concerns that Samsung may ramp up DRAM production or that inventories will rise have not helped the direction of the stock in recent days. Continuing to hold but on review.
Google (GOOG) – Position close at $555 after Q4 results disappointed markets with a fall from over $580. Stock now at $529 and looking at re-entry point.
JP Morgan (JPM) – Position initiated at $39. JPM is one of the better plays in the U.S. financial sector and has fallen heavily in the last 2 weeks from $43-44 range.
Tuesday, January 26, 2010
AMGEN EARNINGS NOT OUTSTANDING, PROLIA APPROVAL KEY
The world's largest biotech, Amgen (AMGN), posted a disappointing Q4 performance after the close yesterday due to slowing sales of Aranesp, Neupogen and Enbrel. The stock price rose 0.8% after hours to finish at $56.20.
The company reported net income of $931 million, or 92 cents a share for Q4, compared with $925 million, or 87 cents a share, for the same period in 2008.Revenue for the quarter increased 2% to $3.81 billion and it reported adjusted earnings per share of $1.05 vs. $1.06 in 2008. Analysts expected Amgen to report earnings of $1.14, on revenue of $3.84 billion.
Amgen said it now sees 2010 revenue coming in between $15.1 billion and $15.5 billion. Adjusted earnings per share are seen between $5.05 and $5.25. Giving a forward P/E of 10.6 assuming earnings at the upper end of the forecast.This was bang in line of EPS of $5.11, on sales of $15.27 billion.
Sales of Amgen's flagship anemia product Epogen rose 9% to $703 million as prices rose, while sales of its newer anemia therapy Aranesp fell 8% to $648 million due to a fall in demand for cancer care related use.
The company announced hat it has submitted additional information to support U.S. approval of its osteoporosis drug Prolia (denosumab), The U.S. FDA said recently it would not consider approving the product until Amgen provided more supporting information. The European advisory body on drug safety recommended the drug for European approval at the end of 2009 and launch is expected during the second half of 2010 on this side of the Atlantic.
Given the low valuation on future earnings and prospects for Prolia, Amgen remains a strong buy for Contrarian Investor. For a biotech stock, Amgen offers good value.
The company reported net income of $931 million, or 92 cents a share for Q4, compared with $925 million, or 87 cents a share, for the same period in 2008.Revenue for the quarter increased 2% to $3.81 billion and it reported adjusted earnings per share of $1.05 vs. $1.06 in 2008. Analysts expected Amgen to report earnings of $1.14, on revenue of $3.84 billion.
Amgen said it now sees 2010 revenue coming in between $15.1 billion and $15.5 billion. Adjusted earnings per share are seen between $5.05 and $5.25. Giving a forward P/E of 10.6 assuming earnings at the upper end of the forecast.This was bang in line of EPS of $5.11, on sales of $15.27 billion.
Sales of Amgen's flagship anemia product Epogen rose 9% to $703 million as prices rose, while sales of its newer anemia therapy Aranesp fell 8% to $648 million due to a fall in demand for cancer care related use.
The company announced hat it has submitted additional information to support U.S. approval of its osteoporosis drug Prolia (denosumab), The U.S. FDA said recently it would not consider approving the product until Amgen provided more supporting information. The European advisory body on drug safety recommended the drug for European approval at the end of 2009 and launch is expected during the second half of 2010 on this side of the Atlantic.
Given the low valuation on future earnings and prospects for Prolia, Amgen remains a strong buy for Contrarian Investor. For a biotech stock, Amgen offers good value.
Sunday, January 24, 2010
Amgen posts Q4 2009 Earnings on Monday
Core biotech holding Amgen (AMGN) posts Q4 2009 and full year 2009 earnings after the market close on Monday.
25% of the companies in the U.S. S&P 500 report next week including Caterpillar (CAT), Conoco Phillips (COP), Chevron (CVX), Boeing (BA), AT&T (ATT) and Verizon (VZ).
25% of the companies in the U.S. S&P 500 report next week including Caterpillar (CAT), Conoco Phillips (COP), Chevron (CVX), Boeing (BA), AT&T (ATT) and Verizon (VZ).
Saturday, January 23, 2010
Portfolio Update January 23rd 2010
Falkland Oil and Gas (FOGL) – A volatile week for the Falkland Islands oil exploration companies. For example, FOGL peaked the week at 182p (where profits were taken) and finished Friday at 166p. Following an initial sale, the position was increased at 162p. The Ocean Guardian Rig is now off the coast of Brazil and is expected to arrive in the Falklands in the next 2 weeks. Drilling for Desire Petroleum (DES) will commence by mid-February. Announcements of rig sharing with Rockhopper (RKH) and potentially BHP/FOGL are expected any time soon. With rig arrival, it is expected that publicity for these oil stocks will drive prices higher and investors scramble on board. With these type of shares, its “buy on the rumour, sell on the fact”.
Borders and Southern Petroleum (BOR) and Desire petroleum (DES) – Position continue to be held in these Falkland plays for the reasons above.
GW Pharma (GWP) – Position increased this week as news on Sativex approval continues to be sought.
Coal of Africa (CZA) - Operational update expected any day. News on Vele mine approval anticipated. Position trimmed but still holding.
Coal of Africa (CZA) - Operational update expected any day. News on Vele mine approval anticipated. Position trimmed but still holding.
ITV (ITV) – With the General Election in the U.K. and World Cup expected to boost TV revenues from the very low levels of 2009, this continues to be a hold. The negotiations for the Contract Rights Renewal are ongoing with the Competition Commission and OFCOM, the formula that dictates ITV’s ad rates. It is widely expected that the rules, which were created at the formation of ITV in 2003 by the merger of Carlton and Granada, will be relaxed. Potential upside from any relaxation in the rules for Product Placement in programming could generate a potential £100 million plus in additional revenues. Though debt is fairly hefty at over £700 million but this has been refinanced during 2009 but it is expected that aggressive cost cutting led by new Chairman Archie Norman should bring this under control. At 57p, ITV is below analyst targets of 70p and may still be a takeover target.
Nighthawk Energy (HAWK) - Little movement this week, closing at 32p. Holding for drilling update.
Amgen (AMGN) – Despite the significant falls in the Dow Jones Industrial average in the latter part of the week, Amgen remained relatively resilient at $56.6 as a Republican Victory in a Senate Election made Obama’s healthcare reform programme less likely to proceed drove up pharmaceutical stocks. Holding.
Google (GOOG) - A trade in Google prior to the results did not produce positive results with a fall from $580 to $550 during the course of yesterday. Decision to sell under review.
Intel (INTC) – Positions trimmed during the week on Nasdaq strength on Monday and Tuesday. Holding small position
Micron (MU) - A very poor week for Micron with a fall from close to $11 to $9.13 as the semi conductor sector fell away at the end of the week. Holding but position at loss with purchases averaging $10.2.
Saturday, January 16, 2010
Portfolio Update January 16th 2010
INTEL (INTC) - After the market close Thursday, the chip manufacturer announced better-than-expected fourth-quarter earnings and a strong outlook for the year ahead. Despite rising after hours yesterday, they finished 3.2% down at $20.80. With a forward p/e of 13 and with the company's 2.7% dividend yield supported by $12.9 billion in cash on its balance sheet, with just $2.4 billion in debt, INTC looks strong for 2010. After selling 50% of my stock prior to the results, bought back in yesterday. Looking for $22-23 in short term.
AMGEN (AMGN) - The stock traded in a narrow $55-57 range this week after guiding down estimates for 2010 earlier in the week. Holding on news of osteoporosis drug, Prolia in Europe.
MICRON (MU) - Have traded MU, selling several times above $10.8 and have bought back at $10.1. With memory chip prices improving, Micron is postioned well for the semiconductor recovery.
JP MORGAN (JPM) - Position sold Thursday prior to Friday results. JPM finished down 2.26% at $43.68 as Q4 results disapointed on the top line as bad debts continue to be a concern and there was surprise that despite the repayment of TARP (toxic asset relief programme) in 2009, the dividend was not increased. Under Jamie Dimon's leadership this is one of the stronger U.S. financial instritutions and will be looking to buy in on any continued weakness.
FALKLAND OIL AND GAS (FOGL) - The share continues to sharply move up , finishing the week at 168p, a climb of over 20% as Falkland Islands hysteria begins. Some profits taken but holding on deep water rig news or agreement to share Ocean Guardian Rig with Desire Petroleum.
BORDERS AND SOUTHERN PETROLEUM (BOR) - The company holds a 100% interest in five production licences in the South Falkland Basin. In November Borders & Southern raised £113m, enough to finance the drilling of three wells. Is is likely to share a rig with fellow south basin explorer, Falkland Oil & Gas. This is partly because Borders & Southern‘s licences are in the deep waters to the south, but also because Desire and Rockhopper have already secured their rig. Position initiated at 66p.
GW PHARMA (GWP) - Position increased. Price now 93p. Awating news on European approval of lead product, Sativex
ITV (ITV) - Position initiated at 55p with positive momentum in media stocks and turnaround story under Archie Norman.
NIGHTHAWK (HAWK) - Holding with drilling news from Jolly Ranch and Revere projects still expected shortly.
AMGEN (AMGN) - The stock traded in a narrow $55-57 range this week after guiding down estimates for 2010 earlier in the week. Holding on news of osteoporosis drug, Prolia in Europe.
MICRON (MU) - Have traded MU, selling several times above $10.8 and have bought back at $10.1. With memory chip prices improving, Micron is postioned well for the semiconductor recovery.
JP MORGAN (JPM) - Position sold Thursday prior to Friday results. JPM finished down 2.26% at $43.68 as Q4 results disapointed on the top line as bad debts continue to be a concern and there was surprise that despite the repayment of TARP (toxic asset relief programme) in 2009, the dividend was not increased. Under Jamie Dimon's leadership this is one of the stronger U.S. financial instritutions and will be looking to buy in on any continued weakness.
FALKLAND OIL AND GAS (FOGL) - The share continues to sharply move up , finishing the week at 168p, a climb of over 20% as Falkland Islands hysteria begins. Some profits taken but holding on deep water rig news or agreement to share Ocean Guardian Rig with Desire Petroleum.
BORDERS AND SOUTHERN PETROLEUM (BOR) - The company holds a 100% interest in five production licences in the South Falkland Basin. In November Borders & Southern raised £113m, enough to finance the drilling of three wells. Is is likely to share a rig with fellow south basin explorer, Falkland Oil & Gas. This is partly because Borders & Southern‘s licences are in the deep waters to the south, but also because Desire and Rockhopper have already secured their rig. Position initiated at 66p.
GW PHARMA (GWP) - Position increased. Price now 93p. Awating news on European approval of lead product, Sativex
ITV (ITV) - Position initiated at 55p with positive momentum in media stocks and turnaround story under Archie Norman.
NIGHTHAWK (HAWK) - Holding with drilling news from Jolly Ranch and Revere projects still expected shortly.
Wednesday, January 13, 2010
Alcoa disapointment delivers weak start to U.S. earnings season
Dow Jones Industrial component, Alcoa (AA) delivered disappointing fourth quarter 2009 results after the close on Monday, causing an 11% drop in the price to $15.52 (-$1.93) and leading the Dow industrials down 36 to 10,627. The FTSE 100 dropped 39 to 5,499. After Monday's closing bell, Alcoa reported a quarterly net loss of $277 million, or 28 cents a share, compared to a year-earlier loss of $1.2 billion or $1.49 a share, when aluminium prices collapsed.
Analysts had expected the company to earn 5 cents a share on sales of $4.9 billion. Excluding charges, Alcoa said it earned 1 cent a share worrying the markets that economic recovery may be slower than anticipated. A short term buy trade in Alcoa prior to the earnings release therefore disappointed and the position was closed at the open yesterday.
After initially moving into positive territory, Amgen 's (AMGN) price was hit as it said 2009 earnings would come in close to the low end of its forecast, sending its shares down a most 2 percent at one point before closing the session down 1% at $56.03. Continued uncertainty about Amgen's potential block buster osteoporosis drug Prolia (denosumab) also weighed on the stock, as the company said it has not yet responded to a regulatory request for more information on the drug.
Speaking at the JP Morgan Healthcare conference on Tuesday, Chief Executive Officer Kevin Sharer said the company's full-year earnings would be close to the low end of its forecast of $4.90 to $5.05 per share. Analysts on average expected $5.04 per share. 2009 revenue would be at the midpoint of the company's projection of $14.4 billion to $14.8 billion. Analysts were looking for $14.7 billion. Sharer confirmed $4 billion in cash at the end of the 3rd quarter.
A drop in JP Morgan (JPM) to close to $43 at one point during the trading session gave a buying opportunity with results due Friday.
Analysts had expected the company to earn 5 cents a share on sales of $4.9 billion. Excluding charges, Alcoa said it earned 1 cent a share worrying the markets that economic recovery may be slower than anticipated. A short term buy trade in Alcoa prior to the earnings release therefore disappointed and the position was closed at the open yesterday.
Weakness in semiconductor stocks gave a good re-entry point for Micron (MU) and for an increase in the Intel (INTC) position with the results due Thursday.
After initially moving into positive territory, Amgen 's (AMGN) price was hit as it said 2009 earnings would come in close to the low end of its forecast, sending its shares down a most 2 percent at one point before closing the session down 1% at $56.03. Continued uncertainty about Amgen's potential block buster osteoporosis drug Prolia (denosumab) also weighed on the stock, as the company said it has not yet responded to a regulatory request for more information on the drug.
Speaking at the JP Morgan Healthcare conference on Tuesday, Chief Executive Officer Kevin Sharer said the company's full-year earnings would be close to the low end of its forecast of $4.90 to $5.05 per share. Analysts on average expected $5.04 per share. 2009 revenue would be at the midpoint of the company's projection of $14.4 billion to $14.8 billion. Analysts were looking for $14.7 billion. Sharer confirmed $4 billion in cash at the end of the 3rd quarter.
In the U.K., Falkland Islands oil play, Falklands Oil and Gas continued its upward move, rising 7.5 or 5% to 153p as Investec declared a 5% notifiable interest in the stock.
Saturday, January 9, 2010
Portfolio Update Jan 9th
Coal of Africa (CZA)
Closed at 128p yesterday so showing close to a 30% profit. The Telegraph Newspaper cited takeover rumours as the driver of the increase, but the underlying fundamentals of coal demand are improving and this has increased sector prices across the board over the last 2 weeks. Demand from India and China remain particularly strong. Still awaiting news on Vele mine approval.
Have taken some profits, but still holding a substantial position.
Nighthawk Energy (HAWK)
Remains flat at 35.75p. News on drilling from Jolly Ranch and Revere expected during January. Holding.
ITV (ITV)
Position initiated in ITV at 58p. Evidence suggests significant pick up in TV revenues and positive outlook for 2010 driven by World Cup and global economic recovery which should bring back advertisers into the market.
GW Pharma (GWP)
Position moved into profit following buy at 84p. Now 90p to sell. News awaited on Sativex registration in UK and Spain. Holding.
Falkland Oil and Gas (FOGL)
Position increased with average buy price of 136p. One of Investor's Chronicle Tips of the Year for 2010 which was published yesterday which drove a significant increase in the SP to 143p. Holding.
Hambledon Mining (HMB)
Position initiated in gold miner at 7p.Q4 production and underground mine update due next week.
Amgen (AMGN)
Position increased following FDA review news on ESA's which sent share price to $55 at low. Average buy $56.7. Current price $56.8. Holding on earnings and product approval news.
Intel (INTC)
Position initiated at $20.8.
Johnson and Johnson (JNJ)
Position initiated at $63.9.
Positions closed
Desire Petroleum
Closed at 128p yesterday so showing close to a 30% profit. The Telegraph Newspaper cited takeover rumours as the driver of the increase, but the underlying fundamentals of coal demand are improving and this has increased sector prices across the board over the last 2 weeks. Demand from India and China remain particularly strong. Still awaiting news on Vele mine approval.
Have taken some profits, but still holding a substantial position.
Nighthawk Energy (HAWK)
Remains flat at 35.75p. News on drilling from Jolly Ranch and Revere expected during January. Holding.
ITV (ITV)
Position initiated in ITV at 58p. Evidence suggests significant pick up in TV revenues and positive outlook for 2010 driven by World Cup and global economic recovery which should bring back advertisers into the market.
GW Pharma (GWP)
Position moved into profit following buy at 84p. Now 90p to sell. News awaited on Sativex registration in UK and Spain. Holding.
Falkland Oil and Gas (FOGL)
Position increased with average buy price of 136p. One of Investor's Chronicle Tips of the Year for 2010 which was published yesterday which drove a significant increase in the SP to 143p. Holding.
Hambledon Mining (HMB)
Position initiated in gold miner at 7p.Q4 production and underground mine update due next week.
Amgen (AMGN)
Position increased following FDA review news on ESA's which sent share price to $55 at low. Average buy $56.7. Current price $56.8. Holding on earnings and product approval news.
Intel (INTC)
Position initiated at $20.8.
Johnson and Johnson (JNJ)
Position initiated at $63.9.
Positions closed
Desire Petroleum
Friday, January 8, 2010
FDA review triggers jittters in Amgen and J&J
Yesterday Amgen (AMGN) dropped by as much as 2%, to a low of $54.65 before rebounding and finishing the day at $56.27 (-0.92%) as the U.S. Food and Drug Administation (FDA) announced plans to consult outside experts to re-evaluate the use of Amgen’s Aranesp and Johnson u& Johnson ‘s Procrit anemia drugs when given to patients with chronic kidney disease
An article published in the New England Journal of Medicine on Wednesday, said the agency "anticipates convening a public advisory committee meeting in 2010 to re-evaluate the use of drugs known as erythropoiesis-stimulating agents (ESAs) in people with chronic kidney disease. Amgen's Aranesp and Epogen and J&J's (JNJ) Procrit are both ESA’s.
The drugs came under scrutiny two or three years ago after studies showed high doses could lead to heart complications or in very rare cases even death. An FDA spokeswoman said an "important question" for the advisory panel would be what level of haemoglobin doctors should try to achieve with the drugs . In the journal article, they said "optimal haemoglobin targets have never been established" for patients with chronic kidney disease and clinical trials had raised "major concerns regarding the use of ESAs to increase hemoglobin concentrations" in chronic kidney disease patients above levels needed to avert blood transfusions. But the studies "do not rule out the possibility, however, that modest increases in the hemoglobin level could be beneficial," they added.
Sales of ESA drugs are a significant contributor to earnings, particulary in the case of Amgen. Amgen reported third-quarter Aranesp sales of $675 million. Sales of J&J's Procrit and anemia drug Eprex were $542 million in the quarter.
Given that both Amgen and J&J have aggressively tightened the labelling of their ESA products to minimise risks which has hit earnings from their drugs signnicantly, it is likely that these products will contain to be mainstay of therapy in patients with Chronic Kidney disease given the lack of viable alternatives at the current time. Thought the FDA hearings will undoubtedly hit sentiment, especially for Amgen, it is considered unlikely that Aranesp, Epogen and Procrit will be withdrawn from the market. Additional monitoring may be requested which may further hinder sales, but forthcoming news on new products from both J&J and Amgen makes any downside likely to be covered by these new innovations.
Position increased in Amgen at $55 and position initiated in J&J at $63.
An article published in the New England Journal of Medicine on Wednesday, said the agency "anticipates convening a public advisory committee meeting in 2010 to re-evaluate the use of drugs known as erythropoiesis-stimulating agents (ESAs) in people with chronic kidney disease. Amgen's Aranesp and Epogen and J&J's (JNJ) Procrit are both ESA’s.
The drugs came under scrutiny two or three years ago after studies showed high doses could lead to heart complications or in very rare cases even death. An FDA spokeswoman said an "important question" for the advisory panel would be what level of haemoglobin doctors should try to achieve with the drugs . In the journal article, they said "optimal haemoglobin targets have never been established" for patients with chronic kidney disease and clinical trials had raised "major concerns regarding the use of ESAs to increase hemoglobin concentrations" in chronic kidney disease patients above levels needed to avert blood transfusions. But the studies "do not rule out the possibility, however, that modest increases in the hemoglobin level could be beneficial," they added.
Sales of ESA drugs are a significant contributor to earnings, particulary in the case of Amgen. Amgen reported third-quarter Aranesp sales of $675 million. Sales of J&J's Procrit and anemia drug Eprex were $542 million in the quarter.
Given that both Amgen and J&J have aggressively tightened the labelling of their ESA products to minimise risks which has hit earnings from their drugs signnicantly, it is likely that these products will contain to be mainstay of therapy in patients with Chronic Kidney disease given the lack of viable alternatives at the current time. Thought the FDA hearings will undoubtedly hit sentiment, especially for Amgen, it is considered unlikely that Aranesp, Epogen and Procrit will be withdrawn from the market. Additional monitoring may be requested which may further hinder sales, but forthcoming news on new products from both J&J and Amgen makes any downside likely to be covered by these new innovations.
Position increased in Amgen at $55 and position initiated in J&J at $63.
Tuesday, January 5, 2010
Update on portfolio - January 5th 2010
Nighthawk Energy (HAWK)
Average buy price 35p. Currently 35.75p to sell. Hold with news from Revere and Jolly Ranch project imminent.
Coal of Africa (CZA)
Average buy price 99p. Currently 115p to sell. Rising South African Coal prices driven by strong Indian Subcontinent demand have moved the share price up from the £1 level. Further news on Vele project and move from AIM to main market are catalyts for further share price appreciation. Holding.
Desire Petroleum (DES)
Buy at 85p. Sold at 108p. Placing and open offer deadline extended to January 11th. Open offer at 70p means that shares may well be sold on receipt which may depress share price during mid January. Watching for possible re-entry.
Falkland Oil and Gas (FOGL)
Buy at 132p. Holding at 128p.
JP Morgan Emerging and Templeton Emerging.
Short positions closed at loss due to continued strength in Emerging markets stocks.
Micron Technology (MU)
Buy at $10.3 closed at $11. Share on watch for repurchase.
Amgen
Average buy at $57.5. Currently at $57.8. Holding due to imminent drug approval news.
GW Pharma (GWP)
Buy at 84.5. Currently 88p to sell. Holding with European Medicines Review agency due end January. Approval of Sativex lead drug likely Q1 2010.
Average buy price 35p. Currently 35.75p to sell. Hold with news from Revere and Jolly Ranch project imminent.
Coal of Africa (CZA)
Average buy price 99p. Currently 115p to sell. Rising South African Coal prices driven by strong Indian Subcontinent demand have moved the share price up from the £1 level. Further news on Vele project and move from AIM to main market are catalyts for further share price appreciation. Holding.
Desire Petroleum (DES)
Buy at 85p. Sold at 108p. Placing and open offer deadline extended to January 11th. Open offer at 70p means that shares may well be sold on receipt which may depress share price during mid January. Watching for possible re-entry.
Falkland Oil and Gas (FOGL)
Buy at 132p. Holding at 128p.
JP Morgan Emerging and Templeton Emerging.
Short positions closed at loss due to continued strength in Emerging markets stocks.
Micron Technology (MU)
Buy at $10.3 closed at $11. Share on watch for repurchase.
Amgen
Average buy at $57.5. Currently at $57.8. Holding due to imminent drug approval news.
GW Pharma (GWP)
Buy at 84.5. Currently 88p to sell. Holding with European Medicines Review agency due end January. Approval of Sativex lead drug likely Q1 2010.
Sunday, December 27, 2009
AMGEN - A biotech with news and a reasonable valuation
Last week, the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) has announced a positive opinion for the marketing authorization of Prolia((TM)) . Prolia (denosumab) is a key bet for Amgen(AMGN) and is critical in weaning the company off its anaemia portfolio.
The licence application for Prolia is for the treatment of osteoporosis in postmenopausal women at increased risk of fractures, and for the treatment of bone loss associated with hormone ablation in men with prostate cancer at increased risk of fractures. If approved by the European Commission, Amgen would receive marketing authorization for Prolia in all European Union (EU) Member States.Approval if expected some time in Q1 2010.
Prolia’s active ingredient, denosumab, has a unique mechanism of action. It is the first and only therapy in late stage development that specifically targets RANK Ligand, an essential regulator of osteoclasts (the cells that break down bone). Administered every six months as a subcutaneous injection just under the skin, denosumab helps stop the process that causes bone loss, resulting in greater bone density, stronger bones and reduced risk for fractures at the spine, hip and other non-vertebral sites.Given its potential to inhibit all stages of osteoclast development through a unique and targeted mechanism, denosumab is also being studied in a range of other bone loss conditions including rheumatoid arthritis, and for its potential to delay bone metastases and inhibit and treat bone destruction in patients with advanced cancer.
The CHMP positive opinion is based on data from six Phase 3 trials. Two Phase 3 pivotal studies with fracture endpoints in the osteoporosis and prostate cancer settings demonstrated that Prolia administered as a subcutaneous injection twice yearly (60mg) reduces the incidence of fractures. All six studies showed
Prolia is also under regulatory review in the United States (U.S.), Switzerland, Australia and Canada for the treatment and prevention of postmenopausal osteoporosis and for the treatment of bone loss in patients undergoing hormone ablation therapy for breast or prostate cancer. The F.D.A. asked Amgen for additional data in late October, which ultimately may require further clinical.
Amgen’s share price is currently $57 and analysts are estimating 2010 earnings at over $5, giving a forward P/E of 11, which is not aggressive for a biotech stock. Recent news that the company has won a patent dispute with Roche relating to its anaemia product, Mircera, gives further reassurance about earnings and the company approved an additional $5 billion stock buy back in Early December (adding to the $1.2 bn left in the previous buyback programme). The 52 week range is $44 - $64.
Given the forthcoming news on Prolia and the unchallenging P/E, Amgen looks to be a good buy for January.
Subscribe to:
Posts (Atom)