Monday, June 20, 2016

What Do You Think The Giants Are Going To Do?

It is an interesting time to be a part owner of a company with pending phase three trial results.  There is a lot that can happen, so many directions to go, ways in which the market can move.  Overall market conditions might well dictate, especially in an election year.  But after the big plunge last summer my GUESS is that the worst is over and what will move this stock is what professional money does from here.  Up to now they have been overall buying albeit in the setting of rising short interest.

The bearish argument is that the risk is high.  P3 results could be bad, best to get out and wait for published results.  Perhaps even the big money guys will do the same.  Perhaps push the stock to retail then shake them around to buy back if results are good.  There is also the thought that despite good results we are still perhaps years away from an actual product with actual sales.  No need to buy or hold if that is the case.  Is big money bearish?

The neutral price argument holds up only if bullish and bearish forces remain equal.

Bullish argument centers on hopes for future product, the idea to invest now for future earnings.  Big money continues buying up shares.  Gates/Path add to what they have been helping with.  Big pharma partners and helps build out new facility.  If Big Pharma were to want to buy they would have to bring on market actions to get shares...  Is big money bullish?

I think a lot of retail follows a lot of the drivel in the press.  Conflicting opinion from "The Street" and "The Fools" makes it difficult to buy and/or hold.  The IBD crowd can't even find this one (and I think you have to buy earlier than the IBD crowd-they are the ones that get distributed to).  The value players find nothing tangible of value.  I think smart money is buying.  I do not know what Soros will do though.

The thing to do is to come up with an overall investment plan and stick to it.  I like to invest in growth companies that I can understand, come up with future estimates for, and sleep well at night holding.  Novavax fits this well for me.  They have a leadership team that has grown pharmas before and sold them at a premium.  They have good P2 results derisking a lot.  They are bringing in key people and executing well on plans.  They have things thought out with regard to how to move forward.  They are talking to Big Pharma about partnering.  They are working with Gates/Path.

I think the giants are buying and holding.

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